M/s Neotric Construction Pvt. Ltd., Gwalior V. A.C.I.T., Circle-3, Gwalior

CO 6/AGR/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 3143 (ITAT-AGRA)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-02-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: K C AGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER & SHRI A. L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 449/AGRA/2010 ASST. YEAR : 2006-07 A.C.I.T., CIRCLE 3(1), VS. M/S. NEOTRIC CONSTRUCT ION PVT. LTD., GWALIOR. D-1, SILVER ESTATE, UNIVERSITY ROAD, GWALIOR (PAN : AAACN 6827 D) C.O. NO. 06/AGRA/2011 (IN ITA NO. 145/AGRA/2010) ASST. YEAR : 2006-07 M/S. NEOTRIC CONSTRUCTION PVT. LTD., VS. A.C.I.T., CIRCLE 3(1), D-1, SILVER ESTATE, UNIVERSITY ROAD, GWALIOR. GWALIOR. (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI A.K. SHARMA, JR. D.R. FOR ASSESSEE : SHRI K.C. AGARWAL, ADVOCATE DATE OF HEARING : 21.02.2012 DATE OF PRONOUNCEMENT : 24.02.2012 ORDER PER BHAVNESH SAINI, J.M. : THE DEPARTMENTAL APPEAL AND THE CROSS-OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 17.0 9.2010 FOR THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE FILED THE APPEAL ON THE FOLLOWING GR OUNDS : ITA NO. 449/AGRA/2010 & C.O. NO. 06/AGRA/2011 2 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(APPEALS) HAS ERRED IN HOLDING THAT THE ASSE SSING OFFICER WAS NOT JUSTIFIED IN MAKING REFERENCE U/S. 142A TO THE DVO WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.24,12,812/- ON ACCOUNT OF DIFFERENCE IN COST OF INVESTMENT. 3. THE ASSESSEE FILED THE CROSS OBJECTION MERELY IN SUPPORT OF THE ORDER OF LD. CIT(A). THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, SEEKS PERMISSION TO WITHDRAW THE CROSS-OBJECTION. THE CROSS-OBJECTION OF THE ASS ESSEE IS, THEREFORE, DISMISSED AS WITHDRAWN. 4. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE-COMPANY WAS ENGAGED IN CONSTRUCTION AND MAINTAINING BUILDINGS & FLATS. THE ASSESSEE PRODUCED BOOKS OF ACCOUNT, BILLS AND VOUCHERS, WHICH WERE EXAMINED BY THE ASSESSING OFFICER. THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) OF THE INC OME-TAX ACT. REFERENCE WAS MADE TO THE VALUATION OFFICER FOR VERIFYING THE COR RECTNESS OF THE COST OF INVESTMENT IN CONSTRUCTION. THE ASSESSING OFFICER M ADE ADDITION OF RS.24,12,812/- ON ACCOUNT OF DIFFERENCE IN THE COST OF CONSTRUCTIO N REPORTED BY THE ASSESSEE AS WELL AS DEPARTMENTAL VALUATION OFFICER. THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A) AND IT WAS CONTENDED THAT THE BOOKS OF ACCOU NT OF THE ASSESSEE ARE AUDITED AND NO DEFECTS HAVE BEEN POINTED OUT THEREIN. THE C LAIM OF DEDUCTION U/S. 80IB(10) ITA NO. 449/AGRA/2010 & C.O. NO. 06/AGRA/2011 3 HAS BEEN ALLOWED TO THE ASSESSEE. REFERENCE TO THE DVO U/S. 142A IS INVALID WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSES SEE. THE ASSESSEE RELIED UPON THE DECISION OF RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. HOTEL JOSHI, 244 ITR 478 (RAJ.) AND SUBMITTED THAT SINCE ALL THE BILLS, VOUC HERS AND DETAILS OF THE CONSTRUCTION HAVE BEEN MAINTAINED AND THE ASSESSING OFFICER HAS NOT POINTED OUT ANY INFIRMITY THEREON, THEREFORE, NO REFERENCE CAN MADE TO THE DV O U/S. 142A. 5. THE LD. CIT(A), AFTER CONSIDERING THE MATERIAL O N RECORD, FOUND THAT THE REFERENCE TO DVO FOR ASCERTAINING THE COST OF CONST RUCTION CANNOT BE MADE IN ROUTINE MANNER. REFERENCE CAN BE MADE IF THE ASSESS ING OFFICER IS NOT SATISFIED WITH THE CORRECTNESS OF THE ACCOUNT BOOKS OF THE AS SESSEE. HOWEVER, IN THIS CASE, THE ACCOUNTS OF THE ASSESSEE HAVE NOT BEEN REJECTED WHICH HAVE BEEN MAINTAINED IN REGULAR COURSE. THE LD. CIT(A) RELIED UPON THE DECI SION OF MADRAS HIGH COURT IN THE CASE OF K.K. SESHAIYER VS. CIT 246 ITR 351. THE LD. CIT(A) ALSO NOTED THAT THE ASSESSING OFFICER HAS ACCEPTED THE AUDITED BOOKS OF THE ASSESSEE WITHOUT POINTING OUT ANY DEFECT THEREIN AND DEDUCTION HAS BEEN ALLOW ED U/S. 80IB(10) OF THE INCOME-TAX ACT. THEREFORE, REFERENCE TO THE DVO WAS NOT JUSTIFIED TO ASCERTAIN THE COST OF CONSTRUCTION. THE APPEAL OF THE ASSESSEE ON THAT GROUND WAS, ACCORDINGLY, ALLOWED. THE LD. CIT(A) FURTHER WENT ON TO DECIDE T HE ISSUE ON MERIT AND ITA NO. 449/AGRA/2010 & C.O. NO. 06/AGRA/2011 4 CONSIDERING THE MATERIAL ON RECORD AND AFTER GIVING USUAL DEDUCTIONS FOR SELF- SUPERVISION ETC., DELETED THE ADDITION ON MERIT ALS O. 6. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE ISSUE IS S QUARELY COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SARGAM CINE MA VS. CIT, 197 TAXMAN 203 (328 ITR 513), IN WHICH THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE NOT REJECTED AND THE ASSESSING OFFICER REFERRED THE MATTER TO TH E DVO. IT WAS, THEREFORE, HELD THAT NO REFERENCE COULD BE MADE TO DVO. 7. ON CONSIDERATION OF THE ABOVE FACTS, WE DO NOT F IND ANY MERIT IN THE APPEAL OF THE REVENUE. THE LD. CIT(A) HAS GIVEN SPECIFIC F INDING THAT THE ASSESSEE MAINTAINED PROPER BOOKS OF ACCOUNT, WHICH HAVE BEEN AUDITED WHEREIN NO DEFECTS HAVE BEEN POINTED OUT BY THE ASSESSING OFFICER. THE REFORE, REFERENCE TO THE DVO FOR ASCERTAINING THE COST OF CONSTRUCTION ON ESTIMA TE BASIS WAS HIGHLY UNJUSTIFIED. THE LD. CIT(A), THEREFORE, RIGHTLY DECIDED THE ISSU E IN FAVOUR OF THE ASSESSEE FOR QUASHING THE REFERENCE ITSELF. FURTHER, THE ASSESSE E HAS BEEN GRANTED DEDUCTION U/S. 80IB(10), WHICH WOULD CLEARLY INDICATE THAT THE REF ERENCE TO THE DVO WAS HIGHLY UNJUSTIFIED. WE, THEREFORE, CONFIRM THE FINDING OF THE LD. CIT(A) IN HOLDING THAT THE REFERENCE TO THE DVO IS UNJUSTIFIED IN THE MATTER I N DISPUTE. THE ISSUE IS ALSO ITA NO. 449/AGRA/2010 & C.O. NO. 06/AGRA/2011 5 COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SARGAM CINEMA (SUPRA) IN FAVOUR OF THE ASSESSEE. ONCE THE REFEREN CE TO THE DVO IS HELD TO BE UNJUSTIFIED, THE RESULTANT ADDITION WOULD STAND DEL ETED. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION TO INTERFERE IN THE FINDING OF TH E LD. CIT(A). THE DEPARTMENTAL APPEAL HAS NO MERIT AND IS, THEREFORE, DISMISSED. 8. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED AND THE CROSS-OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24 TH FEBRUARY, 2012 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY