C.P.ABDURAHIMAN V. COMMISSIONER OF INCOME TAX

ITA/409/2010

AI Insights

The case involves an appeal by C.P. Abdurahiman against the decision of the Income Tax Appellate Tribunal, which confirmed the addition of unexplained cash credits to the assessee's income. The appellant, a partner in a jewellery business, was found during a search that only a small portion of sales were accounted for. The appellant claimed that his brothers gifted him substantial amounts, but failed to prove the creditworthiness, genuineness, and capacity of the donors. The Tribunal and subsequently the High Court dismissed the appeal, citing established legal precedents that placed the burden of proof on the assessee to substantiate such claims.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 755950 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 29-02-2012
• Assessment Year: misc
• Other Referred Cases: Sandeep Kumar v. Commissioner of Income Tax (2007) 293 ITR 294, Commissioner of Income Tax v. P. Mohanakala (2007) 291 ITR 278(SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K R M MENON; JOSE JOSEPH
• Assessee Lawyers: ANIL NAIR; NIVEDITA KAMATH
• Keywords: Credit-worthiness; Genuineness; Unaccounted income; Unexplained cash credits; Capacity of donors
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HON'BLE MR. JUSTICE BABU MATHEW P.JOSEPH WEDNESDAY, THE 29TH DAY OF FEBRUARY 2012/10TH PHALGUNA 1933 ITA.No. 409 of 2010 ( ) ----------------------- ITA.903/COCH/2008 OF INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH ------------ APPELLANT/APPELLANT IN ITA : ------------------------------------------------ C.P. ABDURAHIMAN, CHITTAKATH POTTAMMAL HOUSE, MALAPPURAM BY ADVS.SRI.ANIL D. NAIR SRI.NIVEDITA A. KAMATH RESPONDENT IN ITA : -------------------------------- COMMISSIONR OF INCOME TAX, KOZHIKODE - 673 001. BY ADV. SRI.P.K.R.MENON, SR.COUNSEL, GOI (TAXES) BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 29-02-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- ITA.No. 409 of 2010 ( ) APPENDIX PETITIONER'S ANNEXURE : ANNEXURE -A : COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2005-06 ISSUED BY THE INCOME TAX DEPARTMENT TO THE APPELLANT. ANNEXURE -B : COPY OF THE ORDER DATED 24.6.2008 FOR THE YEAR 2005-06 ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS) TO THE APPELLANT. ANNEXURE -C : COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN DATED 12.8.2010 ISSUED TO THE APPELLANT. RESPONDENT'S EXHIBITS : NIL //TRUE COPY// P.S. TO JUDGE Mn C.N. RAMACHANDRAN NAIR & BABU MATHEW P. JOSEPH, JJ. ---------------------------------------------------- I.T. Appeal No. 409 OF 2010 ----------------------------------------------------- Dated this the 29th day of February, 2012 J U D G M E N T Ramachandran Nair, J Heard the counsel for the appellant and also the Standing Counsel for Revenue. 2. The question raised only relates to the addition of unexplained cash credits found in the accounts of the assessee. Assessee is a partner in jewellery business. During search in the business premises of the assessee, it was noticed that only small portion of the sales are accounted. While the finding of the Audit is that unaccounted sales proceeds are introduced in the accounts the assessee took a defence that two brothers gifted 5.5. lakhs and 5 lakhs each. However, the assessee could not I.T. Appeal No. 409 OF 2010 :2 : establish the credit worthiness, genuineness and capacity of the donors. Consequently the unexplained cash credits were treated as unaccounted income and assets in the hands of the assessee. On appeal by the assessee the Tribunal relied on the decision of the Division Bench in Sandeep Kumar v. Commissioner of Income Tax (2007) 293 ITR 294 and decision of the Hon'ble Supreme Court in Commissioner of Income Tax v. P. Mohanakala (2007) 291 ITR 278(SC) and confirmed the assessment against which this appeal is filed. 3. After hearing the counsel for both the sides and on going through the Tribunal's order, we do not find any substantial question of law arising from the findings of the Tribunal because it is only a case of assessee's failure to establish the cash credits with acceptable evidence about the genuineness, capacity and creditworthiness of the donors and the details and the accounts of donors. We, I.T. Appeal No. 409 OF 2010 :3 : therefore do not find any merit in the appeal and the same is dismissed. Sd/-C.N. RAMACHANDRAN NAIR, JUDGE. Sd/- BABU MATHEW P. JOSEPH, JUDGE. ul/- [True copy] P.S. to Judge. "