IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 19TH MAY 2010 / 29TH VAISAKHA 1932 ITA.No. 662 of 2009() --------------------- IT(S&S)A.3/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT: -------------------- THE COMMISSIONER OF INCOME TAX, COCHIN, BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT: --------------- M/S KERALA BEVERAGE COMPANY, THODUPUZHA. ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 19/05/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... I.T. Appeal No.662 of 2009 .................................................................... Dated this the 19th day of May, 2010. JUDGMENT Ramachandran Nair, J. Heard Standing Counsel for the appellant and Adv. Sri.P.Balakrishnan appearing for the respondent. After hearing both sides and on going through the orders of the Tribunal and the lower authorities, we find that the questions raised are not substantial questions of law warranting our decision in appeal filed under Section 260A of the Income Tax Act because the addition deleted are expenditure accounted by the assessee under the code name "A Expenditure". While the case of the assessee is that the expenditure accounted is really incurred and is bribe and other expenditure which cannot be accounted, the department's case is that if the expenditure accounted is not proved, it is assessable as deemed income. However, we find from the Tribunal's order that there is no material for the department to show that the expenditure accounted is not really incurred by the assessee to justify it's treatment as income. We do not 2 think in a block assessment any income can be assessed except based on materials gathered and disclosed. In this case the records seized show the amount as expenditure and the department has not established that the entry so made is a bogus entry and the same does not represent real expenditure. So much so, in our view, the Tribunal rightly rejected the department's contention. Consequently we dismiss the departmental appeal. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms