DCIt, Trichur V. Chinnansons Jewellery, Vadakancherry

ITSSA 18/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8135 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2012
• Assessment Year: misc
• Appeal Filed On: 31-01-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: JOSE POTTOKKARAN
• Keywords: Sale consideration of property below Jantri Value; Block assessment

Judgement Text

1 IT(SS)A NO. 18/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(SS)A NO. 18/COCH/2005 (BLOCK PERIOD 01-04-1995 TO 20-11-2001) DY.CIT, CENT.CIR. VS M/S CHINNANSONS JEWELLERS THRISSUR T.B. ROAD, VADAKKANCHERY PAN : AABFC4950C (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI JOSE POTTOKKARAN DATE OF HEARING : 18-04-2012 DATE OF PRONOUNCEMENT : 22-06-2012 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 DATED 26-10-2004 AND P ERTAINS TO BLOCK PERIOD 01-04-1995 TO 20-11-2001. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF RS. 7,42,860 BEING THE PURCHASE OF GOLD FROM SHRI M.C. JOSE AND UNEXPLAINE D CREDIT IN THE NAME OF SMT. SAILU JACOB AND SMT. DALLY MARTIN TO THE EXTENT OF RS.1,7 0,000. 3. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THER E WAS SEARCH IN THE PREMISES OF THE ASSESSEE AND THE RESIDENCE OF THE PARTNERS ON 2 0-11-2001. IN THE BLOCK ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE ADDITION OF RS.7,42,860 BEING THE CREDIT ENTERED IN THE NAME OF SHRI M.C. JOSE. HOWEVER, THE COMMIS SIONER OF INCOME-TAX(A) DELETED THE 2 IT(SS)A NO. 18/COCH/2005 ADDITION ON THE GROUND THAT THE ASSESSING OFFICER H AS NOT ESTABLISHED THAT THE ADDITION MADE IS THE INCOME OF THE FIRM FROM THE BUSINESS. ACCORDING TO THE LD.REPRESENTATIVE, WHEN THE CREDIT ENTRIES WERE FOUND IT IS FOR THE AS SESSEE TO EXPLAIN THE SOURCE OF SUCH CREDIT AND NOT FOR THE REVENUE. MERE BOOK ENTRY FO UND DURING THE COURSE OF SEARCH OPERATION WILL NOT SUBSTANTIATE THE CREDITWORTHINES S OF THE CREDITOR. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) IS NOT JUSTIFIED IN D ELETING THE ADDITION. 4. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE FILED THE RETURN OF INC OME DISCLOSING ALL THE PURCHASE CREDITS BEFORE THE DATE OF SEARCH. THEREFORE, THE DEPARTME NT KNOWS ABOUT THE CREDIT AND PURCHASES MADE FROM THE PARTNERS AND THEIR FAMILY M EMBERS. IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N THAT THE ASSESSEES MONEY WAS ROUTED THROUGH THE PARTNERS, ACCORDING TO THE LD.RE PRESENTATIVE, THERE CANNOT BE ANY ADDITION IN THE HANDS OF THE PRESENT ASSESSEE. ACC ORDING TO THE LD.REPRESENTATIVE, THE PARTNERS HAVE PAID THE TAXES AND THE SAME WAS ACCEP TED BY THE REVENUE. ALL THE TRANSACTIONS WERE ENTERED IN THE BOOKS OF ACCOUNT. THEREFORE, THE ADDITION MADE BY THE ASSESSEE IS NOT JUSTIFIED. THEREFORE, THE COMMISSI ONER 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 ONLY ADDITION IS WITH REGARD TO CREDITS FOUND IN THE NAME OF SHRI M.C. JOSE TO THE EXTENT OF RS. 7,42,86 0 AND IN THE NAMES OF SMT. SAILU JACOB AND SMT. DALLY MARTIN TO THE EXTENT OF RS.1,7 0,000. THE PARTNERS OF THE FIRM AND THEIR FAMILY MEMBERS HAVE FILED THEIR REGULAR RETUR NS OF INCOME BEFORE THE DATE OF SEARCH AND PAID TAXES. THEREFORE, SHRI M.C. JOSE, ONE OF THE PARTNERS OF THE FIRM INVESTED ABOUT RS.7.43 LAKHS. THE INCOME-TAX RETUR NS FILED BY SHRI M.C. JOSE CLEARLY SHOW THE AVAILABILITY OF FUNDS FOR MAKING THE INVES TMENT. SIMILARLY SMT. DALLY MARTIN HAS ALSO FILED HER RETURN OF INCOME. WHEN THE SOURCE O F FUNDS ARE AVAILABLE WITH THE PARTNER AND THE FAMILY MEMBERS OF THE PARTNER IN THE ABSENC E OF ANY MATERIAL TO SUGGEST THAT 3 IT(SS)A NO. 18/COCH/2005 THE FIRMS MONEY WAS ROUTED IN THE NAME OF THE PART NER AND HIS FAMILY MEMBERS THERE CANNOT BE ANY ADDITION AS UNDISCLOSED INCOME FOR TH E BLOCK PERIOD. UNDISCLOSED INCOME FOR THE BLOCK PERIOD HAS TO BE COMPUTED ON THE BASI S OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION OR ANY INFORMATION AVAIL ABLE AND RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. IN TH E ABSENCE OF ANY MATERIAL, THIS TRIBUNAL FIND THAT THE COMMISSIONER OF INCOME-TAX(A ) HAS RIGHTLY DELETED THE ADDITION. THEREFORE, THE ORDER OF THE COMMISSIONER OF INCOME- TAX(A) IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND JUNE, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 22 ND 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