High Court Of Kerala
CIT vs. Kallada Wines
Section 69
C.N. Ramachandran Nair & V.K. Mohanan, JJ.
IT Appeal No. 204 of 2009 & CM Appln. No. 430 of 2009
6th November, 2009
Counsel Appeared :
P.K.R. Menon & Jose Joseph, for the Appellant : P. Balakrishnan, for the Respondent
JUDGMENT
C.N. Ramachandran Nair, J. :
Since the reason for delay in filing the appeal is on account of the pendency of the miscellaneous petition before the Tribunal for rectification of the order, we condone the delay and admit the appeal.
The appeal is filed against the order of the Tribunal deleting Rs. 24,72,170, which is a suppressed income assessed, based on inspection in the assessee’s premises held on 12th Dec., 1996.
We have heard the standing counsel appearing for the appellant and Sri P. Balakrishnan, counsel appearing for the respondent. A search was conducted in the assessee’s premises. The assessee was engaged in purchase and sale of liquor. Strangely, two sets of accounts were maintained by the assessee, one for brandy sales and other for other liquor sales. Even under these two heads, the assessee had two sets of accounts in as much as for brandy sales, turnover from April to 31st July, 1996, found in the computer account was higher by Rs. 20,74,344 over the written bills maintained by the assessee. The subsequent unaccounted sales were also found out and the total unaccounted income was Rs. 24,72,170. In the block assessment, this amount was treated as suppressed income. Besides this, the assessee was found to be engaged in sale of liquor under the name ‘other liquor sales’, the accounts of which were found in the computer was also seized. The AO treated this as spurious liquor sales, but granted deduction of cost of purchase and treated the net amount as suppressed income. In appeal, the Tribunal sustained both additions. However, when the matter was taken up on appeal in reference to the High Court, the High Court directed the AO to grant deduction of Kist payments. The CIT also directed revision of the assessment under s. 263 of the IT Act on other matters. The AO therefore, issued a revised order based on judgment of the High Court and the order of the CIT against which assessee again filed appeal. The Tribunal however, deleted the addition made based on s. 263 order of the CIT and even though the addition on account of suppression of the income from brandy sales was earlier sustained by the Tribunal in the first round of appeal, in the second round of appeal they cancelled the addition against which this appeal is filed.
5. After hearing both sides and after going through the Tribunal’s order, we are of the view that the Tribunal’s order is not tenable because, admittedly, the assessee maintained two sets of accounts in respect of brandy sales which is nothing but sale of liquor purchased from authorised sources. When the assessee accounts the full sale consideration in the computer statement, only around 70 per cent of the same is accounted in the bills maintained in writing. The difference is nothing but excess price realised over the accounted sale price. In the first round, the Tribunal sustained the addition and in the second round of appeal, after remand, the Tribunal cannot take a different stand. Further, on the merits, we find no justification in the finding of the Tribunal that the assessee has accounted sales in full, when the Department collected two sets of accounts maintained by the assessee. We therefore, allow the appeal by reversing the finding of the Tribunal and restoring the addition of Rs. 24,72,170 also. No other issue arises in the appeal. The appeal is allowed by reversing the order of the Tribunal and by restoring the assessment made with the addition originally made.
[Citation : 325 ITR 125]
