M.A. Unnerikutty vs Commissioner of Income Tax

C.N. Ramachandran Nair, J.—Pursuant to the direction issued by this Court in O.P. No. 19693 of 1997, the Tribunal referred the following question of law for our decision:

Whether on the facts and circumstances of the case, the Tribunal is right in confirming the order of the Commissioner of Income Tax (Appeals), upholding the reassessment u/s 147(a) of the Income Tax Act for the assessment year 1971-72 ?

The case of the assessee is that income escaping assessment made u/s 147(a) of the Income Tax Act is beyond the jurisdiction of the Officer because the reason for reopening of assessment is unaccounted purchase of copra for Rs. 59,392. The assessee''s case was that stock was declared and so much so all material facts were disclosed by him. However, the finding of the Tribunal is that the assessee accounted the stock as not belonging to him, but as belonging to agriculturists, who had left copra with him for sale. However, the assessee could not prove that the copra really represents that of agriculturists and not copra purchased and held as stock by him. In this view of the matter, Tribunal held that the assessee has not disclosed full and true facts in accounts and so much so reopening u/s 147(a) is justified. We do not find anything wrong in the finding of the Tribunal, because when assessee puts up specific case that copra held as stock belongs to others, namely, agriculturists, it is for him to produce evidence and agreements disclosing the terms and conditions on which such copra is taken from agriculturists and held as stock with him. Tribunal rightly held that quantity of copra held by the assessee was camouflaged in the accounts as goods belonging to agriculturists which the assessee could not prove with evidence. When assessee makes misrepresentation that the stock held by him belongs to others, which he fails to prove, it is a case of suppression of facts and so much so, there was no full disclosure of facts on his side. In the circumstances, we uphold the finding of the Tribunal and answer the question referred against the assessee and in favour of the revenue.