IT Appeal Nos. 90 to 93, 124 to 126, 133, 136, 142 to 144, 146 to 150, 152, 157 to 160, 163 to 165, 168, 169 and 187 of 2013, (Assessment Year: 2002-2003;2003-2004;2004-2005;2005-2006;2006-2007;2007-2008;2008-2009). Case: Sunny Jacob Jewellers and Wedding Centre Vs Deputy Commissioner of Income Tax. High Court of Kerala (India)
| Case Number | IT Appeal Nos. 90 to 93, 124 to 126, 133, 136, 142 to 144, 146 to 150, 152, 157 to 160, 163 to 165, 168, 169 and 187 of 2013, (Assessment Year: 2002-2003;2003-2004;2004-2005;2005-2006;2006-2007;2007-2008;2008-2009) |
| Counsel | For Appellant: Raju Joseph and K.T. Poulose and For Respondents: P.K.R. Menon and Jose Joseph |
| Judges | Dr. Manjula Chellur, C.J. and A.M. Shaffique, J. |
| Issue | Income Tax Act, 1961 - Sections 132, 139, 144, 153A |
| Judgement Date | January 02, 2014 |
| Court | High Court of Kerala (India) |
Judgment:
Dr. Manjula Chellur, C.J.
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These appeals are filed challenging the common judgment of the Tribunal dt. 16th Nov., 2012. By consent of both sides appeals are heard and disposed of by a common order. Following substantial questions of law were raised for consideration:
(i) Has not the Tribunal gone wrong in not considering the aspect as to whether materials detected in a search conducted under s. 132 of the I.T. Act, 1961 in the business premises of another assessee could be a reason or basis for best judgment assessment against the assessee?
(ii) Can suppression of income in any year could be the sole reason for rejecting the return of any previous year and sole basis to resort to best judgment assessment under s. 144 of the I.T. Act, 1961?
(iii) The unit of assessment under the I.T. Act being previous year to assessment year, can be suppression of income during any other year be a basis for estimation of income in any other year?
(iv) Whether the authorities below had gone wrong in relying on the proceedings of the Commercial Tax Department that too before the same had attained finality for the purpose of coming to the conclusion that the assessee had been issuing estimate slips instead of sale bills?
The undisputed facts that led to filing of the above appeals are as under:
There were six jewellery business concerns of the appellants which are admittedly sister-concerns. There were two shops at Thiruvananthapuram, two shops at Kottayam, one at Kollam and another at Kottarakkara. All the six business concerns pertain to Sunny Jacob & family. So far as assessment for income-tax and commercial tax, all the six are different entities, though the partners of all the six business concerns belong to one and the same family. In this background, one has to appreciate the challenge made by the appellant assessee so far as order of the Tribunal.
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The entire litigation arises on account of search conducted by the Revenue on 21st Aug., 2007 in the business concerns of the appellant assessee, apart from various residential houses. Based on the pre-search enquiry conducted on 24th July, 2007, by purchase of gold ornament by the personnel from the Investigation Wing of the Department, the entire process commenced. Said purchases from two shops of the appellants, one pertains to purchase of 2.040 gms. of gold valuing about Rs. 1,940 and another was 1.540 gms. of gold. However, no sale bills were issued. During the search operation, apart from examining the partners of the business Mr. Sunny Jacob, statements of cashier Mr. Joshy Abraham and another staff by name Pintu T. Jacob, computer operator at M/s. Sunny Jacob 916 Jewellery Pazhavangadi, Thiruvananthapuram came to be recorded. It is also borne on record, from M/s. Sunny Jacob Hyper Market, Kollam, during the search three note books marked as MSB-1, MSB-2 and MSB-3 were found and seized. The details from the computer maintained in the assessee's shop that is M/s. Sunny Jacob 916 Jewellery Pazhavangadi, Thiruvananthapuram were examined to see the log on time and all the entries in the computer for the day. So far as sales, they indicate sales were done within two to five minutes. During the search operation daily summary sheet relating to previous day i.e. 20th Aug., 2007 was also seized.
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Based on the above material, notices were issued. In response to the same, fresh returns were filed. However, the income shown in the fresh returns was the income earlier shown by them for the previous six years for which already the assessments were completed in respect of six business concerns. The AO based on the above material and the material during inspection of the taxpayer's premises on 24th Feb., 2006, which revealed that the taxpayers were selling gold ornaments only through estimate slips and were not in the habit of issuing sales bills, proceeded with the assessment for the asst. yr. 2008-09 and passed orders of reassessment for the previous six years. So far as...
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