High Court Of Kerala
M.A. Anto vs. CIT
Section 69, 158BB
Asst. Year 1997-98
C.N. Ramachandran Nair & V.K. Mohanan, JJ.
IT Appeal No. 1552 of 2009
18th December, 2009
Counsel appeared :
P. Balakrishnan, for the Appellant : P.K.R. Menon & Jose Joseph, for the Respondent
JUDGMENT
Ramachandran Nair, J. :
Heard counsel appearing for the appellant and standing counsel appearing for the respondent. Both the questions raised for our decision relate to additions made in block assessment, which though deleted by the first appellate authority, were restored by the Tribunal. Counsel contended that there was no justification for the Tribunal to sustain the addition of Rs. 5.85 lakhs which was assessed as unexplained investment made by the assessee in a firm. Even though assessee tried to prove source towards loan taken from brother, sister, nephew and other close relatives, the AO found there is unexplained time lag between the alleged loan and the actual investment. In any case loans were allegedly taken in cash which is against the provisions of the IT Act. We are of the view that when the IT Act provides that taking of loan and repayments in excess of Rs. 20,000 should be only through account payee cheques or demand drafts, cash transaction can be justified only in emergencies. Admittedly there is substantial time lag between the alleged loan in cash and later investment. Therefore, in our view, the AO rightly disbelieved the transaction and the Tribunal confirmed it. We do not find any substantial question of law arising from the order of the Tribunal on this issue for our decision.
2. The next question also pertains to the addition of Rs. 1,43,660 for the year 1997-98. Even though assessee contended that time for filing return was not over as on date of search i.e. 30th July, 1998, it is the finding of the Tribunal that there was no evidence to prove that income was accounted, which is the requirement under s. 158B(b) of the IT Act, for exclusion from assessment as undisclosed income. assessee has no case that assessee has paid advance tax on this amount or has accounted the share income from the firm as on the date of search. Even though counsel for the assessee contended that accounts maintained by the firm is sufficient for exclusion under s. 158B(b), we are unable to accept this contention because it is the assessee who gets the salary income from the firm and as and when income is received, the assessee should account the same and should pay advance tax which is not done here. In the circumstances, the Tribunal rightly held that the share income from the firm was not accounted by the assessee. Consequently we dismiss the appeal on this issue as well.
[Citation : 326 ITR 212]
