Smt. Vasantha Thangaraj, CHENNAI V. ITO, CHENNAI

CO 1/CHNY/1996

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 5271 (ITAT-CHENNAI)
• Duration Of Justice: 14 year(s) 10 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-11-2010
• Assessment Year: 1992-1993
• Appeal Filed On: 01-01-1996
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Keywords: Additional evidence

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI B BENCH, CHENNAI. (BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. ABRAHAM P. GE ORGE, A.M.) I.T.A. NO. 2489/MDS/1995 ASSESSMENT YEAR 1992-93 THE INCOME TAX OFFICER, SALARY WARD II(2), MADRAS. VS. SHRI T. DANIEL SUDHAKAR, L/H OF LATE SMT. VASANTHA THANGARAJ, 1359/1, 11 TH STREET, 18 TH MAIN ROAD, I BLOCK, VALLALARKUDIYIRUPPU, ANNA NAGAR WEST, MADRAS 40. [PAN NO. -] C.O. NO. 01/MDS/1996 [IN I.T.A. NO. 2489/MDS/1995] ASSESSMENT YEAR 1992-93 SHRI T. DANIEL SUDHAKAR, L/H OF LATE SMT. VASANTHA THANGARAJ, 1359/1, 11 TH STREET, 18 TH MAIN ROAD, I BLOCK, VALLALARKUDIYIRUPPU, ANNA NAGAR WEST, MADRAS 40. [PAN NO. -] VS. THE INCOME TAX OFFICER, SALARY WARD II(2), MADRAS. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.B. SEKARAN ASSESSEE BY : NONE O R D E R PER U.B.S. BEDI, J.M: THIS APPEAL OF THE DEPARTMENT AND THE CO OF THE AS SESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) IV, MADR AS DATED 28.07.1995 RELEVANT TO THE ASSESSMENT YEAR 1992-93. 2. THE DEPARTMENT HAS RAISED IN ALL SEVEN GROUNDS, GROUND NO.1 IS GENERAL AND GROUND 7 IS PRAYER PART AND EFFECTIVE GROUNDS 2 TO 6 READS AS UNDER: 2. THE CIT(A) ERRED IN COMING TO THE CONCLUSION TH AT THE ASSESSEE HAD SPENT A SUM OF `.6,80,500/- ON IMPROVEMENTS TO THE PROPER TY PURCHASED BY HER ON 29.1.1992. 3. THE CIT(A) ERRED IN RELYING ON THE COPIES OF BI LLS PRODUCED BY THE ASSESSEE BEFORE HIM, FROM M/S. VIJAYA CONSTRUCTIONS AND FROM MR. SRINIVASAN. I.T.A. NO. 2489/MDS/95 & CO NO. 01/MDS/96 2 4. THE CIT(A) FAILED TO NOTE THAT THE NEW ASSET WA S PURCHASED BY THE ASSESSEE ONLY ON 29.1.1992, WHEREAS THE BILLS PRODU CED BY THE ASSESSEE FROM SRINIVASAN ARE ALL DATED IN JUNE, 1991. AS FAR AS T HE COPIES OF BILLS OF VIJAYA CONSTRUCTIONS ARE CONCERNED, THEY ARE NOT EVEN DATE D. IN THIS VIEW OF THE MATTER, THE CIT(A) OUGHT NOT HAVE RELIED ON THESE EVIDENCES TO REJECT THE COST OF CONSTRUCTION AS ESTIMATED BY THE ASSESSING OFFICER. 5. THE CIT(A) OUGHT TO HAVE FURTHER SEEN FROM THE ASST. ORDER ITSELF THAT EVEN THOUGH FIVE OPPORTUNITIES WERE GIVEN TO THE ASSESSE E BY THE ASSESSING OFFICER, THE ASSESSEE HAD NEVER BOTHERED TO AVAIL OF THESE OPPOR TUNITIES AND PRODUCE THE EVIDENCE CALLED FOR BY THE ASSESSING OFFICER, AND T HIS HAD RESULTED IN THE COMPLETION OF THE ASSESSMENT U/S. 144. 6. THE CIT(A) IN THE CIRCUMSTANCES OUGHT TO HAVE R EMANDED THE MATTER TO THE ASSESSING OFFICER SINCE EVIDENCES WHICH WERE NOT PR ODUCED BEFORE THE ASSESSING OFFICER WERE PRODUCED BEFORE HIM FOR THE FIRST TIME , AS REQUIRED UNDER RULE 46A OF THE INCOME-TAX RULES, 1962. 3. IN THE CROSS OBJECTION OF THE ASSESSEE, FOLLOWI NG GROUNDS HAVE BEEN RAISED: 1. THE ORDER OF THE CIT(A) IN SO FAR AS IT IS AGAI NST THE ASSESSEE IS CONTRARY TO LAW, ERRONEOUS AND UNSUSTAINABLE ON THE FACTS OF TH E CASE. 2. THE CIT(A) HAVING COME TO THE CONCLUSION THAT T HE VALUATION CELL HAS NOT CONSIDERED THE ADDITIONS AND RENOVATIONS MADE IN TH E ENTIRE BUILDING, OUGHT TO HAVE ACCEPTED FULLY THE COST OF CONSTRUCTION CLAIME D BY THE ASSESSEE. 3. THE CIT(A) WAS NOT JUSTIFIED IN ARBITRARILY FIX ING THE EXTRA WORK AT `.3 LAKHS OUT OF THE TOTAL PAYMENTS OF ` .3.70 LAKHS MADE TO MR. SRINIVASAN. 4. THE CIT(A), IN VIEW OF THE DISCREPANCIES FOUND IN THE REPORT OF THE VALUATION CELL, OUGHT TO HAVE ACCEPTED THE COST OF ADDITIONAL CONSTRUCTION AS RETURNED, AND NOT MADE ANOTHER ESTIMATE OVER THE RE TURNED FIGURE. 5. THE CIT(A), IN ANY VIEW OF THE MATTER, OUGHT TO HAVE ACCEPTED THE COST OF CONSTRUCTION AT ` . 7,87,000/- AS RETURNED BY THE ASSESSEE AND NOT RE STRICTED IT TO ` .6,85,000/-. 4. THE LD. CIT(A) IN THIS CASE HAS NOTED THE ISSUE AND FACTS IN PARA 2 AND CONCLUDED TO GIVE PART RELIEF TO THE ASSESSEE AS PE R PARA 3 OF HIS ORDER. PARA 2 AND 3 ARE REPRODUCED AS UNDER: 2. THE ONLY ISSUE FOR CONSIDERATION IS THE COST O F ADDITIONAL CONSTRUCTION TO A BUILDING PURCHASED BY THE APPELLA NT DURING THE I.T.A. NO. 2489/MDS/95 & CO NO. 01/MDS/96 3 RELEVANT PREVIOUS YEAR. THE APPELLANT CLAIMED THAT SHE HAD SPEND ` .7,87,000 TOWARDS ADDITIONAL CONSTRUCTION. THE MATT ER WAS REFERRED TO THE VALUATION CELL AND IT ESTIMATED THE COST OF ADDITIONAL CONSTRUCTION AT ` .2,35,700. THE ASSESSING OFFICER BROUGHT THE REPORT OF THE VALUATION CELL TO THE NOTICE OF THE APPELLAN T AND WANTED HER OBJECTION IF ANY FOR TAKING THE ESTIMATED COST AT ` .2,35,000. THE APPELLANT DID NOT FILE ANY REPLY TO THE ABOVE PROPO SAL. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT EXPARTE BY TAKING THE ADDITIONAL COST OF CONSTRUCTION AT ` .2,35,700. 3. THE COUNSEL SUBMITTED THAT THE APPELLANT DUE TO SERIOUS ILL HEALTH COULD NOT COMPLY TO THE NOTICES OF THE ASSES SING OFFICER. IT WAS BROUGHT TO MY NOTICE THAT THE ADDITIONAL CONSTRUCTI ON WORK WAS CARRIED ON BY VIJAYA CONSTRUCTION A REPUTED CONCERN UNDER T AKING CONSTRUCTION ACTIVITIES AND MR. SRINIVASAN A REPUTE D CONTRACTOR. THE DETAILS OF THE CONSTRUCTION AND THE AMOUNTS RECEIVE D BY VIJAYA CONSTRUCTION TOTALING TO ` .3,80,593 WAS FILED BEFORE ME. SIMILARLY, THE APPELLANT FILED COPIES OF THE DETAILS OF THE WORK C ARRIED ON BY MR. SRINIVASAN AND ALSO THE MONEY RECEIPTS FOR RECEIVIN G THE AMOUNT OF ` .3,70,000 FROM THE APPELLANT. BY GOING THROUGH THE REPORT OF THE VALUATION CELL, I FIND THAT THE VALUATION CELL ONLY CONSIDERED THE ADDITIONAL CONSTRUCTION OF THE FIRST FLOOR WHEREAS THE RENOVATION OF THE GROUND FLOOR WAS LEFT OUT. THIS IS EVIDENT BY COMPA RING THE DESCRIPTION OF THE WORK MENTIONED IN THE BILL OF VIJAYA CONSTRU CTION AND THE DETAILS GIVEN IN THE REPORT OF THE VALUATION OFFICE R. AS THE DETAILS ARE NOW AVAILABLE, I AM INCLINED TO HOLD THAT THE WORK TO THE EXTENT OF ` .3,80,500 DONE BY VIJAYA CONSTRUCTION WAS NOT CONSI DERED BY THE VALUATION CELL. THOUGH THE APPELLANT SUBMITTED THE MONEY RECEIPTS FOR PAYING ` .3,70,000 TO MR. SRINIVASAN, THE DETAILS OF CONSTRU CTION ARE NOT TOTALLY AVAILABLE. IN MY OPINION, THE EXTRA WOR K CAN BE TAKEN AT ` .3 LAKHS. SO, I AM OF THE OPINION THAT THE COST OF ADD ITIONAL CONSTRUCTION CAN BE TAKEN AT ` .6,80,500/- IN THE PLACE OF ` .2,35,700 ADOPTED BY THE ASSESSING OFFICER. 5. THE NOTICE OF HEARING WAS DIRECTED TO BE SENT T HROUGH THE DR ON THE LEGAL HEIRS OF THE ASSESSEE. THE LD. DR HAS FILED THE SER VICE REPORT FROM THE DCIT SC. IV, CHENNAI - 600 034 DATED 19.11.2010 ALONG WITH P HOTOCOPY OF SERVICE AFFECTED ON THE LEGAL HEIR OF THE ASSESSEE FOR A DATE OF 22. 11.2010. DESPITE SERVICE OF NOTICE NEITHER THE LEGAL HEIR NOR ANYBODY ON THEIR BEHALF ENTERED APPEARANCE AT THE TIME WHEN CASE WAS CALLED FOR HEARING. UNDER TH E CIRCUMSTANCES, WE PROCEED I.T.A. NO. 2489/MDS/95 & CO NO. 01/MDS/96 4 EX PARTE QUA THE ASSESSEE AND DECIDE THE MATTERS AF TER CONSIDERING THE ARGUMENTS OF THE LD. DR AND MATERIAL ON RECORD. 6. THE LD. DR WHILE RELYING UPON THE GROUNDS OF AP PEAL HAS PLEADED THAT THE LD. CIT(A) HAS OBTAINED CERTAIN FRESH MATERIAL/EVID ENCE, WHICH WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER, WITHOUT PUTTING THE S AME TO THE ASSESSING OFFICER AND AFTER CONSIDERING SUCH MATERIAL/EVIDENCE, HE HA S GIVEN PART RELIEF TO THE ASSESSEE, WHICH IS IN CONTRAVENTION OF RULE 46A OF ITAT RULES. THEREFORE, HIS ACTION IS NEITHER VALID NOR PROPER AS SUCH, IN THE INTEREST OF JUSTICE, THE ORDER OF THE LD. CIT(A) SHOULD BE SET ASIDE AND MATTER MAY B E RESTORED ON HIS FILE WITH THE DIRECTION TO COMPLY WITH RULE 46A TO REDECIDE THE A PPEAL. 7. AFTER HEARING THE LD. DR, CONSIDERING THE MATER IAL ON RECORD AS WELL AS RELEVANT PROVISIONS OF LAW, FIND FROM THE ORDER OF LD. CIT(A), NOT ONLY THE DEPARTMENT IS AGGRIEVED, BUT THE ASSESSEE IS ALSO A GGRIEVED, WHO HAS FILED THE CROSS OBJECTION. NO DOUBT, AS PER MATERIAL AVAILABL E ON RECORD, CERTAIN FRESH EVIDENCE/MATERIALS WHICH WERE NOT FILED BEFORE THE ASSESSING OFFICER HAS BEEN OBTAINED AND TAKEN INTO CONSIDERATION WHILE GIVING PART RELIEF TO THE ASSESSEE, WHICH ACTION IS AGAINST THE SPECIFIC PROVISION OF L AW AS CONTAINED IN RULE 46A OF ITAT RULES, 1962. THEREFORE, IN THE INTEREST OF JUS TICE AND TO HAVE FAIR PLAY IN THE MATTER, WE FIND IT JUST AND APPROPRIATE TO SET ASID E THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK ON HIS FILE WITH THE DIRECT ION TO DECIDE THE APPEAL AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AND IN CASE SUCH ADDITIONAL EVIDENCE/MATERIAL HAS TO BE TAKEN INTO CONSIDERATIO N THAN TO FOLLOW THE PROVISIONS OF RULE 46A AFTER GIVING DUE OPPORTUNITY TO BOTH TH E SIDES. WE HOLD AND DIRECT ACCORDINGLY. I.T.A. NO. 2489/MDS/95 & CO NO. 01/MDS/96 5 8. IN THE RESULT, THE APPEAL OF THE DEPARTMENT AS WELL AS CROSS OBJECTION OF THE ASSESSEE IS TREATED TO HAVE BEEN ACCEPTED FOR S TATISTICAL PURPOSES. THE ORDER IS PRONOUNCED SOON AFTER THE CONCLUSION OF HEARING ON 22.11.10. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI, DATED, THE 22.11.2010. VM/- COPY TO : APPELLANT/RESPONDENT/CIT(A)- /CIT/DR