DCIT, Thrissur V. Chinnasons Jewellers, Perinthalmanna

ITA 1126/COCH/2005

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61493 (ITAT-COCHIN)
• Duration Of Justice: 6 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• 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: VIJAYAPRABHA
• Assessee Lawyers: JOSE POTTOKKARAN
• Keywords: Block assessment

Judgement Text

1 ITA NO. 1126/COCH/2005 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. 1126/COCH/2005 (ASSESSMENT YEAR 2002-03) THE DY.CIT, CENT.CIR VS M/S CHINNAN SONS JEWELL ERS TRICHUR CALICUT ROAD, PERINTHALMANNA PAN : AACFC7130R (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. VIJAYAPRABHA RESPONDENT BY : SHRI JOSE POTTOKKARAN DATE OF HEARING : 18-04-2012 DATE OF PRONOUNCEMENT : 08-06-2012 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)-, KOCHI DATED 01-08-2005 AND PERTAINS TO ASSESSMENT YEAR 2002-03. 2. THE ONLY GROUND RAISED BY THE REVENUE IS WITH RE GARD TO ADDITION MADE BY THE ASSESSING OFFICER TOWARDS GOLD PURCHASED FROM THE P ARTNER AND THEIR FAMILY MEMBERS. 3. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS PURCHASED GOLD FROM THE PARTNERS TO THE EXTENT OF RS.58,33,000 AND GOLD PURCHASED FROM THE FAMILY MEMBERS OF THE PARTNERS TO THE EXTENT OF RS.43,80,0 00. ACCORDING TO THE LD.DR, THE ASSESSEE COULD NOT PRODUCE ANY MATERIAL BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE THE CREDITWORTHINESS OF THE PURCHASER / CREDITOR. IN T HE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD.DR, THE ASSESSING OFFICER HAS MADE THE AD DITION. THE LD.DR FURTHER SUBMITTED THAT WHEN THE CREDIT WAS FOUND IN THE BOOKS OF ACCO UNT OF THE ASSESSEE IT IS FOR THE 2 ITA NO. 1126/COCH/2005 ASSESSEE TO ESTABLISH THE CREDITWORTHINESS OF THE C REDITOR, IDENTITY OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. IN THIS CASE, THOU GH THE IDENTITY OF THE CREDITOR WAS ESTABLISHED, THE CREDITWORTHINESS AND THE GENUINENE SS OF THE TRANSACTION WAS NOT ESTABLISHED. THEREFORE, ACCORDING TO THE LD.DR THE COMMISSIONER OF INCOME-TAX(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 4. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE PURCHASE OF GOLD JEWELLERY FROM THE PARTNERS AND FAMILY MEMBERS OF THE PARTNERS WERE DELETED IN THE BLOCK ASSESSMENT A PPEALS BY THE COMMISSIONER. BY FOLLOWING THE REASONS STATED BY THE COMMISSIONER, T HE ADDITION WAS DELETED IN THE REGULAR ASSESSMENT ALSO. ACCORDING TO THE LD.REPRE SENTATIVE ONCE THE ASSESSEE AND THE PARTNERS AND THEIR FAMILY MEMBERS FILED THE REGULAR RETURNS DISCLOSING SUFFICIENT INCOME FOR PURCHASE OF GOLD AND GOLD JEWELLERY THERE CANNO T BE ANY ADDITION IN THE BLOCK ASSESSMENT. FROM THE INCOME RETURNED TO THE DEPART MENT IN THE REGULAR COURSE, THE CREDIT WAS ALSO GIVEN TO THE ASSESSEE FIRM. THEREF ORE, THE COMMISSIONER OF INCOME- TAX(A) HAS RIGHTLY DELETED THE ADDITION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CLAIM OF THE ASS ESSEE THAT THE PARTNERS AND FAMILY MEMBERS OF THE PARTNERS OF THE ASSESSEE FIRM WERE D ISCLOSING SUFFICIENT INCOME REGULARLY IN THE RETURNS FILED WITH THE DEPARTMENT IN THE REG ULAR COURSE BEFORE THE DATE SEARCH. WHEN SUFFICIENT FUNDS ARE AVAILABLE AS PER THE RETU RNS FILED BY THE ASSESSEE BEFORE THE DATE OF SEARCH THE DEPARTMENT CANNOT SAY THAT THE P ARTNERS AND THEIR FAMILY MEMBERS HAD NO SOURCE OF INCOME FOR PURCHASING THE GOLD JEW ELLERY AND FOR GIVING CREDIT TO THE ASSESSEE. THE ASSESSEE FILED THE COPIES OF THE RET URN FILED BY THE RESPECTIVE PARTNERS AND THEIR FAMILY MEMBERS. THIS ISSUE WAS ALSO EXAM INED BY THIS TRIBUNAL IN THE INDIVIDUAL ASSESSMENT OF THE PARTNERS AND THEIR FAM ILY MEMBERS. SINCE THE RETURNS WERE FILED REGULARLY IN THE REGULAR COURSE BEFORE THE DA TE OF SEARCH, THIS TRIBUNAL FOUND THAT THE ACCUMULATED INCOME WAS USED FOR PURCHASE OF GOL D JEWELLERY WHICH WAS 3 ITA NO. 1126/COCH/2005 SUBSEQUENTLY GIVEN TO THE ASSESSEE FIRM. IN VIEW O F THE FINDINGS RECORDED BY THIS TRIBUNAL IN THE INDIVIDUAL ASSESSMENT OF THE PARTNE RS AND THEIR FAMILY MEMBERS THIS TRIBUNAL IS OF THE OPINION THAT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED THE ADDITION. IN THE CIRCUMSTANCES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08 TH JUNE, 2012. (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 08 TH JUNE, 2012 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