Sri. K.M.Ahamed Nizar, Kasargode V. ACIT, Calicut

ITA 449/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64867 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 23-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SREENIVASU KOLLIPAKA
• Assessee Lawyers: C B M WARRIER

Judgement Text

1 ITA NO. 449/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T.A NO. 449/COCH/2010 (ASSESSMENT YEAR 2006-07) SHRI K.M. AHMED NIZAR VS A.C.I.T., CENT.CIR.1 PADHOOR HOUSE CALICUT THEKKIL POST, KASARGODE PAN : AFDPA4599N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CBM WARRIER RESPONDENT BY : SHRI SREENIVASU KOLLIPAKA DATE OF HEARING : 17-09-2012 DATE OF PRONOUNCEMENT : 12-10-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX(A)-I, KOCHI DATED 25 TH MARCH, 2010. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS IN RE SPECT OF RECEIPT OF RS. 13,50,000. 3. SHRI CBM WARRIER, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT RS.13,50,000 WAS PAID OUTSIDE THE COUNTRY TO THE SE LLER OF THE PROPERTY OUT OF PROFESSIONAL INCOME OF DR K.P. ALI. ACCORDING TO TH E LD.REPRESENTATIVE, DR K.P. ALI 2 ITA NO. 449/COCH/2010 HAS SUFFICIENT CREDITWORTHINESS TO PAY RS.13,50,000 AT DUBAI. THE LD.REPRESENTATIVE SUBMITTED THAT THE TAXPAYER HAS F ILED CONFIRMATION LETTER AND OTHER DETAILS TO PROVE THE CREDITWORTHINESS BEFORE THIS TRIBUNAL. 4. ON THE CONTRARY, SHRI SRINIVASU KOLLIPAKU, THE LD. DR SUBMITTED THAT THE TAXPAYER HAS NOT FILED ANY MATERIAL BEFORE THE ASSE SSING AUTHORITY TO PROVE THE CREDITWORTHINESS OF THE CREDITOR. ACCORDING TO THE LD.DR THE CREDITWORTHINESS OF THE CREDITOR HAS TO BE PROVED ONLY BY THE TAXPAYER FOR CLAIMING ANY RECEIPT OF MONEY. THE CONFIRMATION LETTER AND OTHER DETAILS F ILED BY THE TAXPAYER BEFORE THIS TRIBUNAL WERE NOT AVAILABLE BEFORE THE ASSESSI NG AUTHORITY. THEREFORE, THE LOWER AUTHORITY HAD NO OCCASION TO CONSIDER THE SAM E. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY THE L D.DR, THE TAXPAYER HAS NOT FILED CONFIRMATION LETTER OR OTHER DETAILS TO PROVE THE C REDITWORTHINESS OF DR K.P. ALI. IT IS WELL SETTLED PRINCIPLES OF LAW THAT THE ONUS OF PROVING THE CREDIT AND ESTABLISHING THE CREDITWORTHINESS OF THE CREDITOR I S ON THE SHOULDERS OF THE TAXPAYER. THE TAXPAYER HAS TO PROVE THE FOLLOWING THREE ESSENTIAL ELEMENTS FOR CLAIMING ANY CREDIT: I) IDENTITY OF THE CREDITOR; II) CREDITWORTHINESS OF THE CREDITOR; AND III) GENUINENESS OF THE TRANSACTION. SINCE THESE FACTS WERE NOT ESTABLISHED BEFORE THE L OWER AUTHORITIES, THE CLAIM OF THE TAXPAYER TO THE EXTENT OF RS. 13,50,000 WAS DIS ALLOWED. THE TAXPAYER HAS NOW FILED BEFORE THIS TRIBUNAL THE CONFIRMATION LET TER FROM DR K.P. ALI. ACCORDING 3 ITA NO. 449/COCH/2010 TO THE LD.COUNSEL FOR THE TAXPAYER THIS CONFIRMATIO N WOULD PROVE THE CREDITWORTHINESS OF THE CREDITOR. THE FACT REMAINS IS THAT THE CONFIRMATION LETTER WAS NOT AVAILABLE BEFORE THE ASSESSING OFFICER. TH EREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING AUTHORITY HAS TO FIRST EXAMINE THE CREDITWORTHINESS OF THE CREDITOR ON THE BASIS OF TH E MATERIAL FILED BY THE TAXPAYER. ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES ARE SE T ASIDE AND THE ISSUE OF ADDITION OF RS.13,50,000 AS CREDIT FROM DR K.P. ALI IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUE ON THE BASIS OF THE MATERIAL FILED BEFORE THIS TRIBUNAL AN D ALSO THE MATERIAL THAT MAY BE FILED BY THE TAXPAYER BEFORE THE ASSESSING OFFICER AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPO RTUNITY TO THE TAXPAYER. 6. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE T AXPAYER IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH OCTOBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 12 TH OCTOBER, 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