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 THURSDAY, THE 13TH MARCH 2008 / 23RD PHALGUNA 1929 ITA.No. 39 of 2004() -------------------- ITA.246/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: --------------------------- M/S.SHETH BROTHERS, ALAPPUZHA. BY ADV. SRI.A.KRISHNAN RESPONDENTS: ------------- 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - I, ALAPPUZHA. 2. THE COMMISSIONER OF INCOME TAX(APPEALS) -IV, KOCHI. 3. INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, KOCHI. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT FOR R1 & 2 SRI.GEORGE K. GEORGE, SC FOR IT FOR R1 & 2 THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13/03/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & T.R.RAMACHANDRAN NAIR, JJ. .................................................................... I.T. Appeal No.39 of 2004 .................................................................... Dated this the 13th day of March, 2008. JUDGMENT C.N.Ramachandran Nair, J. Heard counsel for the appellant and Senior Standing Counsel for the respondents. We do not find any ground to interfere with the order of the Tribunal because the questions raised both on limitation against re- assessment under Section 147 after issuing notice under Section 148 and the justification for the addition are based on pure finding of facts. On limitation the Income Tax Appellate Tribunal found that the first notice for reopening was issued in time and the addition was found to be attributable to disallowance of deduction of interest paid which is not allowable under the Act. The assessee also does not dispute that notice under Section 147 was served within the time limit. However, the assessee's case is that when a second notice is issued, time limit has to be computed with reference to the issue of second notice. We are unable to accept this proposition because Section 153 of the Act provides for limitation with reference to the first statutory notice issued. So far as the merits of the case is concerned, it is seen that petitioner has accounted only net interest which has resulted in 2 escapement of Rs.60,608/- towards interest received from Bank. The deduction of interest claimed by the petitioner and set off of the same is not permissible under the Act. We, therefore, find that the Tribunal rightly rejected the claim of the assessee. The appeal is accordingly dismissed. C.N.RAMACHANDRAN NAIR Judge T.R.RAMACHANDRAN NAIR Judge pms