Mr Sunny jacob, Kottayam V. DCIT, Kottayam

ITA 694/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64955 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S BINDU
• Keywords: Gift
• Section: 153A

Judgement Text

1 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 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. 693/COCH/2010 (ASSESSMENT YEAR 2008-09) M/S SUNNY JACOB 916 JEWELLERY VS THE DY.CIT, CENT .CIR. FORT MANOR, POWER HOUSE ROAD KOTTAYAM THIRUVANANTHAPURAM PAN : AAZFS6972L (APPELLANT) (RESPONDENT) I.T.A. NOS 23, 24, 25, & 26/COCH/2011 (ASSESSMENT YEARS 2004-05, 2005-06, 2006-07 & 2007-08) DY.CIT, CENT.CIR VS M/S SUNNY JACOB 916 JEWELLE RY KOTTAYAM THIRUVANANTHAPURAM (APPELLANT) (RESPONDENT) I.T.A NO. 696/COCH/2010 (ASSESSMENT YEAR 2008-09) M/S SUNNY JACOB JEWELLERS GOLD HYPER MARKET VS THE DY .CIT, CENT.CIR. C/O HOTEL DONA CASTLE KOTTAYAM NEAR LAKSHMINADA TEMPLE KOTTAMUKKU, KOLLAM PAN : AATFS6449J (APPELLANT) (RESPONDENT) I.T.A. NOS.36, 37, 38, 39 & 40/COCH/2011 (ASSESSMENT YEARS 2003-04, 2004-05, 2005-06, 2006-07 & 2007-08) 2 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 DY.CIT, CENT.CIR VS M/S SUNNY JACOB JEWELLERS KOTTAYAM KOTTAMUKKU, KOLLAM (APPELLANT) (RESPONDENT) I.T.A NO. 695/COCH/2010 (ASSESSMENT YEAR 2008-09) M/S SUNNY JACOB JEWELLERIES & WEDDING CENTRE VS THE DY.CIT, CENT.CIR. CHANTHAMUKKU, KOTTARAKARA KOTTAYAM PAN : ABCFS1711R (APPELLANT) (RESPONDENT) I.T.A. NOS 33, 34 & 35/COCH/2011 (ASSESSMENT YEARS 2005-06, 2006-07 & 2007-08) DY.CIT, CENT.CIR VS M/S SUNNY JACOB JEWELLERIES KOTTAYAM & WEDDING CENTRE, KOTTARAKARA (APPELLANT) (RESPONDENT) I.T.A NO. 690/COCH/2010 (ASSESSMENT YEAR 2008-09) MRS MAGGY SUNNY VS THE DY.CIT, CENT.CIR. C/O SUNNY JACOB JEWELLERS 916 KOTTAYAM KERALA SHOW ROOM, PAZHAVANGADI, THIRUVANANTHAPURAM PAN : AWEPS2481F (APPELLANT) (RESPONDENT) I.T.A. NOS 44 & 45/COCH/2011 (ASSESSMENT YEARS 2006-07 & 2007-08) DY.CIT, CENT.CIR VS MRS. MAGGY SUNNY KOTTAYAM C/O SUNNY JACOB JEWELLERS 916 THIRUVANANTHAPURAM (APPELLANT) (RESPONDENT) 3 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 I.T.A NO. 692 & 694/COCH/2010 (ASSESSMENT YEARS 2001-02 & 2008-09) M/S SUNNY JACOB VS THE DY.CIT, CENT.CIR. KALATHIL HOUSE, MOUNT WARDHA KOTTAYAM KANJIKUZHI, KOTTAYAM PAN : ABWPJ2408C (APPELLANT) (RESPONDENT) I.T.A. NOS 41, 42 & 43/COCH/2011 (ASSESSMENT YEARS 2006-07, 2007-08 & 2008-09) DY.CIT, CENT.CIR VS M/S SUNNY JACOB KOTTAYAM KANJIKUZHI, KOTTAYAM (APPELLANT) (RESPONDENT) I.T.A NO. 691/COCH/2010 (ASSESSMENT YEAR 2008-09) M/S SUNNY JACOB JEWELLERS VS THE DY.CIT, CENT.CI R. CSI GOLDEN JUBILEE COMPLEX KOTTAYAM SASTHRI ROAD, KOTTAYAM PAN : AAQFS3227D (APPELLANT) (RESPONDENT) I.T.A. NOS 27, 28, 29, 30, 31 & 32/COCH/2011 (ASSESSMENT YEARS 2002-03, 2003-04, 2004-05, 2005-06, 2 006-07 & 2007-08) DY.CIT, CENT.CIR VS M/S SUNNY JACOB JEWLLERS KOTTAYAM SASTHRI ROAD, KOTTAYAM (APPELLANT) (RESPONDENT) ASSESSEES BY : SHRI ANIL D NAIR REVENUE BY : MS. A.S. BINDU 4 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 DATE OF HEARING : 10-09-2012 DATE OF PRONOUNCEMENT : 16-11-2012 O R D E R PER N.R.S. GANESAN (JM) ALL THE APPEALS OF THE TAXPAYER AND THE REVENUE AR ISE OUT OF THE SEARCH CONDUCTED BY THE REVENUE ON 21-08-2007. THEREFORE, W E HEARD ALL THE APPEALS TOGETHER AND DISPOSE THEM OFF BY THIS COMMON ORDER. 2. THE FIRST COMMON GROUND IN ALL THE APPEALS OF TH E REVENUE IS WITH REGARD TO THE DELETION OF ADDITION MADE BY THE ASSESSING O FFICER ON ACCOUNT OF SUPPRESSION OF SALES. 3. MS. A.S. BINDU, THE LD.DR SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATION IT WAS FOUND THAT THE TAXPAYER IS NOT ISS UING SALE BILLS FOR SALE OF JEWELLERY. THE JEWELLERY IS BEING SOLD ON THE BASI S OF THE ESTIMATE SLIP ISSUED TO THE CUSTOMERS. THE LD.DR POINTED OUT THAT IN THE C OURSE OF PRE-SEARCH ENQUIRY ON 24-07-2007 A GOLD ORNAMENT PURCHASED BY THE PERSONNEL FROM INVESTIGATION WING OF THE DEPARTMENT. ON PURCHASING 2.040 GMS OF GOLD THE TAXPAYER ISSUED ONLY ESTIMATE SLIP FOR RS.1,940. NO SALE BILL WAS ISSUE D. THIS WAS FURTHER CONFIRMED IN THE COURSE OF ENQUIRY DURING THE COURSE OF SEARCH O PERATION. ACCORDING TO THE LD.DR, THE CASHIER, ONE SHRI JOSHI ABRAHAM WAS EXAM INED, WHO STATED THAT ONLY ESTIMATE SLIP WAS ISSUED FOR SALE OF JEWELLERY AND PART OF THE SALES WERE RECORDED THROUGH SALE BILLS. THE LD.DR FURTHER POINTED OUT THAT WHILE PURCHASING OLD GOLD ORNAMENTS, THE TAXPAYER IS NOT ISSUING ANY PURCHASE BILLS. THEREFORE, THERE WAS AN UNACCOUNTED SALES AND PURCHASE OF JEWELLERY AND OLD GOLD ORNAMENTS. THE 5 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 LD.REPRESENTATIVE FURTHER POINTED OUT THAT ONE SHRI PINTU JACOB WAS EXAMINED, WHO STATED THAT HE IS ISSUING THE ESTIMATE SLIP AND IT IS NOT KNOWN WHETHER SALE BILLS WERE ISSUED TO THE CUSTOMERS OR NOT. THE LD. DR FURTHER POINTED OUT THAT IN THE COURSE OF SEARCH IN THE PREMISES OF SUNNY JACOB GOLD HYPER MARKET, KOLLAM THREE NOTE BOOKS MARKED AS MSP-1, MSP-2 & MSP-3 WERE FOU ND AND SEIZED. THESE NOTE BOOKS CONTAINED ACCOUNTS FOR PURCHASE AND ISSUE OF GOLD ORNAMENTS. WHEN THESE NOTE BOOKS WERE COMPARED WITH REGULAR REG ISTER MAINTAINED BY THE TAXPAYER THERE WAS WIDE VARIATION IN THE ACCOUNTING OF PURCHASE AND SALES OF GOLD JEWELLERY. THE LD.REPRESENTATIVE FURTHER POINTED O UT THAT COMMERCIAL TAX DEPARTMENT INSPECTED THE TAXPAYERS PREMISES ON 24-0 2-2006 AND IT WAS FOUND BY THE COMMERCIAL TAX DEPARTMENT THAT THE TAXPAYERS WERE SELLING THE GOLD ORNAMENTS ONLY THROUGH ESTIMATE SLIPS. HOWEVER, TH E COMMISSIONER OF INCOME- TAX(A) DELETED ALL THE ADDITIONS ON THE GROUND THAT THERE WAS NO MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OPERATION. A CCORDING TO THE LD.REPRESENTATIVE, THE MATERIAL AVAILABLE ON RECORD CLEARLY SHOWS THAT THE GOLD JEWELLERY WAS SOLD ON THE BASIS OF THE ESTIMATE SLI P WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT AND NO SALE BILLS WERE ISSUED. RE FERRING TO THE JUDGMENT OF THE KERALA HIGH COURT IN COMMISSIONER OF INCOME-TAX VS HO TEL MERIYA ITA NO.551 OF 2009 AND SUBMITTED THAT THE COMMISSIONER OF INCOME-T AX(A) IS NOT JUSTIFIED IN DELETING THE ADDITION. ACCORDING TO THE LD.DR, DUR ING THE COURSE OF SEARCH OPERATION THE REVENUE AUTHORITIES FOUND THAT THE TA XPAYERS WERE SUPPRESSING THE SALES OF JEWELLERY AND EVEN DURING THE INSPECTION B Y THE COMMERCIAL TAX DEPARTMENT ON 24-02-2006, THE VERY IRREGULARITY WAS NOTICED BY THE COMMERCIAL TAX DEPARTMENT. THEREFORE, ACCORDING TO THE LD.DR, THE COMMISSIONER OF INCOME-TAX(A) HAS COMMITTED AN ERROR IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. THE LD.DR HAS ALSO PLACED HIS R ELIANCE ON THE JUDGMENT OF THE 6 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 ANDHRA PRADESH HIGH COURT IN THE CASE OF RAJNIK & CO VS COMMISSIONER OF INCOME-TAX 251 ITR 561 (A.P.). THE LD.DR FURTHER SU BMITTED THAT FOR THE ASSESSMENT YEAR 2008-09, THE CIT(A) HAS CONFIRMED TH E ADDITION AGAINST WHICH THE TAXPAYER HAS FILED THE APPEAL. 4. ON THE CONTRARY, SHRI ANIL D NAIR, THE LD.COUNSE L FOR THE TAXPAYERS SUBMITTED THAT THE TAXPAYERS ARE IN THE BUSINESS OF RETAIL JEWELLERY. WHENEVER THE CUSTOMERS GO TO THE SHOP THEY WILL SELECT ONE O R TWO DESIGNS AND PATENT AND ASK FOR THE PRICE OF ALL THE ITEMS. THEREFORE, IT I S USUAL PRACTICE IN THIS LINE OF BUSINESS TO PREPARE AN ESTIMATE SLIP FOR ALL THE IT EMS PREFERRED BY THE CUSTOMERS AND THEREAFTER THE CUSTOMER MAY CHOOSE ONE OR TWO I TEMS FOR WHICH SALE BILLS WOULD BE ISSUED. IN SOME CASES, AFTER GETTING ESTI MATE SLIP FOR ONE OR TWO ITEMS WHICH WAS IDENTIFIED BY THE CUSTOMERS THEY MAY NOT PURCHASE ANYTHING AND THE ESTIMATE REMAINS TO BE AN ESTIMATE. THEREFORE, IT IS NOT CORRECT TO SAY THAT THE TAXPAYER IS SELLING ALL THE JEWELLERIES ON ESTIMATE BASIS. ACCORDING TO THE LD.COUNSEL ISSUING ESTIMATE SLIP IS USUAL IN THIS L INE OF BUSINESS; THEREFORE, THE TAXPAYERS CANNOT BE FOUND FAULT WITH. THE LD.COUN SEL FURTHER POINTED OUT THAT THE SEARCH WAS MADE ON 21-08-2007. ALL THE MATERIALS WHICH WERE COLLECTED BY THE REVENUE RELATES TO ASSESSMENT YEAR 2008-09. TH ERE WAS NO OTHER MATERIAL FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08. IN THE ABSE NCE OF ANY MATERIAL FOR SUPPRESSION OF SALE FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08 THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED TH E ADDITION. HOWEVER, FOR THE ASSESSMENT YEAR 2008-09 THE COMMISSIONER OF INCO ME-TAX(A) CONFIRMED THE ADDITION WITHOUT UNDERSTANDING THE NATURE OF BUSINE SS OF THE TAXPAYERS. THE LD.COUNSEL FURTHER POINTED OUT THAT EVEN FOR ASSESS MENT YEAR 2008-09 THOUGH CERTAIN ESTIMATE SLIPS ARE AVAILABLE WITH THE DEPAR TMENT, THESE SLIPS WERE ISSUED 7 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 TO THE CUSTOMERS AT THEIR REQUESTS ON THEIR PURCHAS E. THE CUSTOMER DECIDES TO PURCHASE THE JEWELLERY AFTER IDENTIFYING THE PATENT AND MODEL OF JEWELLERY AFTER COMPARING THE PRICE IN THE ESTIMATE SLIP AND SALE B ILLS WILL BE ISSUED. THEREFORE, THE ADDITION WHICH WAS CONFIRMED BY THE COMMISSIONE R OF INCOME-TAX(A) FOR ASSESSMENT YEAR 2008-09 IS NOT JUSTIFIED. THE LD.CO UNSEL PLACED HIS RELIANCE ON THE DECISION OF THIS TRIBUNAL IN MARTHA ENTERPRISES VS DCIT IN ITA NOS 269 TO 275/COCH/2010 ORDER DATED 24 TH JANUARY, 2011 AND SUBMITTED THAT WHERE NO MATERIAL WAS AVAILABLE WITH RESPECT TO ANY ASSESSME NT YEAR, THERE CANNOT BE ANY ESTIMATION OF SUPPRESSED SALES TURNOVER AND PROFIT. THE LD.COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISION OF THIS TRIBUNAL IN P.A. KURIAKOSE IN ITA NOS.455 TO 461/COCH/2010 DATED 04-05-2011 AND SUBMITTED THAT IN THE ABSENCE OF ANY MATERIAL EVIDENCE FOR ASSESSMENT YEARS 2002-03 TO 20 07-08 THERE CANNOT BE ANY ADDITION. THEREFORE, ACCORDING TO THE LD.COUNSEL, THE COMMISSIONER OF INCOME- TAX(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THERE WAS A SEARC H IN THE PREMISES OF THE TAXPAYER ON 21-08-2007. DURING THE COURSE OF SEARCH OPERATION IT WAS FOUND THAT SOME OF THE SALES WERE EFFECTED WITHOUT SALES BILL BY ISSUING ESTIMATE SLIPS. THE CONTENTION OF THE LD.COUNSEL FOR THE TAXPAYER IS TH AT IT IS USUAL IN THIS LINE OF BUSINESS TO ISSUE ESTIMATE SLIPS WHENEVER THE CUSTO MER IS IN THE PROCESS OF SELECTING GOLD JEWELLERY. ACCORDING TO THE LD.COUN SEL, WHEN THE CUSTOMER DECIDES TO PURCHASE THE JEWELLERY, SALE BILLS ARE ISSUED. HOWEVER, THERE WAS A CONCRETE EVIDENCE TO SHOW THAT THE TAX PAYER WAS ISSUING ONL Y ESTIMATE SLIPS FOR SALE OF JEWELLERY. IN FACT, THE DEPARTMENTAL PERSONNEL PUR CHASED JEWELLERY IN THE COURSE OF PRE-SEARCH ENQUIRY AND THE TAXPAYER ISSUED ONLY E STIMATE SLIP FOR SALE. IT IS ALSO 8 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 ON RECORD TO SHOW THAT SALE BILLS WERE ISSUED ONLY FOR PART OF THE SALES AND THE BALANCE SALES WERE EFFECTED ON ESTIMATE SLIP. THIS WAS CONFIRMED BY THE CASHIER OF THE TAXPAYER, SHRI JOSHI ABRAHAM. FROM THE MATE RIAL AVAILABLE ON RECORD IT APPEARS THAT ONE SHRI A BABU WAS EXAMINED ON 21-08-20 07 DURING THE COURSE OF SEARCH OPERATION. THE SAID A BABY PURCHASED GOLD O RNAMENTS ON 20-08-2007 AFTER EXCHANGING OLD GOLD ORNAMENTS. ON 21-08-2007 T HE SAID A BABY CAME TO THE SHOP TO GET BACK THE OLD GOLD ORNAMENTS SINCE HE WAS NOT SATISFIED WITH THE PURITY OF THE GOLD ORNAMENTS. HE PRODUCED ESTIMATE SLIP NO.17 DATED 20-08-2007 WHICH SHOWS NET WEIGHT OF 12.691 GMS AFTER REDUCI NG 2.599 GMS TOWARDS WEIGHT OF THE STONE. THE TAXPAYER HAS NOT ISSUED ANY PURC HASE BILL FOR THE OLD GOLD ORNAMENT RECEIVED FROM SHRI A BABY AND FOR SALE OF JEWELLERY. THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT THERE WAS NO EVIDENCE FO R THE ASSESSMENT YEARS 2002-03 TO 2007-08 FOR SUPPRESSION OF SALE, THEREFORE , HE DELETED THE ENTIRE ADDITION. HOWEVER, FOR THE ASSESSMENT YEAR 2008-09 THE COMMISSIONER OF INCOME-TAX(A) CONFIRMED THE ADDITION ON THE GROUND T HAT THE EVIDENCE COLLECTED BY THE REVENUE SHOWS SUPPRESSION OF SALES. THE COM MISSIONER OF INCOME-TAX(A) PLACED HIS RELIANCE ON THE JUDGMENT OF THE ANDHRA P RADESH HIGH COURT IN RAJNIK & CO (SUPRA). 6. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF T HE ANDHRA PRADESH HIGH COURT IN THE CASE OF RAJNIK & CO (SUPRA). IN THE CA SE BEFORE THE ANDHRA PRADESH HIGH COURT THERE WAS A SEARCH IN THE BUSINESS PREMI SES OF THE TAXPAYER AND IT WAS FOUND FROM THE LOOSE SHEETS SUPPRESSION OF SALES FO R THE FINANCIAL YEARS 1995-96 TO 1996-97. APART FROM THE MATERIALS RECOVERED AT T HE TIME OF SEARCH SWORN STATEMENT WAS ALSO RECORDED BY THE DEPARTMENT WHERE IN ONE OF THE PARTNERS ADMITTED IN HIS STATEMENT BEFORE THE OFFICERS THAT THE TAXPAYERS FIRM WAS 9 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 PRACTICING SUPPRESSION OF SALES FROM DAY TO DAY BAS IS THROUGH OUT THE ASSESSMENT YEAR NOT ONLY DURING THE ASSESSMENT YEARS 1996-97 AN D 1997-98 BUT ALSO DURING THE EARLIER ASSESSMENT YEARS 1986-87 TO 1995-96. BAS ED ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION AND THE ADMIS SION OF THE PARTNER IN THE SWORN STATEMENT, THE ASSESSING OFFICER MADE ADDITIO N TOWARDS SUPPRESSION OF SALES. THIS WAS CONFIRMED BY THE TRIBUNAL. WHEN T HE MATTER TRAVELLED TO THE HIGH COURT THE HIGH COURT FOUND THAT WITH REFERENCE TO T HE ADDITION MADE FOR ASSESSMENT YEARS 1986-87 TO 1995-96 NO DOUBT THERE IS NO MATERIAL BUT IT IS ADMITTED BY THE PARTNER OF THE FIRM THAT THE TAXPAY ER HAS PRACTICED SUPPRESSION OF SALES TURNOVER. ACCORDINGLY, THE HIGH COURT FOUN D THAT THE AUTHORITIES ARE JUSTIFIED IN MAKING THE ADDITION. IN THE CASE BEFOR E US ALSO THOUGH THE ESTIMATE SLIP FOUND BY THE REVENUE AUTHORITIES RELATE TO ASS ESSMENT YEAR 2008-09 THE CASHIER, SHRI JOSHI ABRAHAM SAID IN HIS STATEMENT T HAT HE IS ISSUING BILLS ONLY FOR PART OF THE SALES AND THE BALANCE SALES WERE EFFECT ED ON ESTIMATE BASIS. THIS STATEMENT OF THE CASHIER WAS IGNORED BY THE COMMISS IONER OF INCOME-TAX(A). MOREOVER, DURING THE INSPECTION BY COMMERCIAL TAX D EPARTMENT ON 24-02-2006 THEY FOUND A SIMILAR PRACTICE ADOPTED BY THE TAXPAY ER IN SALE OF JEWELLERY BY ISSUING ESTIMATE SLIP. THOUGH PROCEEDINGS UNDER TH E COMMERCIAL TAX DEPARTMENT ARE DIFFERENT FROM INCOME-TAX PROCEEDINGS WHILE COMPUTING THE TOTAL INCOME THE MODUS OPERANDI ADOPTED BY THE TAXPAYER C AN BE TAKEN INTO ACCOUNT IN THE INCOME-TAX PROCEEDINGS ALSO. THE INCOME-TAX A UTHORITY HAS TO REAPPRECIATE THE MATERIALS FOUND BY THE COMMERCIAL TAX AUTHORITIES. MOREOVER, ONE MR. PINTU JACOB CLAIMED THAT HE WAS ISSUING ONL Y ESTIMATE SLIP. MOREOVER, SEVERAL INVESTMENT IN THE LANDED PROPERTIES WERE FO UND FROM ASSESSMENT YEAR 2002-03 TO ASSESSMENT YEAR 2008-09. THE AGREEMENT FO R SALE WAS FOUND AND THE ASSESSING OFFICER CLAIMS THAT THE PROFIT ON SUPPRES SED SALES WAS INVESTED IN LANDED 10 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 PROPERTIES. THEREFORE, IT MAY NOT BE CORRECT TO SA Y THAT THERE WAS NO MATERIAL FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08. IN THOSE CI RCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT COMMISSIONER OF I NCOME-TAX(A) IS NOT JUSTIFIED IN DELETING THE ADDITION FOR THE ASSESSMENT YEARS 2002 -03 TO 2007-08. HOWEVER, THE STATEMENT RECORDED FROM THE CASHIER AND OTHER P ERSONS AND THE MATERIAL COLLECTED BY THE COMMERCIAL TAX DEPARTMENT NEEDS TO BE EXAMINED AFTER GIVING AN OPPORTUNITY TO THE TAXPAYER. THE TAXPAYER HAD N O OCCASION TO RESPOND TO THE MATERIAL COLLECTED BY THE SALES-TAX DEPARTMENT DURIN G THEIR INSPECTION ON 24-02- 2006. IT IS ALSO PERTINENT TO NOTE THAT THE IMPUGN ED ASSESSMENT PROCEEDING WAS INITIATED U/S 153A OF THE ACT. IN PROCEEDINGS U/S 153A, THE ASSESSING OFFICER CAN TAKE INTO ACCOUNT ALL THE EVIDENCES / MATERIALS INCL UDING MATERIALS FOUND DURING THE COURSE OF SEARCH OPERATION. THEREFORE, IN ALL FAIRNESS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ONE MORE OPPORTUNITY SHALL BE GIVEN TO THE TAXPAYER TO PRESENT HIS CASE BEFORE THE ASSESSING OFFICER. ACC ORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES FOR THE ASSESSMENT YEARS 2002-03 TO 2007 -08 ARE SET ASIDE AND THE ENTIRE ISSUE WITH REGARD TO ADDITION OF SUPPRESSED SALES IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFIC ER SHALL RECONSIDER THE ISSUE AFRESH AFTER RECONSIDERING ALL THE STATEMENTS RECORDED AND THE MATERIAL FOUND DURING THE COURSE OF INSPECTION BY THE COMMERCIAL TAX DEPA RTMENT, ALL THE MATERIALS INCLUDING THE MATERIALS COLLECTED DURING THE COURSE OF SEARCH OPERATION AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW A FTER GIVING A REASONABLE OPPORTUNITY TO THE TAXPAYERS. 7. NOW COMING TO APPEAL FOR ASSESSMENT YEAR 2008-09 THE COMMISSIONER OF INCOME-TAX(A) CONFIRMED THE ADDITION. THEREFORE, TH E TAXPAYER HAS FILED THE APPEAL BEFORE THIS TRIBUNAL. FOR THE ASSESSMENT YE ARS 2002-03 TO 2007-08 THE 11 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE STATEMENT RECORDED DURING THE COURSE OF SEARCH OPER ATION AND THE OTHER MATERIALS AVAILABLE ON RECORD INCLUDING THE SEIZED MATERIALS. THEREFORE, THE DECISION THAT MAY BE TAKEN FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08 MAY HAVE ITS IMPACT FOR THE ASSESSMENT YEAR 2008-09 ALSO . THEREFORE, FOR THE SAKE OF CONSISTENCY AND TO HAVE COMPREHENSIVE ADJUDICATION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ISSUE FOR THE ASSESSMEN T YEAR 2008-09 ALSO NEEDS TO BE CONSIDERED. ACCORDINGLY, THE ORDERS OF THE LOWE R AUTHORITIES FOR ASSESSMENT YEAR 2008-09 ARE ALSO SET ASIDE AND THE ISSUE OF SUP PRESSED SALES TURNOVER AND PROFIT IS REMITTED BACK TO THE FILE OF THE ASSESSIN G OFFICER. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AFRESH IN LINE WITH THE DIR ECTION ISSUED FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08 AFTER PROVIDING OPPORTUNITY OF HEARING TO THE TAXPAYER. 8. NOW COMING TO APPEAL FOR ASSESSMENT YEAR 2001-02 IN ITA NO.692/COCH/2010 THE COMMISSIONER OF INCOME-TAX(A) C ONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER WITH REGARD TO THE CR EDIT RECEIVED FROM GEORGE JOSEPH. 9. SHRI ANIL D NAIR, THE LD.COUNSEL FOR THE TAXPAYE R SUBMITTED THAT THE TAXPAYER HAS RECEIVED A GIFT OF RS.3,47,580 FROM SH RI GEORGE JOSEPH THROUGH BANKING CHANNEL. ACCORDING TO THE LD.REPRESENTATIVE, THE IDENTITY OF THE CREDITOR WAS PROVED, THE TRANSACTION WAS THROUGH BANKING CHAN NEL; THEREFORE, THE GENUINENESS OF THE TRANSACTION WAS ALSO PROVED. TH E CAPACITY OF THE DONOR IS ALSO PROVED BY PRODUCING SUFFICIENT MATERIAL. THE LD.RE PRESENTATIVE SUBMITTED THAT SINCE THE TAXPAYER HAS DISCHARGED ITS BURDEN, THERE CANNOT BE ANY DISALLOWANCE. 12 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 10. ON THE CONTRARY, MS. A.S. BINDU, THE LD.DR SUBM ITTED THAT THE TAXPAYER CLAIMS THAT THE AMOUNT WAS RECEIVED THROUGH FOREIGN REMITTANCE. THE CAPACITY OF THE DONOR, SHRI GEORGE JOSEPH TO GIVE THE SO-CALLED G IFT WAS NOT ESTABLISHED. ACCORDING TO THE LD.REPRESENTATIVE, IT IS THE RESPO NSIBILITY OF THE TAXPAYER TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF T HE GIFT. THE TAXPAYER HAS NOT ESTABLISHED ANY OF THE THREE ESSENTIAL INGREDIENTS, WHICH ARE ESSENTIAL FOR PROVING THE CREDIT. THE LD.REPRESENTATIVE PLACED HIS RELIA NCE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS P MOHANAKALA 291 ITR 278 (SC). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THERE WAS A CREDIT IN THE CAPITA L ACCOUNT. WHEN THE ASSESSING OFFICER ASKED THE TAXPAYER TO EXPLAIN THE SOURCE OF INVESTMENT IN THE CAPITAL ACCOUNT IT WAS CLAIMED THAT AN AMOUNT OF RS.3,47,58 0 WAS SAID TO BE RECEIVED FROM SHRI GEORGE JOSEPH. THE TAXPAYER HAS NOT PRODU CED ANY CONFIRMATION LETTER. HE PRODUCED ONLY AN ENTRY FROM THE BANK ACCOUNT. NO OTHER MATERIAL WAS PRODUCED BEFORE THE LOWER AUTHORITY. IN VIEW OF TH E JUDGMENT OF THE APEX COURT IN THE CASE OF P MOHANAKALA (SUPRA) MERELY BECAUSE T HE MONEY WAS TRANSFERRED THROUGH BANKING CHANNEL IT WILL NOT PROVE THE GENUIN ENESS OF THE TRANSACTION. IT IS FOR THE TAXPAYER TO PROVE THE IDENTITY OF THE CREDI TOR, CREDITWORTHINESS OF THE CREDITOR TO GIVE THE GIFT AND THE GENUINENESS. SIN CE NO MATERIAL WAS FILED EXCEPT THE ENTRIES IN THE BANK PASSBOOK THE COMMISSIONER OF INCOME-TAX(A) ALSO CONFIRMED THE ADDITION. THIS TRIBUNAL FINDS THAT G IVING ONE MORE OPPORTUNITY TO THE TAXPAYER TO PROVE THE IDENTITY OF THE CREDITOR, GENUINENESS OF THE CREDIT AND CAPACITY OF THE CREDITOR MAY NOT PREJUDICE THE INTE REST OF THE REVENUE. IN RESPECT 13 ITA NO.690 TO 696/2010 ITA NO.23 TO 43/COCH/2011 OF SUPPRESSION OF SALES FOR ALL THE ASSESSMENT YEAR S THE MATTER WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THEREFORE, F OR THE SAKE OF CONSISTENCY, THE ADDITION OF RS.3,47,580 ALSO NEEDS TO BE RECONSIDER ED AFTER GIVING REASONABLE OPPORTUNITY TO THE TAXPAYER. ACCORDINGLY, THE ORDE RS OF LOWER AUTHORITIES ARE SET AIDE AND THE ISSUE OF ADDITION OF RS.3,47,580 IS AL SO REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXAMINE THE ISSUE AFRESH AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE TAXPAYER. 12. IN THE RESULT, ALL THE APPEALS OF THE TAXPAYERS AND THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH NOVEMBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 16 TH NOVEMBER, 2012 PK/- COPY TO: 1. THE APPELLANTS 2. THE RESPONDENTS 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