DCIt, Trichur V. Chinnansons Jewellery, Palakkad

ITSSA 19/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8138 (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: Competent authority

Judgement Text

1 IT(SS)A NO. 19/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. 19/COCH/2005 (BLOCK PERIOD 01-04-1995 TO 20-11-2001) DY.CIT, CENT.CIR. VS M/S CHINNANSONS JEWELLERS THRISSUR G.B. ROAD, PALAKKAD PAN : AABFC7593F (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 25-10-2004 AND PERTAIN S TO BLOCK PERIOD 01-04-1995 TO 20- 11-2001. 2. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE GOLD JEWELLERY PURCHASED FROM THE PARTNERS AND SMT. MARY CHINNAN WAS ADDED AS UNE XPLAINED PURCHASES. ACCORDING TO THE LD.DR, THE PARTNERS OF THE FIRM DECLARED INCOME AND FILED RETURNS BEFORE THE DATE OF SEARCH. THEREFORE, THE ASSESSEE CLAIMED THAT THE INCOME DECLARED BY THE PARTNERS IN THEIR RESPECTIVE RETURNS CANNOT BE ADDED AS UNDISCL OSED INCOME OF THE ASSESSEE FIRM. ACCORDING TO THE LD.REPRESENTATIVE, THE RESPECTIVE PARTNERS HAVE NOT GIVEN ANY DETAILS OF SOURCE OF THEIR INCOME. IN THE ABSENCE OF ANY EVID ENCE TO SHOW THE EARNING OF THE INCOME BY THE RESPECTIVE PARTNERS, ACCORDING TO THE LD.DR, MERE FILING OF RETURNS OF 2 IT(SS)A NO. 19/COCH/2005 INCOME DOES NOT PROVE THAT IT IS NOT THE INCOME OF THE FIRM. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD.DR, THE ASSESSING OFF ICER HAS RIGHTLY MADE THE ADDITION. 3. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE RETURNS FILED BY THE PARTNERS DI SCLOSING THE INCOME WERE ACCEPTED BY THE REVENUE. THE RESPECTIVE PARTNERS HAVE ALSO PAI D TAXES. ONCE THE RETURNS FILED BY THE PARTNERS ARE ACCEPTED, ACCORDING TO THE LD.REPR ESENTATIVE, THE INCOME DISCLOSED THEREIN BECOMES THE INCOME OF THE RESPECTIVE PARTNE RS. IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT THE FIRMS INCOME WAS DIVERTED TO THE PARTNERS, ACCORDING TO THE LD.REPRESENTATIVE, THERE CANNOT BE ANY ADDITION AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. REFERRING TO THE PROVISIONS OF SECTION 158 BB(1), THE LD.REPRESENTATIVE SUBMITTED THAT IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT TH E FIRM HAS EARNED THE INCOME, THERE CANNOT BE ANY ADDITION MERELY BECAUSE THE GOLD JEWE LLERY WAS PURCHASED FROM THE PARTNERS. REFERRING TO THE ORDER OF COMMISSIONER O F INCOME-TAX(A), THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT T HE COMMISSIONER OF INCOME-TAX(A) AFTER CONSIDERING THE ENTRIES FOUND IN THE BOOKS OF ACCOUNT AND THE INCOME RETURNED BY THE RESPECTIVE PARTNERS HELD THAT THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE SOURCE OF PURCHASES. THEREFORE, ACCORDING TO THE LD.REPRESEN TATIVE, THE ADDITION MADE BY THE ASSESSING OFFICER IS RIGHTLY DELETED BY THE COMMISS IONER OF INCOME-TAX(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE RESPECTIVE PARTNERS HAVE FILED THEIR RETURNS OF INCOME DISCLOSING THEIR INCOME AND PAID TAXES. FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A), IT APPEARS THAT SMT. MARY CHINNAN FILED DECLARATION UNDER VDIS, 1997 AND THE COMPETENT AUTHORITY HAS IS SUED THE CERTIFICATE. ONCE THE PARTNERS DECLARED SUFFICIENT INCOME FOR PURCHASE OF JEWELLERY AND THE SAID JEWELLERY WAS SUBSEQUENTLY SOLD TO THE FIRM, THE DEPARTMENT NOW C ANNOT SAY THAT THE PARTNERS HAVE NO SOURCE OF INCOME FOR PURCHASE OF THE GOLD JEWELL ERY. THE VERY FACT THAT THE RETURNS FILED BY THE RESPECTIVE PARTNERS WERE ACCEPTED SHOW S THAT THEY HAVE SUFFICIENT SOURCE OF 3 IT(SS)A NO. 19/COCH/2005 INCOME. IF AT ALL THEY HAVE NO SOURCE, IT IS FOR T HE REVENUE TO ENQUIRE INTO THE RETURNS FILED BY THE PARTNERS AND RECORD A FINDING THERETO AND REFUND THE TAXES PAID BY THE PARTNERS. UNFORTUNATELY THAT WAS NOT DONE IN THIS CASE. THEREFORE, THIS TRIBUNAL FINDS THAT THE COMMISSIONER OF INCOME-TAX(A), AFTER EXAMI NING THE FACTS OF THE CASE HAS RIGHTLY FOUND THAT THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE SOURCE OF INCOME. 5. NOW COMING TO THE ADDITION MADE TOWARDS PURCHASE S MADE FROM SMT. MARY CHINNAN, IT IS NOT IN DISPUTE THAT SMT. MARY CHINNA N HAD DECLARED INCOME AND JEWELLERY UNDER THE VDIS, 1997. THE SAID JEWELLERY WAS SOLD TO THE ASSESSEE FIRM. ONCE THE COMPETENT AUTHORITY ISSUED THE CERTIFICATE ACCEPTIN G THE DECLARATION MADE UNDER THE VDIS, THE ASSESSING OFFICER CANNOT GO BEYOND THE CE RTIFICATE ISSUED BY THE COMPETENT AUTHORITY. THEREFORE, THIS TRIBUNAL FIND THAT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED THE ADDITION. WE DO NOT FIND ANY I NFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 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