COMMISSIONER OF INCOME TAX, MANGALORE AND THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1 (1), MANGALORE Vs. SRI. SUNILA KEERTHI, C/O. HOTEL PANCHAMI, OPP. K.S.R.T.C BUS STAND, MANGALORE

JUDGEMENT

(1.) B . Manohar , J. -These appeals are filed by the Revenue being aggrieved by the order dated 21 -4 -2006 passed by the Income Tax Appellate Tribunal in ITA No. 2084 & 2189/BANG/2004 confirming the order dated 21 -05 -2004 passed by the Commissioner of Income Tax (Appeals) (in short 'CIT (Appeals) Bangalore in ITA No.117/MNG/CIT(A)MNG/2002 - 03 modifying the order passed by the Assessing Authority. The facts of the case are as follows: The respondent -assesses is a partner of Hotel Panchami and also an agriculturist. For the assessment year 1997 -1998, the assesses filed return of income declaring taxable income of Rs.6,07,890/ -. The return was processed under Section 143(1) and after issuing notice under Section 143(2), completed the assessment on 31 -3 -2000 assessing the taxable income at Rs.78,96,970/ -. The assesses being aggrieved by the assessment of the taxable income preferred an appeal before the CIT (Appeals). The Appellate Authority by its order dated 20 -10 -2000 set aside the assessment order dated 31 -3 -2000 and remitted the matter for reconsideration. After remand, the Assessing Authority reassessed the taxable income and held that the taxable income is at Rs.30,10,330/ -. Being aggrieved by the fresh assessment order passed by the Assessing Authority, the respondent preferred an appeal before the CIT (Appeals) in ITA No.117/MNG/CIT(A) MNG 2002 -2003. The Appellate Authority after considering the matter in detail gave relief to the assesses to an extent of Rs.20,55,108/ -. The assesses being not satisfied with the order passed by the CIT (Appeals) preferred an appeal before the Income Tax Appellate Tribunal. Further, the Revenue being aggrieved by the order passed by the CIT (Appeals) insofar as deletion of Rs.10,00,000/ - under the Heading of unaccounted payment made to Sri. Veerendra for transfer of 17 cents of land. The Income Tax Appellate Tribunal after considering the matter upheld the order passed by the CIT (Appeals) and dismissed the appeal filed by the Revenue insofar as deletion of Rs.10,00,000/ - towards the payment made to Sri. Veerendra and allowed the appeal filed by the assesses insofar as the relief which was denied by the CIT (Appeals) by its order dated 21 -4 -2006. Being aggrieved by the same, the Revenue has preferred these appeals.

(2.) SINCE common question of law is involved in these appeals and common order is passed by the Income Tax Appellate Tribunal, Bangalore in respect of the same assessment year and between the same parties, both the appeals are taken up together and disposed of by this common judgment.

(3.) SRI . E.I. Sanmathi, learned counsel appearing for the appellant contended that the order passed by the Appellate Tribunal as well as the First Appellate Authority is contrary to law. As per the Memorandum of Agreement dated 01 -04 -1996 entered into between the respondent -assesses and his brother Veerendra, the assessee has to pay to his brother Rs.20,00,000/ - for use of 17 cents of land in Sy.No.118 -8A/1A/1B(P) situated at Municipal limits of Moodbidri and constructed a commercial complex to an extent of 11.095 sq. ft. of built up area. Rs.20,00,000/ - has to be paid on or before 01 -04 -1997. The assessee has not shown the source of income for the payment made to his brother. Hence, Rs.10,00,000/ - paid to his brother has to be treated as undisclosed sources and he has to pay tax on the said amount.