DCIT, Thrissur V. M.C. Chinnan, Thrissur

ITSSA 34/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8141 (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.34/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.34/COCH/2005 (BLOCK PERIOD 01-04-1995 TO 20-11-2001) DY.CIT, CENT.CIR VS M.C. CHINNAN THRISSUR MECHERY HOUSE, OLLUR THRISSUR PAN : ABBPC2306F (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 THE ASSESSEE INVESTED A SUM OF RS.8,32,600 IN THE ASSESSMENT YEAR 2000-01 AND RS.2 7,54,080 IN THE ASSESSMENT YEAR 2001-02. ACCORDING TO THE LD.REPRESENTATIVE, SUBST ANTIVE ADDITION WAS MADE IN THE HANDS OF THE FIRM IN WHICH THE INVESTMENT WAS MADE. HOWEVER, PROTECTIVE ASSESSMENT WAS MADE IN THE HANDS OF THE PRESENT ASSESSEE. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT FOR THE ASSESSMENT YEAR 2002-03 THE ASSESSEE HAS DISCLOSED AN INCOME OF RS.12,50,000 IN THE RETURNS FILED SUBSEQUENT TO THE SEARCH. HOWEVER, THE ASSESSING 2 IT(SS)A NO.34/COCH/2005 OFFICER MADE ADDITION OF RS.8,87,500 BEING THE PROP ORTIONATE INCOME UPTO 20-11-2001 AS UNDISCLOSED INCOME. THE COMMISSIONER OF INCOME- TAX(A) BY TAKING INTO CONSIDERATION THE ADVANCE-TAX PAID BY THE ASSESSEE ON 15-09-2001 DELETED THE ADDITION. ACCORDING TO THE LD.DR, MERE PAYMENT OF ADVANCE-TAX CANNOT BE CO NSIDERED TO BE A DISCLOSURE OF INCOME TO THE DEPARTMENT. 3. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS DECLARED INCOME REG ULARLY IN THE REGULAR RETURNS FOR THE ASSESSMENT YEARS WHICH FELL IN THE BLOCK PERIOD. F ROM AND OUT OF THE INCOME DECLARED TO THE DEPARTMENT IN THE REGULAR COURSE, THE ASSESSEE INVESTED IN THE FIRM BY WAY OF GOLD JEWELLERY AND CASH CREDIT. FOR THE ASSESSMENT YEAR 2000-01 THE INVESTMENT WAS RS.8,32,600 AND FOR THE ASSESSMENT YEAR 2000-01 THE INVESTMENT WAS RS.27,54,080. ACCORDING TO THE LD.REPRESENTATIVE, WHEN THE ASSESS EE HAS DISCLOSED SUFFICIENT INCOME TO THE DEPARTMENT BY WAY OF REGULAR RETURNS BEFORE THE DATE OF SEARCH AND THE SAME WAS ACCEPTED, THERE CANNOT BE ANY UNDISCLOSED INCOME FO R THE BLOCK PERIOD. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED T HE ADDITION. REFERRING TO THE ADVANCE-TAX PAID, THE LD.REPRESENTATIVE SUBMITTED T HAT THE ASSESSEE HAS PAID ADVANCE- TAX OF RS.1 LAKH AFTER ESTIMATING THE TOTAL INCOME ON 15-09-2001. ONCE THE ADVANCE-TAX WAS PAID AFTER ESTIMATING THE TOTAL INCOME, THE INC OME SO ESTIMATED CANNOT BE CONSIDERED TO BE UNDISCLOSED INCOME SINCE THE FACT WAS WITHIN THE KNOWLEDGE OF THE DEPARTMENT ABOUT THE INCOME. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT ALL THESE ADDITIONS WERE MADE ON THE BASIS OF THE CASH FLOW S TATEMENT FILED BY THE ASSESSEE IN THE COURSE OF REGULAR ASSESSMENT. THE ASSESSING OFFICE R HAS NOT BROUGHT ON RECORD ANY SEIZED MATERIAL FOR THE PURPOSE OF MAKING ADDITION. IN FACT, ACCORDING TO THE LD.REPRESENTATIVE FOR THE ASSESSEE, THERE IS NO SEI ZED MATERIAL AVAILABLE ON RECORD TO SUPPORT THE ADDITION MADE BY THE ASSESSING OFFICER. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED THE ADDITION. 3 IT(SS)A NO.34/COCH/2005 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ADDITION WAS MAD E IN RESPECT OF THE CREDIT FOUND IN THE FIRM, M/S JANATHA JEWELLERY. THE ASSESSEE HAS FILED THE COPIES OF THE RETURNS FILED IN THE REGULAR COURSE TO SHOW THAT SUFFICIENT INCOME W AS DISCLOSED TO THE DEPARTMENT. FROM AND OUT OF THE INCOME DISCLOSED TO THE DEPARTM ENT THE ADVANCE WAS MADE IN THE FORM OF GOLD JEWELLERY AND CASH CREDIT TO THE FIRM. WHEN THE ASSESSEE HAS SHOWN THAT THE INCOME WAS GIVEN FROM THE INCOME RETURNED IN TH E REGULAR COURSE, THIS TRIBUNAL IS OF THE OPINION THAT THERE CANNOT BE ANY ADDITION. MOR EOVER, WHEN THE ASSESSEE ESTIMATED THE TOTAL INCOME AS PER THE SCHEME OF THE INCOME-TA X ACT AND PAID THE ADVANCE-TAX, THE INCOME SO ESTIMATED AND DECLARED TO THE DEPARTMENT CANNOT BE CONSTRUED TO BE UNDISCLOSED INCOME. MOREOVER, IT IS WELL SETTLED P RINCIPLES OF LAW THAT THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD HAS TO BE COMPUTED ON T HE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION IN VIEW OF THE LANGU AGE EMPLOYED BY THE LEGISLATURE IN SECTION 158BB(1) OF THE ACT. IN THIS CASE, AS RIGH TLY SUBMITTED BY THE LD.REPRESENTATIVE FOR THE ASSESSEE, THE ADDITION WAS MADE ON THE BASI S OF THE CASH FLOW STATEMENT FILED BY THE ASSESSEE SUBSEQUENT TO THE SEARCH. IN THE ABSE NCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, THIS TRIBUNAL IS OF THE OPINION THAT THERE CANNOT BE ANY ADDITION AS UNDISCLOSED FOR THE BLOCK PERIOD. 5. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRME D. 6. 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/- 4 IT(SS)A NO.34/COCH/2005 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