IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY WEDNESDAY, THE 12TH JANUARY 2011 / 22ND POUSHA 1932 ITA.No. 106 of 2010() --------------------- AGAINST THE ORDER IN ITA.50/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT --------------------------------------- THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- P.A.BASHEER, PALAYANKODE HOUSE, KRISHNAPURAM ROAD, KALATHODE, THRISSUR. ADV. SRI.T.M.SREEDHARAN FOR R1 SRI.V.P.NARAYANAN FOR R1 SMT.C.K.SHERIN FOR R1 THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. ---------------------------------- I.T.A. No.106 of 2010 --------------------------------- Dated, this the 12th day of January, 2011 J U D G M E N T Ramachandran Nair, J. This appeal is filed by the Revenue against the order of the Tribunal confirming the CIT (Appeal)'s order partly sustaining the additions and partly cancelling the assessment on various heads. The assessment completed is one under Section 158 BC for the block period from 01/04/1989 to 28/02/2000. 2. We have heard Shri. P.K.R.Menon, learned Senior counsel appearing for the appellant Revenue and Shri.T.M.Sreedharan, learned counsel appearing for the respondent assessee. 3. After hearing both sides and after going through the orders impugned, we notice that the main issue raised by the Department, that Rs.10 lakhs being the value of stock found in the shop at Kanhangad should be treated as the income of the assessee based on the statement given by him to the Income Tax Department, is not accepted by the Tribunal. Even though the ITA No.106/2010 -2- assessee in the statement recorded under Section 132(4) of the Income Tax Act stated that he is running the business, it is seen that his son Shri.Bosky is carrying on business in the said shop under sales tax registration obtained from the State Government and he is filing return for the income earned by him from 1999- 2000 onwards. It is the finding of the appellate authorities that the assessee's son is filing return for the income from the same business. So much so, we do not find any ground to interfere with the order of the Tribunal declining to sustain the additions merely based on the statement given by the assessee under Section 132(4) of the Act. In our view the evidence has to be taken along with other materials on record and the assessee's son Shri.Bosky had taken registration and is carrying on business in the shop and is returning income from the said business. All these cannot be ignored and superseded by a mere statement by the assessee to the Department that the business belongs to him. In view of the finding of fact recorded by the Tribunal, this Court will not be justified in interfering with their finding. In this view of the matter, value of stock found at the business place at Kanhangad was rightly held by the Tribunal as not assessable as assessee's income. 4. Further it is seen that the said shop had liability of above Rs.2.4 lakhs, which is also not seen allowed by the Assessing ITA No.106/2010 -3- Officer. However, this claim was also found to be genuine by the appellate authorities and therefore, we do not find any justification to sustain the addition of this amount towards assessee's income. 5. The next question raised pertains to disallowance of exemption claimed under Section 54E for the capital gain received by the assessee on the sale of 15 cents of land at Mannuthy. Here again we notice that the appellate authority on facts found that the building was constructed though in the name of assessee's wife, it belonings to him and so much so, the reinvestment of the sale proceeds in the house newly constructed entitle the assessee for the benefit under Section 54E. Therefore, we do not find any ground to interfere with the finding of the Tribunal on this issue. The remain questions raised are also with regard to the finding on facts by the Tribunal. Since no substantial question of law is arising from the order of the Tribunal, we dismiss the Appeal filed by the Department. (C.N.RAMACHANDRAN NAIR, JUDGE) (BHABANI PRASAD RAY, JUDGE) jg