COMMISSIONER OF INCOME TAX Vs. P.K. NARAYANAN

JUDGEMENT

(1.) THESE references arise from the order of the Tribunal, Cochin Bench in ITA Nos. 868 and 610/Coch/1990 -91. Assessment years are 1986 -87, 1987 -88 and 1988 -89. The facts of the case are as follows :

(2.) ASSESSEE is a partner in certain partnership firms. The dispute which was taken before the Tribunal is regarding the inclusion of income derived from the business of M/s Archana Jewellery in the hands of the assessee. According to the Revenue, the business of M/s Archana Jewellery was ostensibly carried on by one A.N. Chellappan. But it was really the business of the assessee. This inference was drawn on the basis of certain materials seized in the course of a search under Section 132 of the IT Act in the premises of the assessee. Such a view had been held by the Revenue for and from the asst. yr. 1979 -80. The Revenue drew support from the order of the Tribunal dt. 14th March, 1986 in the assessee's own case in which it was held that the assessee was the real owner of the business of M/s Archana Jewellery and that Chellappan was only a name lender. For the assessment years in question, the AO relied on his findings for the earlier years and also on the findings of the Tribunal. For the same reason, the assessment was upheld by the first appellate authority.

(3.) SO far as the proceedings against the penalty is concerned, it was disposed of by judgment reported in CTT v. P.K. Narayanan : [1999]238ITR905(Ker) . For the purpose of penalty, it was held' that the Department has not discharged its function to prove that there has been intentional suppression.