IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 6TH FEBRUARY 2008 / 17TH MAGHA 1929 ITA.No. 86 of 2002() -------------------- ITA.618/1996 of I.T.A.TRIBUNAL,COCHIN BENCH .................... : APPELLANT/APPELLANT. ------------------------------------- THE COMMISSIONER OF INCOME TAX COCHIN. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS: RESPONDENT. ------------------------ M/S.COCHIN WINES, COCHIN. BY ADV. SRI.A.KUMAR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 06/02/2008, ALONG WITH ITA 141 & 149/2002, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N. Ramachandran Nair & T.R. Ramachandran Nair, JJ. - - - - - - - - - - - - - - - - - - - - - - - - I.T.A.NOs.86, 141 & 149 of 2002 - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 6th day of February, 2008. JUDGMENT C.N. Ramachandran Nair, J. Heard learned Senior counsel appearing for the Revenue and learned counsel appearing for the respondent/assessee. 2. The orders under challenge are issued by the Income Tax Appellate Tribunal confirming the order of the Commissioner of Income Tax (Appeals), cancelling penalty levied under Section 271(1)(c) of the Income Tax Act. The respondent assessee was engaged in liquor business. Since the books of accounts were not produced, income was estimated based on sales turnover. We find that income estimated at 2% of the sales turnover was reduced by the Tribunal and sustained for the years 1982-83 to 1984-85, to 0.45%, 0.55% and 0.7% respectively. Learned counsel for the Revenue contended that since the assessee declared nil income and positive income is estimated and sustained up to the Tribunal's level, there is concealment of income to that extent. We are unable to uphold the contention of the Revenue, because the clear cut finding of the Tribunal is that the assessee's case that there was no income, stands established ITA 86, 141 & 149/02 -2- substantially by the judgment of this court in the sales tax cases in assessee's own case, wherein this court upheld the order of the Sales Tax Tribunal holding that sale price of liquor effected by the assessee is less than the cost price. In this view of the matter and in view of the variation in the estimation of income between the assessing officer and the higher authorities including the Tribunal, the Tribunal held that there is no concealment of any income or material particulars, warranting penalty procedure under Section 271(1)(c) of the Act. Even though the learned counsel for the Revenue cited the decision of this court in Commissioner of Income Tax v. Sree Krishna Trading Co. (253 ITR 645), we do not think any interference is called for on the findings recorded by the Tribunal. We do not find any question of law arising from the orders of the Tribunal. The appeal is therefore dismissed. (C.N. Ramachandran Nair, Judge.) (T.R. Ramachandran Nair, Judge.) kav/ ITA 86, 141 & 149/02 -3- C.N. Ramachandran Nair & T.R. Ramachandran Nair, JJ. - - - - - - - - - - - - - - - - - - - - - - I.T.A. Nos.86, 141 & 149/2002 - - - - - - - - - - - - - - - - - - - - - - JUDGMENT 6th February, 2008.