DCIT, Thrissur V. M.C. Vinod, Thrissur

ITSSA 31/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8147 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2012
• Assessment Year: misc
• Appeal Filed On: 10-02-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: JOSE POTTOKKARAN

Judgement Text

1 IT(SS)A NO. 31/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.31/COCH/2005 (BLOCK PERIOD 01-04-1995 TO 20-11-2001) THE DY.CIT, CENT.CIR VS SHRI M.C. VINOD THRISSUR MECHERY HOUSE, OLLUR THRISSUR PAN : AAWPV7339P (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. S 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)-I, KOCHI DATED 05-11-2004 AND PERTAIN S TO BLOCK PERIOD 01-04-1995 TO 20- 11-2001. 2. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT DURI NG THE COURSE OF SEARCH OPERATION ON 20-11-2001, THE REVENUE AUTHORITIES FO UND INVESTMENT OF RS.54,01,285 BY THE ASSESSEE IN THE FIRM, M/S CHINANSONS JEWELLERY. IN THE ABSENCE OF ANY MATERIAL TO SUBSTANTIATE THE INVESTMENT, ACCORDING TO THE LD.RE PRESENTATIVE, THE ASSESSING OFFICER MADE THE ADDITION. THE LD.REPRESENTATIVE FURTHER S UBMITTED THAT WHEN THE CREDIT WAS FOUND IT IS FOR THE ASSESSEE TO PROVE THE SOURCE OF THE CREDIT, GENUINENESS OF THE TRANSACTION AND THE IDENTITY OF THE PARTIES. IN TH IS CASE, ACCORDING TO THE 2 IT(SS)A NO. 31/COCH/2005 LD.REPRESENTATIVE, THE ASSESSEE HAS FAILED TO PROVE THE SOURCE OF THE INVESTMENT MADE IN THE FIRM. THEREFORE, THE ASSESSING OFFICER HAS RIG HTLY MADE THE ADDITION. 3. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT NO MATERIAL WAS FOUND DURING THE COU RSE OF SEARCH OPERATION. ACCORDING TO THE LD.REPRESENTATIVE, THE ENTIRE ADDITION WAS M ADE ON THE BASIS OF THE CASH FLOW STATEMENT FILED BY THE ASSESSEE SUBSEQUENT TO THE S EARCH. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESEE HAS PAID THE ADVANCE-TAX OF RS.5 LAKHS ON 15-09-2001. THEREFORE, TO THE EXTENT OF PAYMENT OF ADVANCE-TAX, THE ESTIMATED INCOME CANNOT BE TREATED AS UNDISCLOSED INCOME. THE LD.REPRESENTATI VE FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED REGULAR RETURNS DISCLOSING SUFFI CIENT INCOME FOR PURCHASE OF GOLD JEWELLERY. THE JEWELLERY PURCHASED BY UTILISING IN COME DISCLOSED TO THE DEPARTMENT WAS GIVEN TO THE ASSESSEE FIRM. THEREFORE, WHEN THERE WAS A SPEAKING NEXUS BETWEEN THE INCOME AND THE INVESTMENT, ACCORDING TO THE LD.REPR ESENTATIVE, THERE CANNOT BE ANY ADDITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICE R MADE ADDITION OF RS.54,01,285 ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE ANY MATE RIAL TO SUBSTANTIATE THE INVESTMENT MADE IN THE FIRM, M/S CHINNANSONS JEWELLERY. HOWEV ER, THE COMMISSIONER OF INCOME- TAX(A) FOUND THAT THE JEWELLERY SOLD BY THE ASSESSE E TO M/S CHINNANSONS JEWELLERY WAS RECORDED IN THE BOOKS MAINTAINED BY THE FIRM AND TH IS WAS NOT CONSIDERED BY THE ASSESSING OFFICER WHILE CONSIDERING THE EXCESS STOC K. SIMILARLY THE JEWELLERY SOLD TO THE OTHER FIRM WAS ALSO RECORDED IN THE BOOKS OF ACCOUN T. THE ADVANCE-TAX TO THE EXTENT OF RS.5 LAKHS PAID BY THE ASSESSEE WAS NOT TAKEN INTO CONSIDERATION WHILE COMPUTING THE UNDISCLOSED INCOME. THE FACT REMAINS IS THAT THE A SSESSEE HAS ALSO FILED THE RETURN OF INCOME IN THE REGULAR COURSE DISCLOSING SUFFICIENT INCOME FOR PURCHASING THE GOLD JEWELLERY WHICH WAS SUBSEQUENTLY CLAIMED TO HAVE BE EN SOLD TO THE FIRM. THE ESTIMATED INCOME FOR THE PAYMENT OF ADVANCE-TAX CANNOT BE TRE ATED AS UNDISCLOSED INCOME SINCE 3 IT(SS)A NO. 31/COCH/2005 ONCE THE ADVANCE-TAX WAS PAID, THE ESTIMATED INCOME FOR THE PURPOSE WAS WITHIN THE KNOWLEDGE OF THE DEPARTMENT BEFORE THE DATE OF SEAR CH. IT IS ALSO NOT IN DISPUTE THAT THE GOLD JEWELLERY TO THE EXTENT OF RS. 10,000 GMS SOLD TO M/S CHINNANSONS JEWELLERY ON 02-10-2001 WAS RECORDED IN THE PRIMARY BOOKS OF ACC OUNT. IN VIEW OF THE ABOVE UNDISPUTED FACT, THIS TRIBUNAL IS OF THE OPINION TH AT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED THE ADDITION. WE DO NOT FIND A NY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08 TH JUNE, 2012. SD/- SD/- (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