IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN THURSDAY, THE 2ND JUNE 2011 / 12TH JYAISHTA 1933 ITA.No. 177 of 2001() --------------------- AGAINST ORDER IN ITA.277/COCH/1998 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 11/07/2001 .................... APPELLANT / APPELLANT -------------------- THE COMMISSIONER OF INCOME TAX, KOTTAYAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENT(S): / RESPONDENT --------------- M/S.NIRMALA FINANCE, KANJIRAPPALLY. ADV. SRI.E.K.NANDAKUMAR FOR R SRI.A.K.JAYASANKAR NAMBIAR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 02/06/2011, ALONG WITH ITA NOS. 206, 211 OF 2001 & 9 OF 2003 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... I.T.A. Nos.177, 206, 211 of 2001 & 9 of 2003 .................................................................... Dated this the 2nd day of June, 2011. J U D G M E N T Ramachandran Nair, J. Heard learned Standing Counsel for the Department and Shri.Jayasankar learned counsel appearing for the respondent assessee. 2. These connected appeals arise from the revised income tax assessments completed under Section 147 of the Income Tax Act on the respondent assessee for the years 1989-90 to 1992-1993. The issue involved is addition of cash credit / unexplained investment in respect of various deposits retained in the account of the respondent assessee in the name of various persons. Even though, the depositors were not traced out or identified, two sister concerns of the respondent assessee came forward offering interest income on these deposits as undisclosed income, and the settlement ITA Nos.177, 206, 211 of 2001 & 9 of 2003 2 Commission accepted the claim of those two sister concerns, namely Nirmala Trust and Amala Finance, and allowed settlement in their cases. 3. Even though, learned Standing Counsel contended that the amounts held in the account of the respondent are completely assessable as cash credit because the credits were not proved, learned counsel for the respondent assessee contended that once the income from deposits is assessed in the hands of two others, the credits ceased to be unexplained and in fact stands explained as amounts deposited by those concerns. It is this explanation that was acted by the Tribunal for allowing the appeals. We do not think a different view than what is taken by the Tribunal is possible because once the sister concerns are assessed on the interest income from the very same deposits, the deposits cannot be treated as unexplained cash credit or unexplained investment on the respondent assessee. In view of the above factual position, based on which the ITA Nos.177, 206, 211 of 2001 & 9 of 2003 3 Tribunal allowed the appeals, we decline to interfere with the orders of the Tribunal. Accordingly, these Income Tax Appeals are dismissed. (C.N.RAMACHANDRAN NAIR, JUDGE) (P.S.GOPINATHAN, JUDGE) jg