DCIT, Trichur V. Chinnansons Jewellers, Perinthalmanna

ITSSA 46/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8133 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2012
• Assessment Year: misc
• Appeal Filed On: 18-02-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: JOSE POTTOKKARAN
• Keywords: Block assessment

Judgement Text

1 IT(SS)A NO. 46/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. 46/COCH/2005 (BLOCK PERIOD 01-04-1995 TO 20-11-2001) DY.CIT, CENT.CIR. VS M/S CHINNANSONS JEWELLERS THRISSUR CALICUT ROAD, PERINTHALMANNA PAN : AACFC7130R (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI JOSE POTTOKKARAN DATE OF HEARING : 18-04-2012 DATE OF PRONOUNCEMENT : 22-06-2012 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 DATED 05-11-2004 AND P ERTAINS 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 PREMISES OF THE ASSESSEE AND THE RESIDENTIAL PREMISES OF THE PARTNERS ON 20-11-2001. IN THE BLOCK ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE ADDITION OF RS.1,98,74,835 BEING UNEXPLAINED PURCHASE OF GOLD FROM PARTNERS AND LADY MEMBERS OF THE PARTNERS FAMILY. ACCORDING TO THE LD.DR, THE ASSESSEE COULD NOT PROD UCE ANY MATERIAL TO SUBSTANTIATE THE PURCHASE OF GOLD FROM THE PARTNERS AND FAMILY MEMBE RS OF THE PARTNERS. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD.DR, THE ASSESS ING OFFICER MADE THE ADDITION. HOWEVER, ON APPEAL BY THE ASSESSEE, THE COMMISSIONE R OF INCOME-TAX(A) FOUND THAT THE 2 IT(SS)A NO. 46/COCH/2005 CREDIT ENTRIES APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE CONFIRMED BY THE RESPECTIVE PARTNERS AND THEIR FAMILY MEMBERS AND TH E IDENTITY IS NOT IN DOUBT, THE CREDITWORTHINESS WAS ALSO PROVED BY FILING REGULAR RETURNS OF INCOME BEFORE THE SEARCH. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) DELETE D THE ADDITION MADE BY THE ASSESSING OFFICER. ACCORDING TO THE LD.DR, MERE FI LING OF RETURNS OF INCOME BEFORE THE DATE OF SEARCH CANNOT BE A REASON FOR DELETING THE ADDITION. IN THE ABSENCE OF ANY MATERIAL TO PROVE THE CREDITWORTHINESS, ACCORDING T O THE LD.REPRESENTATIVE, THE COMMISSIONER OF INCOME-TAX(A) IS NOT JUSTIFIED IN D ELETING THE ADDITION MADE BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI JOSE POTTOKKARAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE PURCHASED GOLD JEWELLER Y FROM THE PARTNERS AND THE FAMILY MEMBERS OF THE PARTNERS. THE PURCHASES WERE ENTERE D IN THE REGULAR BOOKS OF ACCOUNT. THE ASSESSEE HAS FILED THE REGULAR RETURNS OF INCOM E DISCLOSING THE PURCHASES. THE PARTNERS AND FAMILY MEMBERS ARE ALSO FILING THEIR R ETURNS OF INCOME REGULARLY DISCLOSING THEIR INCOME. THE ASSESSEE HAS FILED THE BALANCE-SH EET SHOWING THE BALANCES ALONG WITH THE RETURN OF INCOME BEFORE THE DATE OF SEARCH. TH EREFORE, ALL THE PURCHASES FROM THE PARTNERS AND FAMILY MEMBERS AS ALSO OTHER DETAILS A RE AVAILABLE WITH THE DEPARTMENT EVEN BEFORE THE DATE OF SEARCH. THEREFORE, ACCORDI NG TO THE LD.REPRESENTATIVE, WHEN THE MATERIALS ARE AVAILABLE WITH THE DEPARTMENT REGARDI NG THE PURCHASE OF GOLD JEWELLERY FROM THE PARTNERS AND THEIR FAMILY MEMBERS, THE SAI D PURCHASES CANNOT BE TREATED AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE LD.RE PRESENTATIVE FURTHER SUBMITTED THAT THE ASSESSEE CANNOT DOUBT THE CREDITWORTHINESS OF T HE PARTNERS AND THEIR FAMILY MEMBERS IN THE BLOCK ASSESSMENT PROCEEDINGS WHEN TH E RETURNS FILED BY THEM WERE ACCEPTED IN THE REGULAR COURSE BEFORE THE DATE OF S EARCH. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED THE ADDITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL PLACED ON RECORD. THE ONLY ISSUE ARISES F OR CONSIDERATION IS ADDITION OF 3 IT(SS)A NO. 46/COCH/2005 RS.1,98,74,835 BEING THE UNEXPLAINED PURCHASE OF GO LD FROM PARTNERS AND THEIR FAMILY MEMBERS. THE IDENTITY OF THE PARTNERS AND THEIR FA MILY MEMBERS ARE NOT IN DOUBT. THE RESPECTIVE PARTIES CONFIRMED THE CREDIT OF PURCHASE FOUND IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER DOUBTED ONLY THE CREDITWORTHINESS OF THE RESPECTIVE PARTNERS AND THEIR FAMILY MEMBERS. IT IS NOT IN DISPUTE THAT THE PART NERS AND THEIR FAMILY MEMBERS HAVE FILED THEIR RETURNS OF INCOME IN THE REGULAR COURSE BEFORE THE DATE OF SEARCH DISCLOSING SUFFICIENT INCOME. THE PARTNERS AND THEIR FAMILY M EMBERS OF THE ASSESSEE PURCHASED JEWELLERY FROM AND OUT OF THE INCOME DISCLOSED TO T HE DEPARTMENT. THAT JEWELLERY WAS SUBSEQUENTLY SOLD TO THE ASSESSEE AND WAS FOUND REC ORDED IN THE BOOKS OF ACCOUNT. THE BALANCES WERE ALSO DISCLOSED IN THE BALANCE-SHEET W HICH WAS FILED ALONG WITH THE RETURNS OF INCOME FILED BY THEM IN THE REGULAR COURSE BEFOR E THE DATE OF SEARCH. WHEN THE ASSESSEE DISCLOSED THE PURCHASE OF JEWELLERY FROM T HE PARTNERS AND THEIR FAMILY MEMBERS AND FILED ALL THE RETURNS DISCLOSING OF SUC H PURCHASE, THIS TRIBUNAL IS OF THE OPINION THAT SUCH PURCHASES CANNOT BE DOUBTED IN TH E BLOCK ASSESSMENT PROCEEDINGS. MOREOVER, WHEN THE ASSESSEE DISCLOSED ALL THE DETAI LS BEFORE THE DATE OF SEARCH, IT IS THE OBLIGATION OF THE DEPARTMENT TO VERIFY THE SAME IN THE REGULAR COURSE RATHER THAN IN THE BLOCK ASSESSMENT PROCEEDINGS. 5. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE OP INION THAT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER WITH REGARD TO PURCHASE OF GOLD FROM THE PARTNERS AND THEIR FAM ILY MEMBERS. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE LOWER AUTHO RITY. ACCORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND JUNE, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 22 ND JUNE, 2012 PK/- 4 IT(SS)A NO. 46/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