DCIT, Thrissur V. Janatha Jewellery, Thrissur

ITA 1125/COCH/2005

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61505 (ITAT-COCHIN)
• Duration Of Justice: 6 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 14-11-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: JOSE POTTOKKARAN

Judgement Text

1 ITA NO. /COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 1125/COCH/2005 (ASSESSMENT YEAR 2002-03) THE DY.CIT, CENT.CIR. VS M/S JANATHA JEWELLERY THRISSUR M.O. ROAD, THRISSUR PAN : AADFP1084C (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI JOSE POTTOKKARAN DATE OF HEARING : 18-04-2012 DATE OF PRONOUNCEMENT : 01-06-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX(A)-I, KOCHI DATED 01-08-2005 AND PERTAIN S TO THE ASSESSMENT YEAR 2002-03. 2. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.14,25,000 IN RESPECT OF GOLD PURCHASED FROM P ARTNERS AND CREDITS FOUND IN THE NAME OF SHRI M.C. CHINNAN. ACCORDING TO THE LD.REP RESENTATIVE, THE ASSESSEE HAS NOT ESTABLISHED THE CREDITWORTHINESS OF THE PARTNERS TO GIVE SUCH KIND OF LOAN AND CREDITS. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) IS NOT CORRECT IN DELETING THE ADDITION. 3. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT ALL THE PARTNERS, WHO CONTRIBUTED GO LD AND ADVANCED MONEY FILED THEIR RETURNS OF INCOME DISCLOSING SUFFICIENT FUNDS AND T HE SAME WAS ACCEPTED BY THE 2 ITA NO. /COCH/2010 DEPARTMENT. ONCE THE DEPARTMENT ACCEPTED THE RETUR NS FILED BY THE ASSESSEE IN THE REGULAR COURSE, ACCORDING TO THE LD.REPRESENTATIVE, THERE CANNOT BE ANY ADDITION IN THE HANDS OF THE PRESENT ASSESSEE. THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT THE ASSESSEE HAS ESTABLISHED THE IDENTITY, CREDITWORTHI NESS AND GENUINENESS OF THE TRANSACTION. ONCE IT IS ESTABLISHED THAT THE AMOUN TS WERE INVESTED BY THE PARTNERS, THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT THERE CANN OT BE ANY ADDITION. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, IN VIEW OF THE MATERIAL AVAILABLE ON RECORD TO SHOW THAT THE PARTNERS HAD SUFFICIENT FUNDS TO ADVANCE C REDIT AND GOLD JEWELLERY, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED T HE ADDITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICE R MADE ADDITION OF RS.4,92,000 IN RESPECT OF GOLD PURCHASED FROM ONE OF THE PARTNERS AND RS.5,33,000 ON ACCOUNT OF GOLD PURCHASED FROM FAMILY MEMBERS OF THE PARTNERS AND C REDIT FOUND IN THE NAME OF ANOTHER PARTNER SHRI M.C. CHINNAN TO THE EXTENT OF RS.4 LAKHS. THE ASSESSEE HAS PRODUCED THE COPIES OF THE RETURNS FILED BY THE RES PECTIVE PARTNERS AND CREDITORS IN THE REGULAR COURSE. WHEN THE PARTNERS, WHO ADVANCED GO LD AND CREDITS HAVE SUFFICIENT INCOME WHICH HAVE BEEN DISCLOSED TO THE DEPARTMENT IN THE REGULAR COURSE, THE DEPARTMENT CANNOT DOUBT THE CREDITWORTHINESS OF THE PARTNERS. AS FOUND BY THIS TRIBUNAL IN THE CASE OF CHINNANSONS JEWELLERY IN IT A NO.396/COCH/2006 & ORS ORDER DATED 16-01-2008 WHEN THERE IS SPEAKING NEXUS BETWE EN THE SOURCE OF INCOME OF THE PARTNERS AND APPLICATION THEREOF, THERE CANNOT BE A NY ADDITION. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LO WER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 ST JUNE, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 01 ST JUNE, 2012 3 ITA NO. /COCH/2010 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH