IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 5TH NOVEMBER 2009 / 14TH KARTHIKA 1931 ITA.No. 200 of 2009() --------------------- IT (S & S) A.7/COCH/2003 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT ----------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- M/S. PARAMESWARAN AND CO. 36/1648, EDAPPALLY, COCHIN-24. ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 05/11/2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- I. T. A. No. 200 OF 2009 -------------------------------------------- Dated this the 5th day of November, 2009 JUDGMENT Ramachandran Nair, J. Heard senior standing counsel for the Department which has filed the appeal and Sri. P. Balakrishnan, counsel appearing for the respondent. After hearing both sides, and after going through the Tribunal's order, we find that the Tribunal has allowed the appeal by extracting abstract law but without reference to facts. In fact the finding of the tribunal in paragraph 11 is as follows: It is true that the details of sales turnover relating to the toddy business of the assessee-firm as well as the sister concern, M/s. Kunjachan & Associates were collected in the course of search. The finding similar to the above is there in the assessment order as well as in the first appellate order. Assessment under Section 158BD is permissible if during the course of search under Section 132 undisclosed income of the person proceeded against is detected. If the turnover of business of 50 shops for 3-1/2 months detected in the search pertains to assessee's business, then certainly the correctness of the income returned for regular assessment has to be tested against the 2 income to be determined from the turnover to be estimated for the whole year by taking up the turnover for 3-1/2 months. In our view the Tribunal being a fact finding authority had the duty to verify the records and see whether assessment under Section 158BD is made based on materials collected about the assessee in the course of search of another person. In this case, the search is stated to be in respect of a sister concern of the assessee and therefore likelihood of the recorded documents as pertaining to assessee's business is very much there. Even though the Tribunal talks about the assessee-firm, it has not examined as to who are the common partners to make it the searched assessee a sister concern. In our view, the Tribunal has rendered the decision without reference to facts and without noticing the findings in the assessment as well as in the order of the first appellate authority. We therefore set aside the order of the Tribunal and remand the matter back to the Tribunal for reconsideration on merits after going through the records and after hearing both sides. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk 3