IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN TUESDAY, THE 2ND FEBRUARY 2010 / 13TH MAGHA 1931 ITA.No. 1775 of 2009() ---------------------- ITA.477/COCH/2006 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- K.SREEKANTAN PILLAI,S/O.KRISHNA PILLAI, THOTTATHIL RUBBERS, KOTTUKAL, PIN-691519. ANCHAL, KOLLAM DISTRICT BY ADV. SRI.V.M.KURIAN SRI.MATHEW B. KURIAN SRI.K.T.THOMAS RESPONDENT/APPELLANT ------------------------ THE INCOME TAX OFFICER, WARD - 3, OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, PARAMESWRA NAGAR, KOLLAM PIN-691001. ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 02/02/2010, ALONG WITH ITA NO.1781 OF 2009, THE COURT ON 02/02/2010 DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... I.T. Appeal Nos.1775 & 1781 of 2009 .................................................................... Dated this the 2nd day of February, 2010. JUDGMENT Ramachandran Nair, J. Heard counsel for the appellant and Senior Standing Counsel for the respondent. The question raised is whether the Tribunal was justified in cancelling the first appellate order and restoring the income escaping assessment completed under Section 147 of the Income Tax Act. 2. Counsel for the appellant contended that the only reason for reopening is low gross profit which according to him, is not a ground for reopening the assessment. However, we notice that besides the low gross profit, the Assessing Officer has pointed out some other grounds as well. Further, percentage of gross profit returned in the same business by the assessee was substantially higher for earlier years. It is seen that the Tribunal has sustained the income escaping assessment following decision of the Supreme Court in COMMISSIONER OF INCOME-TAX VS. RAJESH JHAVERI STOCK BROKERS PVT. 2 LTD. reported in 291 ITR 500. Therefore, we do not find any justification to interfere with the orders of the Tribunal sustaining the income escaping assessments. However, we notice from the Tribunal's order that besides considering validity of reopening, the Tribunal has not gone into the merits of the case i.e. with regard to estimation of net income, addition sustained etc. We, therefore, dispose of the appeals by upholding the findings of the Tribunal with regard to validity of reopening, but by remanding the matter back to the Tribunal for considering appeals on merits i.e. on estimation of gross profit, addition sustained etc., after giving opportunity to both sides. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms