DCIT, Thrissur V. M.C. Roy, Thrissur

ITSSA 36/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8150 (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.36/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.36/COCH/2005 (BLOCK PERIOD 01-04-1995 TO 20-11-2001) DY.CIT, CENT.CIR VS M.C. ROY 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 E ASSESSING OFFICER HAS MADE ADDITION OF RS. 56,08,570 AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE LD.DR SUBMITTED THAT THE ASSESSEE CLAIMED IN THE RETURN F ILED AFTER THE SEARCH THAT THE GOLD JEWELLERY WERE SOLD TO CHINNANSONS JEWELLERS. HOWE VER, THE ASSESSEE HAD NO MATERIAL TO SUBSTANTIATE THE PURCHASE OF JEWELLERY OR ANY SO URCE OF INCOME. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD.REPRESENTATIVE, T HE CLAIM OF THE ASSESSEE THAT THE GOLD JEWELLERY WAS GIVEN TO PARTNERSHIP FIRM WAS FOUND T O BE FROM UNDISCLOSED SOURCE OF 2 IT(SS)A NO.36/COCH/2005 INCOME, THEREFORE, THE VALUE OF THE GOLD JEWELLERY HAS BEEN REATED AS UNDISCLOSED INCOME. THE COMMISSIONER OF INCOME-TAX(A), HOWEVER , MADE ADDITION ON THE GROUND THAT THE GOLD SOLD TO THE FIRM WAS RECORDED IN THE PRIMARY BOOKS OF ACCOUNT AND THE ASSESSEE HAS ALSO PAID ADVANCE-TAX OF RS.5 LAKHS ON 15-09-2001. ACCORDING TO THE LD.DR, MERELY BECAUSE OF THE SALE ENTRY IN THE PRIMARY BOO KS OF MAINTAINED BY THE FIRM AND THE ADVANCE-TAX PAID BY THE ASSESSEE CANNOT BE A REASON FOR THE DELETION OF THE ADDITION MADE BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTTIVE FOR THE ASSESSEE SUBMITTED THAT THE VALUE OF THE GOLD SOLD BY THE AS SESSEE WAS RECORDED IN THE PRIMARY BOOKS OF MAINTAINED BY THE FIRM WHICH WAS SEIZED BY THE REVENUE. THEREFORE, THE SEIZED MATERIAL CLEARLY SHOWS THAT THE GOLD JEWELLERY WAS SOLD BY THE ASSESSEE TO THE FIRM. THE ASSESSEE FILED REGULAR RETURNS DISCLOSING SUFFICIEN T INCOME IN THE REGULAR COURSE. SIMILARLY THE JEWELLERY SOLD TO OTHER FIRMS WAS AL SO RECORDED IN THE PRIMARY BOOKS. THE ASSESSEE HAD ESTIMATED THE TOTAL INCOME OF THE YEAR AND PAID ADVANCE TAX BEFORE THE DATE OF SEARCH TO THE EXTENT OF RS.5 LAKHS. WHEN T HE ASSESSEE ESTIMATED THE TOTAL INCOME OF THE YEAR AND PAID THE ADVANCE-TAX, ACCORD ING TO THE LD.REPRESENTATIVE, THIS ESTIMATION OF TOTAL INCOME AND PAYMENT OF ADVANCE-T AX WOULD AMOUNT TO DISCLOSURE OF INCOME TO THE REVENUE; THEREFORE, THERE CANNOT BE A NY ADDITION AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE FILED R EGULAR RETURN OF INCOME AFTER THE SEARCH DISCLOSING THE VALUE OF THE JEWELLERY SOLD T O CHINANSONS JEWELLERS. THE ASSESSING OFFICER FOUND THAT THE RETURNS FILED SUBSEQUENT TO THE SEARCH CANNOT BE TREATED AS DISCLOSURE. THE FACT REMAINS IS THAT THE SEARCH WA S ON 20-11-2001 AND THE DUE DATE FOR FILING OF THE RETURN WAS NOT OVER. EVEN THE FINANC IAL YEAR WAS NOT ENDED. THE CLAIM OF THE ASSESSEE THAT THE SALE OF JEWELLERY WAS RECORDE D IN THE PRIMARY BOOKS MAINTAINED BY THE FIRM IS NOT IN DISPUTE. IT IS ALSO NOT IN DISP UTE THAT THE ASSESSEE HAS FILED REGULAR 3 IT(SS)A NO.36/COCH/2005 RETURNS OF INCOME DISCLOSING INCOME TO THE DEPARTME NT. THE ASSESSEE HAS ALSO ESTIMATED THE TOTAL INCOME AND PAID ADVANCE-TAX OF RS.5 LAKHS ON 15-09-2001. IN VIEW OF THE ABOVE FACTUAL CIRCUMSTANCES, IT CANNOT BE SA ID THAT THERE CANNOT BE ANY UNDISCLOSED INCOME FOR THE BLOCK PERIOD. UNDISCLOS ED INCOME HAS TO BE COMPUTED ONLY ON THE BASIS OF THE MATERIAL FOUND DURING THE COURS E OF SEARCH OPERATION, IN VIEW OF THE LANGUAGE EMPLOYED IN SECTION 158BB(1) OF THE ACT. IN THIS CASE, NO SEARCH MATERIAL WAS AVAILABLE TO SUPPORT THE ADDITION MADE BY THE ASSES SING OFFICER. IN FACT, THE SEARCH MATERIAL SUPPORTS THE CASE OF THE ASSESSEE THAT THE JEWELLERY WAS SOLD BY THE ASSESSEE TO THE FIRM. IN VIEW OF THESE FACTUAL CIRCUMSTANCES, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 5. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. 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