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TMI Blog2022 (10) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... rried out a search under Section 132 at the residence or business premises of the assessee. Steps under Section 133A were undertaken at the residences of the employees or individuals concerned with the assessee and the businesses of the assessee/associates. The Revenue, basing upon and/or referring to the documents/material recovered in search and seizure, initiated proceedings under Section 153A of the Act for assessment for the period 2004-05 to 2010-11 against the assessee, the wife of the assessee, his two daughters, and employees working with the assessee at the relevant point of time. On 31.12.2011, the Assessing Authorities completed the assessment for the slab assessment years. 4. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) (for short, 'CIT(A) ) and granted part relief to the assessee vide order dated 16.06.2015. The order dated 16.06.2015 to the extent aggrieved the Revenue and assessee filed appeals before the Income Tax Appellate Tribunal, Cochin Bench, Cochin (for short, 'the Tribunal'). The appeals filed by the assessee and the Revenue were disposed of through the impugned judgment. Notices under Section 153A for the slab years had tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he error of law and non-application of mind?". 6.1. The assessee claimed agricultural income from agricultural properties situated in the Sreerange, Maharashtra and Pang, Malappuram district. Insofar as agricultural properties situated in Maharashtra are concerned, the assessee has claimed Rs. 32,62,500/- in cash flow statement as having received from a few lessees doing agricultural operation in Maharashtra. The other income is from Pang, Malappuram district. The assessee, to establish the authenticity of the increase in the cash flow statement, relied on a few notarised lease agreements between the assessee and the lessees. The notarized lease agreements for the following reasons namely that the notary advocate who had affixed the notary seal and stamp diluted the genuineness of the lease arrangement and also stated that the notarized lease agreements are not meant to be presented before any authorities. For distinct and separate reasons, the Assessing Officer rejected the details in the cash flow statement on agricultural income in Maharashtra and treated the same as income from other sources. The Tribunal examined each one of the circumstances in para 19 and found that the xer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the jurisdiction of this Court under Section 260A of the Act. The question is answered in favour of Revenue and against the assessee. The same question of disallowance of agricultural income also arises in I.T.A Nos. 49/2018, 52/2018, 58/2018, 55/2018, 60/2018, 63/2018, 51/2018. The question on the disallowance of agricultural income in these appeals as well, for the above discussion, is answered in favour of Revenue and against the assessee. (b) Investment in M/s.Tristar investments, Bangalore. 10. The question of law formulated at the time of hearing reads as follows: "Whether the Authorities and the Tribunal are justified for including Tristar investments in the computation of the assessee or not?". 10.1 The case of the Revenue is that during the search of the business premises of M/s. Nilambur traders, a document regarding an investment made by the assessee in Tristar Investments and the amount received back were found. The discovery leads to a survey under section 133A of the business activities of M/s. Tristar Investments and recovered. The Department recorded the statement of one Thomas Perincherry, and in the statement, Thomas Perincherry disclosed the cash investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment during the course of search marked as CHN-14/28. Certain accounts copied from their office at Bangalore are available in Computer. The name shown as Paul-2 is actually the assessee. The total investment made by the assessee in this firm is Rs.70,00,000/- during the financial year 2005-06 and 2006-07. The details are available in page no.40,45 & 48 of item No. CHN-14/28" When both the partner of the firm and the employee of the assessee are confirmed the investment of the assessee in M/s. Tristar Investment (Hint Pub). Bangalore. The denial of investment by the assessee is not acceptable and the assessee has not shown this investment in his cash flow statement therefore the investment made by the assessee during the period relevant to the Asst Year 2007-08 is Rs. 3,00,000/- and the same is added to the total income of the assessee." The findings of the Tribunal held as follows: "13.4 We have heard the rival submissions and perused the material on record. The main contention of the Ld. AR is that there was seized material in page no. 40, 45, 48 referred as CHN-14/28. It also showed that the assessee has contributed toward Tristar Investments, Bangalore based on an agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in favour of Revenue and against the assessee. (c) Amounts credited in the bank accounts of the assessee's employees. 14. The question of law raised in the course of argument reads as follows: "Whether the Assessing Authority was right in law in holding that the credits in the bank accounts of the employees represent a share of profit of the appellant in the above partnership concern when the firm itself had not made profits, as per assessment orders passed in its case?" 14.1 From the documents seized in the search, the Revenue noted that huge amounts are seen credited in the bank accounts of Mr K.C Thomas, Mr Sathar, and Mr K.Jaffer, who were the employees in the business establishments run by the assessee. The Revenue recorded sworn statements from these employees. The employees said that the amounts credited in their personal bank accounts belong to the assessee. The head under which the amounts are received profits from Tristar Investments, Bangalore. Confronted with the documents and the statements of his employees, the reply given by the assessee is that, at the distance of the time, when an enquiry was taking place, he was unable to recollect the details. He was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of income of amounts discerned from the accounts of the assessee's employees answered in favour of the Revenue and against the assessee. (d) Loan to Mohanraj. 18. The question of law raised in the course of argument is that "Whether the Appellate Tribunal did commit an error of the law when the Tribunal set aside the order of the CIT(A) and remanded the matter to the Assessing Authority, Particularly when the addition is based on the retracted statement of Mohanraj?". 19. The Revenue basing on the details received on money lending business allegedly carried on by the assessee examined one U.K Mohanraj. U.K Mohanraj stated that he had borrowed Rs. 50 to 60 lakhs in the years 2006 and 2007. Mohanraj stated that, who have deposited signed cheques for an amount of Rs. 2.3 crores in the name of the assessee. The assessee paid in cash to Mohanraj, and the agreed rate of interest was 10%, and in default of payment of interest, penal rate of 20% per month on the balance outstanding amount. Mohanraj, by cash, repaid Rs.2.5 crores. In October 2007, the assessee informed Mohanraj's liabilities as Rs. 1.6 crores. Mohanraj, who reconciled the payments made to the assessee in cash, re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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