DCIT, Thrissur V. M.C. Jacob, Thrissur

ITSSA 35/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8151 (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
• Keywords: Source of fund

Judgement Text

1 IT(SS)A NO.35/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.35/COCH/2005 (BLOCK PERIOD 01-04-1995 TO 20-11-2001) DY.CIT, CENT.CIR VS M.C. JACOB THRISSUR MECHERY HOUSE, OLLUR THRISSUR PAN : ABNPJ3027C (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. S VIJAYAPRABHA, THE LD.DR SUBMITTED THAT TH ERE WAS A SEARCH IN THE BUSINESS PREMISES OF THE FIRMS IN WHICH THE ASSESSEE WAS A P ARTNER AND THE RESIDENCE OF THE ASSESSEE. ACCORDING TO THE LD.DR, THE ASSESSING OF FICER MADE ADDITION OF RS.1,44,63,000 AS UNDISCLOSED INCOME. ACCORDING TO THE LD.DR, THE ASSESSEE CLAIMED TO HAVE SOLD 4400 GMS OF GOLD TO M/S CHINNANSONS JEWELLERS, PERINTHAL MANNA AND 13,400 GMS OF GOLD TO M/S CHINNANSONS JEWELLERS. ON THE BASIS OF THE CAS H FLOW STATEMENT FILED BY THE ASSESSEE, ACCORDING TO THE LD.DR, THE ASSESSING OFF ICER MADE ADDITION OF RS.1,44,63,000 2 IT(SS)A NO.35/COCH/2005 SINCE THE ASSESSEE COULD NOT PRODUCE ANY MATERIAL T O SUBSTANTIATE THE PURCHASE OF GOLD WHICH WAS SAID TO BE SOLD TO THE PARTNERSHIP FIRMS. HOWEVER, THE COMMISSIONER OF INCOME-TAX(A) DELETED THE ADDITION ON THE GROUND TH AT THE ASSESSEE HAS FILED THE RETURNS OF INCOME BEFORE THE DATE OF SEARCH DISCLOSING THE INCOME. ACCORDING TO THE LD.DR, MERE FILING OF RETURNS DISCLOSING INCOME DOES NOT A MOUNT TO PROOF OF EARNING OF THAT INCOME. THEREFORE, THE ASSESSING OFFICER HAS RIGHT LY MADE THE ADDITION. 3. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE SUBMITTED THAT WHEN THE DEPARTMENT HAS ACCEPTED THE RETURNS FILED BY THE ASSESSEE IN THE REGULAR COURSE BEFORE THE DATE OF SEARCH, THE INCOME SO DEC LARED IN THE RETURNS HAS TO BE TREATED AS INCOME DISCLOSED TO THE DEPARTMENT. THE DEPARTMENT ONCE ACCEPTED THE TAX PAID BY THE ASSESSEE ON THE BASIS OF THE RETURNS CA NNOT NOW CONTEND THAT THERE WAS NO SOURCE FOR EARNING OF SUCH INCOME. IF THE DEPARTME NT CLAIMS THAT THERE WAS NO SUCH SOURCE FOR EARNING OF INCOME, THE TAX PAID BY THE A SSESSEE IN THE REGULAR COURSE BY FILING THE RETURNS HAS TO BE REFUNDED. THE VERY FACT THAT SUCH A REFUND WAS NOT MADE AND THE DEPARTMENT ACCEPTED THE RETURNS FILED BY THE ASSESS EE CLEARLY SHOWS THAT THE ASSESSEE HAD ENOUGH MONEY FOR PURCHASE OF JEWELLERY WHICH WA S SUBSEQUENTLY SOLD TO THE PARTNERSHIP FIRM. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CLAIM OF THE ASS ESSEE THAT THE JEWELLERY WAS SOLD TO THE PARTNERSHIP FIRMS WAS DOUBTED BY THE DEPARTMENT ON THE GROUND THAT THE PARTNER HAD NO SUFFICIENT SOURCE OF FUNDS FOR PURCHASE OF S UCH LARGE VOLUME OF JEWELLERY. THE FACT REMAINS IS THAT THE PARTNERS HAVE FILED THEIR RETURNS OF INCOME REGULARLY BEFORE THE DATE OF SEARCH DISCLOSING SUFFICIENT INCOME FOR PUR CHASE OF JEWELLERY. FUNDS AS DISCLOSED IN THE RETURNS OF INCOME WERE AVAILABLE FOR PURCHAS E OF JEWELLERY; THEREFORE, THE DEPARTMENT NOW CANNOT SAY THAT THE PARTNER HAD NO S UCH SOURCE OF INCOME. THE TRIBUNAL, IN THE CASE OF DY.CIT VS CHINNANSONS JEWL LERS IN ITA NO.396/COCH/2006 DATED 16-01-2008 EXAMINED THIS ISSUE ELABORATELY AND FOUN D THAT WHEN THERE WAS A SPEAKING 3 IT(SS)A NO.35/COCH/2005 NEXUS AVAILABLE IN RESPECT OF SOURCE OF APPLICATION OF MONEY, THERE CANNOT BE ANY ADDITION AS UNDISCLOSED INCOME. BY FOLLOWING THE O RDER OF THIS TRIBUNAL IN THE CASE OF DY.CIT VS CHINANSONS JEWELLERS IN ITA NO.396/COCH/2 006 DATED 16-01-2008 AND FOR THE REASONS STATED THEREIN WE UPHOLD THE ORDER OF COMMI SSIONER OF INCOME-TAX(A). 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