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2005 DIGILAW 617 (KER)

C. K. Sudhakaran v. The Income tax Officer

2005-09-09

K.S.RADHAKRISHNAN, K.T.SANKARAN

body2005
Judgment :- K.S. Radhakrishnan, J. Appellant is a dealer in steel wares in Trichur under the name and style “Cherakulam Vessels”. Assessee filed return of income for the assessment year 1998-99 declaring a total income of Rs.55.920/- and agricultural income of Rs.50,000/-. Return of income was accepted under Section 143(1) of the Income tax Act. Since survey under Section 133A of the Act was carried out at the business premises of the assessee on 8.9.1997, the case was selected for scrutiny. During the course of survey under Section 133A an agreement dated 12.5.1997 executed between the promoters of City Centre Shopping Complex, Round West, Trichur and the assessee was obtained. As per that agreement assessee had agreed to purchase shop room No.115 measuring 688.53 sq. ft. with proportionate common facilities in City Centre, Trichur for a sum of Rs.49,91,842/- Further, as per the agreement, assessee had paid Rs.12,50,000/- being the token value at the time of executing the agreement and the remaining amount of Rs.37,41,842/- was to be paid in five monthly equal instalments of Rs,6,65,000/- starting from 12.6.1997 and the balance amount of Rs.4,16,842/- as the sixth and last instalment. Agreement also provided that if the second party fails to pay two consecutive instalments, the second party would lose their right to get possession of the shop room and the first party shall be at liberty to forfeit Rs.2 lakhs being their loss from the amount paid by the second party and return back the balance, if any, without interest on completion of the work. 2. Assessing authority therefore noticed that the real value of investment made by the assessee in the construction/purchase of shop No.115 admeasuring 688.53 sq. ft. with other common facilities in the City Centre was Rs.49,91,842/- as per the agreement dated 12.5.1997 and after giving credit to Rs.12.5 lakhs admitted by the assessee and disclosed under the VDIS the difference of Rs.37,41,842/- was taken as unexplained investment made by the assessee during the year and treated as income of the assessee for the assessment year 1998-99 under Section 69 of the Act. Aggrieved by the order of the assessing authority assessee took up the matter in appeal before the Commissioner of Incometax (Appeals). Appeal was rejected. Consequently mater was taken before the Tribunal and the Tribunal also rejected the appeal against which this appeal has been preferred. 3. Sri. Aggrieved by the order of the assessing authority assessee took up the matter in appeal before the Commissioner of Incometax (Appeals). Appeal was rejected. Consequently mater was taken before the Tribunal and the Tribunal also rejected the appeal against which this appeal has been preferred. 3. Sri. P. Balachandran, Senior Counsel appearing for the assessee reiterated the contentions made by the assessee before the lower authorities. Reliance was also place on the decision of the apex court in 131 ITR 597 and also on the decision of this court in C.I.T. v. Smt K.C. Agnes and others (2003 (262) I.T.R. 354). Counsel submitted that the Revenue has not discharge the burden of showing that the assessee had paid Rs.49,91,842/- for the shop No.115. Sri P.K.R. Menon, Senior counsel appearing for the Revenue, on the other hand, contended that there is clinching evidence in this case to show that agreement dated 12.5.1997 was genuine and acted upon and therefore the Department is justified in treating the difference as income from unexplained secure. 4. We have considered the contentions raised by both sides meticulously and have gone through the decisions referred to by the counsel. The terms and conditions mentioned in the agreement dated 12.5.1997 are revealing. Agreement clearly stipulates an amount of Rs.49,91,842/- as the value of shop room No.115. The fact that the assessee had paid advance has also been mentioned in the agreement dated 12.5.1997. There is no dispute to that effect. Further it is also clear that assessee had declared payment of Rs.12,50,000/- at the time of agreement under VDIS scheme. As held by the apex court in K.P. Varghese’s case burden of proof is on the respondent to show that the assessee had actually paid more than what was actually disclosed. This burden has been discharge by the Revenue. Burden can be discharged by the Revenue by establishing the facts and circumstances from which reasonable inference can be drawn that the assessee had not correctly declared or disclosed the consideration received by him and there is understatement or concealment of consideration. On facts we are in full agreement with the authorities below. In such circumstances, we find no reason to entertain this appeal. The same would stand dismissed. I.A.1657/05 is also dismissed.