Ms R.Ambujavalli, Salem V. ITO, Salem

CO 95/CHNY/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 5893 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 09-09-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Keywords: Unexplained investment; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO. 1212/MDS/2010 ASSESSMENT YEAR : 2004-05 THE INCOME TAX OFFICER, WARD II(3), SALEM. (APPELLANT) V. SMT. R. AMBUJAVALLI, NO.35, S.K. NAGAR, SEELANAICKENPATTI, SALEM-636 201. PAN : AEHPA5677D (RESPONDENT) C.O. NO. 95/MDS/2010 (IN I.T.A. NO. 1212/MDS/2010) ASSESSMENT YEAR : 2004-05 SMT. R. AMBUJAVALLI, NO.35, S.K. NAGAR, SEELANAICKENPATTI, SALEM-636 201. (CROSS OBJECTOR) V. THE INCOME TAX OFFICER, WARD II(3), SALEM. (RESPONDENT) REVENUE BY : SHRI K.E.B. RENGARAJAN JUNIOR STANDING COUNSEL ASSESSEE BY : SHRI ANAND D BABUNATH O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : I.T.A. NO. 1212/MDS/2010 IS AN APPEAL FILED BY THE REVENUE AGAINST AN ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), SALEM IN APPEAL NO.221/06-07 DATED 3.5.2010 FOR THE ASSESSMENT I.T.A. NO. 1212/MDS/10 C.O. NO. 95/MDS/10 2 YEAR 2004-05. C.O. NO. 95/MDS/10 IS A CROSS OBJECT ION FILED BY THE ASSESSEE AGAINST THE REVENUES APPEAL IN I.T.A. NO. 1212/MDS/2010. 2. SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL REPRESENTED ON BEHALF OF THE REVENUE AND SHRI ANANDD BABUNATH, C.A. REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LD. JUNIOR STANDING COUN SEL THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED TH AT THE ASSESSEE HAD CONSTRUCTED A RESIDENTIAL HOUSE AND THE COST OF CONSTRUCTION OF THE SAID PROPERTY HAD BEEN REFERRED TO DVO, WHO HAD INSPECTED THE PROPERTY AND HAD VALUED THE COST OF CONSTRUCTION AT ` 17,62,700/- BEFORE GRANTING THE DEDUCTION TOWARDS SELF-SUPERVIS ION. IT WAS FURTHER SUBMITTED THAT IT WAS NOTICED FROM THE RETURN THAT THE ASSESSEE HAD ADMITTED ONLY ` 7,60,500/- TOWARDS THE COST OF CONSTRUCTION. IT W AS SUBMITTED THAT THE DIFFERENCE OF ` 10,02,200/- HAD BEEN TREATED BY THE A.O. AS UNEXPLAINED INVESTMENT. IT WAS SUBMITTED T HAT IN APPEAL BEFORE THE LD. CIT(APPEALS) THE ASSESSEE HAD CLAIME D THAT THE CONSTRUCTION OF THE RESIDENTIAL PROPERTY WAS COMMEN CED IN JANUARY, 2003 AND COMPLETED IN AUGUST, 2006. IT WAS A FURTH ER SUBMISSION THAT LD. CIT(APPEALS) HAD ACCEPTED THE CONTENTION O F THE ASSESSEE AND HAD DIRECTED THE A.O. TO SPREAD OVER THE COST O F CONSTRUCTION OF I.T.A. NO. 1212/MDS/10 C.O. NO. 95/MDS/10 3 THE HOUSE FROM THE ASSESSMENT YEAR 2004-05 TO ASSES SMENT YEAR 2007-08. IT WAS A FURTHER SUBMISSION THAT BEFORE T HE LD. CIT(APPEALS) THE ASSESSEE HAD ALSO PRODUCED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 WHEREIN THE ASSESSEE HAD DI SCLOSED THE COST OF CONSTRUCTION AS ON 31.03.2005 AS ` 12,08,188/- AS ALSO THE RETURN FOR THE ASSESSMENT YEAR 2006-07 WHEREIN THE COST OF CONSTRUCTION HAD BEEN DECLARED AT ` 18,07,918/-. FURTHER SUBMISSION WAS THAT THE LD. CIT(APPEALS) OUGHT NOT TO HAVE GRA NTED THE SPREAD OVER OF THE ADDITION REPRESENTING THE COST OF CONST RUCTION. IT WAS ALSO A SUBMISSION THAT THE EVIDENCES PRODUCED BEFORE THE LD. CIT(APPEALS) WERE NOT PRODUCED BEFORE THE A.O. IT WAS A FURTHER SUBMISSION THAT THERE WAS VIOLATION OF RULE 46A OF INCOME-TAX RULES, 1962. 4. IN REPLY, THE LEARNED A.R. DREW OUR ATTENTION TO PARA 8 AT PAGE NO.4 OF THE ORDER OF THE LD. CIT(APPEALS) WHEREIN L D. CIT(APPEALS) HAD QUESTIONED THE ASSESSEE FOR NOT TAKING OBJECTIO N IN ASSESSING THE COST OF CONSTRUCTION IN ONE ASSESSMENT YEAR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS SUBMITTED THAT THE ASSESSEE HAD ALSO REPLIED TO THE SAME. IT WAS A FURTHER SUBMISS ION THAT THE LETTER OF PANCHAYAT PRESIDENT CONFIRMING THAT THE BUILDING WA S ASSESSED TO TAX ONLY IN AUGUST, 2006, WAS RECEIVED ONLY AFTER THE A SSESSMENT. IT WAS I.T.A. NO. 1212/MDS/10 C.O. NO. 95/MDS/10 4 A SUBMISSION THAT EVEN BEFORE THE A.O., IN THE COUR SE OF ASSESSMENT PROCEEDINGS, IT WAS BROUGHT TO HIS ATTENTION THAT T HE CONSTRUCTION HAD COMMENCED DURING THE ACCOUNTING YEAR 2002-03. IT W AS A FURTHER SUBMISSION THAT THE RETURNS FILED FOR THE ASSESSMEN T YEARS 2005-06 AND 2006-07 CLEARLY SHOWED THAT THE CONSTRUCTION DI D CONTINUE TILL THE ASSESSMENT YEAR 2007-08. HE VEHEMENTLY SUPPORTED T HE ORDER OF THE CIT(APPEALS). 5. IN REGARD TO THE CROSS OBJECTION, THE LEARNED A. R. SUBMITTED THAT THE CROSS OBJECTION WAS FILED IN SUPPORT OF TH E ORDER OF THE ORDER OF THE CIT(APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER IN THE ASSESSEES CASE CLEARLY SHO WS THAT IT WAS SUBMITTED BEFORE THE A.O. THAT THE CONSTRUCTION OF THE RESIDENTIAL HOUSE WAS COMMENCED DURING THE ASSESSMENT YEAR 2002 -03. A PERUSAL OF THE RETURNS, WHICH HAD BEEN FILED FOR TH E ASSESSMENT YEARS 2005-06 AND 2006-07, CLEARLY SHOWS THAT THE CONSTRU CTION HAS BEEN COMPLETED ONLY DURING THE ASSESSMENT YEAR 2007-08. RETURNS OF INCOME ARE NOT FRESH EVIDENCES. EVEN IF THE LETTER OF THE PANCHAYAT PRESIDENT IS TREATED AS AN ADDITIONAL EVIDENCE AND DISREGARDED, STILL THE FACT IS THAT CONSTRUCTION HAD BEEN GOING ON OVE R A PERIOD OF FOUR I.T.A. NO. 1212/MDS/10 C.O. NO. 95/MDS/10 5 YEARS WHICH IS EVIDENT FROM THE RETURNS OF INCOME F ILED. ONCE IT IS NOTICED THAT THE CONSTRUCTION HAS BEEN GOING ON FOR A PERIOD OF MORE THAN ONE YEAR, THEN ANY ADDITION REPRESENTING THE U NDISCLOSED INVESTMENT IN THE BUILDING WOULD HAVE TO BE SPREAD OVER DURING THE RELEVANT YEARS DURING WHICH THE CONSTRUCTION HAS BE EN DONE. A PERUSAL OF THE ORDER OF THE LD. CIT(APPEALS) CLEARL Y SHOWS THAT THIS IS HOW HE HAS DEALT WITH THE ISSUE. IN THESE CIRCUMST ANCES, WE ARE OF THE VIEW THAT THE FINDING OF THE LD. CIT(APPEALS) I S ON RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. THUS THE APPEA L IS DISMISSED. 7. AS THE CROSS OBJECTION HAS BEEN FILED BY THE ASS ESSEE IN SUPPORT OF THE ORDER OF THE CIT(APPEALS) AND NO ARG UMENTS HAVE BEEN PLACED, THE CROSS OBJECTION IS DISMISSED AS IN FRUCTUOUS. 8. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE STAND DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 4 TH MAY, 2011. SD/- SD/- (DR. O.K. NARAYANAN) (G EORGE MATHAN) VICE PRESIDENT JUDICIAL M EMBER CHENNAI, DATED THE 4 TH MAY, 2011. KRI. I.T.A. NO. 1212/MDS/10 C.O. NO. 95/MDS/10 6 COPY TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A), SALEM (4) CIT, SALEM (5) D.R. (6) GUARD FILE