DCIT, Thrissur V. M.C. Martin, Thrissur

ITSSA 33/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8152 (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. 33/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.33/COCH/2005 (BLOCK PERIOD 01-04-1995 TO 20-11-2001) THE DY.CIT, CENT.CIR VS SHRI M.C. MARTIN THRISSUR MECHERY HOUSE, OLLUR THRISSUR PAN : ACHPM4073E (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 THER E WAS A SEARCH IN THE BUSINESS PREMISES OF THE PARTNERSHIP FIRM, M/S CHINNANSONS J EWELLERY AND AT THE RESIDENCE OF THE ASSESSEE ON 20-11-2001. ACCORDING TO THE LD.DR, DUR ING THE COURSE OF SEARCH OPERATION IT WAS FOUND THAT THE ASSESSEE INVESTED RS.54,33,500 I N THE FIRM. ACCORDING TO THE LD.DR, THE ASSESSEE COULD NOT PRODUCE ANY MATERIAL BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE THE INVESTMENT. THEREFORE, THE ASSESSING OFFICER M ADE THE ADDITION. HOWEVER, THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT THE VALUE OF THE GOLD JEWELLERY TO THE EXTENT 2 IT(SS)A NO. 33/COCH/2005 OF RS. 36,50,000 WAS ALREADY RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE FIRM. HOWEVER, THE JEWELLERY TO THE EXTENT OF 10,000 GMS WAS NOT CONSIDERED WHILE COMPUTING THE EXCESS STOCK. ACCORDING TO THE LD.DR, THE JEWELLERY SOLD TO OTHER FIRM TO THE EXTENT OF RS.17,83,500 WERE ALSO RECORDED IN TH E BOOKS OF ACCOUNT. THE ASSESSEE HAS ALSO ESTIMATED THE INCOME FOR THE ASSESSMENT YE AR 2002-03 AND PAID THE ADVANCE- TAX OF RS.5 LAKHS ON 15-09-2001. ACCORDING TO LD.D R MERE PAYMENT OF ADVANCE-TAX CANNOT BE A REASON FOR NOT TREATING THE RELATABLE I NCOME AS UNDISCLOSED INCOME. ACCORDING TO THE LD.DR, IN THE ABSENCE OF ANY MATER IAL TO SUBSTANTIATE THE INVESTMENT IN GOLD JEWELLERY BY THE ASSESSEE, THE ADDITION HAS TO BE MADE AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. 3. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT IT IS NOT IN DISPUTE THAT THE GOLD J EWELLERY OF 10,000 GMS VALUING RS.36,50,000 WAS SOLD TO M/S CHINNANSONS JEWELLERY ON 02-11-2001. THIS WAS RECORDED IN THE PRIMARY BOOKS OF ACCOUNT SEIZED BY THE DEPAR TMENT. EVEN THOUGH THERE WAS MATERIAL TO SHOW THAT THE ASSESSEE SOLD THE JEWELLE RY TO THE EXTENT OF 10,000 GMS THIS WAS NOT TAKEN INTO CONSIDERATION WHILE COMPUTING TH E EXCESS STOCK OF THE FIRM. SIMILARLY, THE GOLD JEWELLERY TO THE EXTENT OF RS.1 7,83,500 WAS SOLD TO OTHER FIRMS AND THIS WAS ALSO RECORDED IN THE PRIMARY BOOKS OF ACCO UNT. THE ASSESSEE AFTER ESTIMATING THE INCOME FOR THE ASSESSMENT YEAR 2002-03 PAID ADV ANCE-TAX OF RS.5 LAKHS ON 15-09- 2001. ONCE THE ASSESSEE PAID ADVANCE-TAX UNDER THE SCHEME OF THE ACT, THE INCOME RELATABLE TO THE ADVANCE-TAX CANNOT BE TREATED AS U NDISCLOSED INCOME. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESS EE HAS FILED THE RETURNS OF INCOME REGULARLY BEFORE THE DATE OF SEARCH AND DISCLOSED S UFFICIENT INCOME FOR PURCHASE OF GOLD JEWELLERY WHICH WAS SUBSEQUENTLY SOLD TO THE FIRM. THE INCOME DISCLOSED IN THE RETURN OF INCOME REGULARLY FILED BEFORE THE DEPARTMENT WAS UTILIZED FOR PURCHASE OF JEWELLERY. THEREFORE, THERE WAS NEXUS BETWEEN THE INCOME DISCL OSED TO THE DEPARTMENT BY WAY OF REGULAR RETURNS OF INCOME AND THE PURCHASES MADE BY THE ASSESSEE. THEREFORE, SUCH JEWELLERY SHOWN TO THE DEPARTMENT CANNOT BE TREATED AS UNDISCLOSED INCOME. 3 IT(SS)A NO. 33/COCH/2005 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND ALSO PE RUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS PAID RS.5 LAKHS ON 15-09-2001 TOWARDS ADVANCE-TAX AFTER ESTIMATING THE INCOME FOR THE YEA R UNDER CONSIDERATION. THEREFORE, THE ESTIMATED INCOME FOR PAYMENT OF ADVANCE-TAX CAN NOT BE CONSIDERED TO BE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE ASSES SEE HAS FILED THE COPIES OF THE RETURNS OF INCOME FILED IN THE REGULAR COURSE. FOR THE ASSESSMENT YEAR 1997-98 THE ASSESSEE HAD DISCLOSED RS.10,00,256; FOR THE ASSESS MENT YEAR 2000-01 THE ASSESSEE HAS DISCLOSED RS.14,53,990. SIMILARLY FOR OTHER YEARS ALSO THE ASSESSEE HAS FILED RETURNS OF INCOME. ONCE THE ASSESSEE HAS FILED THE RETURNS OF INCOME IN THE REGULAR COURSE AND UTILIZED THE MONEY FOR PURCHASE OF GOLD JEWELLERY, IT CANNOT BE SAID THAT THE INCOME WAS NOT DISCLOSED TO THE DEPARTMENT. THE ASSESSEE UTIL IZED THE INCOME DISCLOSED TO THE DEPARTMENT FOR PURCHASE OF JEWELLERY WHICH WAS SOLD TO THE FIRM ON 02-11-2001. 5. IN VIEW OF THE ABOVE FACTUAL SITUATION THIS TRIB UNAL IS OF THE OPINION THAT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED T HE ADDITION. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACC ORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08 TH MAY, 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