COMMISSIONER OF INCOME TAX Vs. P.M. ABOOBACKER

JUDGEMENT

(1.) This appeal is filed by the Revenue against the order passed by the Income-tax Appellate Tribunal, Cochin Bench in ITA No. 267/Coch/2009 with reference to the assessment year 2006-2007.

(2.) The facts involved in the above case would disclose that the assessee, owner of a shopping complex, submitted his return of income for the assessment year on 15.11.2007. The assessing officer, while making the assessment under Section 143(3), had completed the assessment determining the total income at Rs. 1,05,85,935/-. While determining the said amount as the income, the Assessing Officer included an amount of Rs. 54,20,000/- as undisclosed investment. This was based on an information obtained during search and seizure operation at the residence of Mr. P.A. Noushad. He had given information stating that he had sold 19.5 cents of land to the assessee. He also disclosed that though the price mentioned in the sale deed was only Rs. 24,00,000/-, he had actually paid Rs. 78,20,200/-. He had also stated that he purchased the said property from one Mrs. M.S. Mariamma Kurian for Rs. 66,20,000/-, though the price mentioned in the said sale deed was only Rs. 21,75,000/-. It is based on this factual situation that the return of the assessee was finalised. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who allowed the appeal deleting the said addition. The revenue carried the matter before the Tribunal and the Tribunal dismissed the appeal based on the judgments of the Supreme Court in K.P. Varghese v. Income-tax Officer, Ernakulam and another, 1981 131 ITR 597and Commissioner of Income-tax v. P.V. Kalyanasundaram, 2007 294 ITR 49.

(3.) While impugning the aforesaid orders of the appellate authorities, the revenue relies upon the decision in Commissioner of Income-tax v. Medical Trust Hospital and others, 2008 220 CTR(Ker) 166 to contend that subsequent retraction of the statement has to be ignored when the said person had declared the higher value in his return of income and paid tax thereon. The revenue has raised the following substantial questions of law: