Rajeev Pandey, CHENNAI V. ACIT, CHENNAI

ITA 1084/CHNY/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4681 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 19-11-2013
• Assessment Year: 1997-1998
• Appeal Filed On: 22-05-2013
• Court: TRIBUNAL
• Department Lawyers: T N BETGIR I IRS
• Assessee Lawyers: T VASUDEVAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENTAND SHRI V, DURGA RAO, JUDICIAL MEMBER ITA NOS. 1082, 1083, 1084 & 1085(MDS)/2013 ASSESSMENT YEARS : 1995-96 TO 1998-99 SHRI RAJEEV PANDEY, NEW NO.3, 3 RD FLOOR, SANKARAPURAM MAIN ROAD, CHOOLAIMEDU, CHENNAI - 600 094. PAN : ADJPR 0626 H V. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS RANGE IV, CHENNAI - 600 034. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T. VASUDEV AN, ADVOCATE RESPONDENT BY : SHRI T.N. BETGIR I, IRS, JCIT DATE OF HEARING : 19 TH NOVEMBER, 2013 DATE OF PRONOUNCEMENT : 19 TH NOVEMBER, 2013 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THESE FOUR APPEALS ARE FILED BY THE ASSESSEE. TH E RELEVANT ASSESSMENT YEARS ARE 1995-96, 1996-97, 1997-98 AND 1998-99. THESE APPEALS ARE DIRECTED AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VIII AT CHENNA I, ON 12.2.2012. THE APPEALS AROSE OUT OF THE ASSESSMENT S COMPLETED IN 2 I.T.A. NOS.1082 TO 1085/MDS/13 CONSEQUENCE OF THE REVISION ORDER PASSED BY THE COM MISSIONER OF INCOME TAX. 2. THE THREE APPEALS RELATING TO ASSESSMENT YEARS 1 995-96, 1996-97 AND 1997-98 ARE FILED ON SAME SET OF GROUND S. THE FIRST GROUND IS REGARDING THE ADDITION MADE BY THE ASSESS ING AUTHORITY IN THE COST OF COMMERCIAL BUILDING CONSTRUCTED BY THE ASSESSEE AT ANNA NAGAR. THE SECOND COMMON ISSUE FOR THESE THRE E ASSESSMENT YEARS IS THAT THE COMMERCIAL PROPERTY WA S CONSTRUCTED NOT BY THE ASSESSEE ALONE AND HE IS ONLY A CO-OWNER OF THE PROPERTY HAVING 50% SHARE AND AS SUCH, ANY ADDITION MADE TOW ARDS COST OF CONSTRUCTION SHOULD HAVE BEEN DIVIDED INTO TWO AND ONLY 50% SHOULD BE ADDED IN THE HANDS OF THE ASSESSEE. 3. AS PER THE DETAILS FURNISHED BY THE ASSESSEE, TH E COST OF CONSTRUCTION OF THE COMMERCIAL BUILDING IS ` 35,60,134/-. THE COST OF CONSTRUCTION WAS REFERRED TO DEPARTMENTAL VALUATION OFFICER (DVO) AND DVO ESTIMATED THE COST OF CONSTRUCTION AT ` 65,03,000/-. IT IS ALSO TO BE SEEN THAT THE PROPERTY WAS VALUED BY AN ASSISTANT ENGINEER IN THE STATE PWD AS PART OF VIGILANCE PROC EEDINGS INITIATED AGAINST ASSESSEES FATHER. AS PER THE SAID VALUATI ON REPORT, THE COST WAS ESTIMATED AT ` 36,72,000/-. 3 I.T.A. NOS.1082 TO 1085/MDS/13 4. THE QUESTION OF ADDITION ON ACCOUNT OF COST OF C ONSTRUCTION WAS EARLIER PLACED BEFORE THE TRIBUNAL AND THE MATT ER WAS REMITTED BACK TO THE ASSESSING OFFICER FOR CONSIDERING THE O BJECTIONS RAISED BY THE ASSESSEE AND TO FIX THE COST OF CONSTRUCTION AT FAIR VALUE. BUT, THE ASSESSING OFFICER HAS ADOPTED THE SAME OLD FIGU RE AS A COST OF CONSTRUCTION, AGAIN RELYING ON THE REPORT OF THE DV O. 5. AFTER CONSIDERING THE ASPECTS OF THE COST OF CON STRUCTION OF THE COMMERCIAL BUILDING, WE FIND THAT THE VALUE CON SIDERED BY THE ASSESSEE IS ALMOST COMPARABLE TO THE VALUATION DONE BY THE STATE PWD. AT THE SAME TIME, THE VALUATION MADE BY THE D VO IS AT A HIGH PITCH. WE FIND THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY RELIEFS TO THE ASSESSEE ON DIFFERENT COUNTS, USUALL Y FOLLOWED IN SIMILAR CASES AS MATTERS OF CONVENTION. SELF-SUPER VISION IS ONE AMONG SUCH THINGS. IF THE ASSESSEE HIMSELF SUPERVI SES THE CONSTRUCTION OF THE BUILDING, A REBATE IS GRANTED T O THE COST OF CONSTRUCTION TOWARDS THAT SUPERVISION. LIKEWISE, I T IS USUALLY ACCEPTED THAT THERE USED TO BE DIFFERENCE BETWEEN T HE PRICE AND COST ADOPTED IN CPWD VALUATION AND PWD VALUATION. THIS IS BASED ON THE RATIONALE THAT PWD RATES ARE NEARER TO THE L OCAL RATES. WHERE THE DVO HAS ADOPTED CPWD RATES, USUALLY A REB ATE OF 10% TO 15% IS GIVEN TO MATCH WITH THE LOCAL PWD RATES. IN THE PRESENT 4 I.T.A. NOS.1082 TO 1085/MDS/13 CASE, THE ASSESSING OFFICER HAS NOT TAKEN INTO CONS IDERATION THE CONVENTIONAL REBATES IN A JUST AND FAIR MANNER. WE FIND THAT ON THAT GROUND ITSELF, THE VALUATION OF THE DVO MUST BE RED UCED FURTHER. NOW TAKING INTO CONSIDERATION ALL ASPECTS OF THE CA SE, WE FIND THAT A FIGURE NEAR TO THE AVERAGE OF THE THREE VALUES AVAI LABLE ON RECORD WILL BE A FAIR ESTIMATE OF THE COST OF CONSTRUCTION IN THE PRESENT CASE. AS SUCH, WE ESTIMATE THE COST OF CONSTRUCTION AT ` 45 LAKHS. THE ASSESSING OFFICER IS DIRECTED TO MODIFY THE ADDITIO N TOWARDS COST OF CONSTRUCTION TO THE ABOVE EXTENT. 6. NOW REGARDING THE 50% SHARE OF ASSESSEE ON THE COMMERCIAL PROPERTY, THE ISSUE NOT SEEMS TO BE CONS IDERED BY THE LOWER AUTHORITIES AND THE ASSESSEE HAS RAISED VERY SERIOUS GROUNDS. THE SAME SHOULD HAVE BEEN CONSIDERED IN A PROPER WA Y. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO HEAR THE ASSESSEE AGAIN AND CONSIDER POSSIBLE EVIDENCE, IF ANY, AVAIL ABLE WITH THE ASSESSEE AND COME TO A FINDING IN ACCORDANCE WITH L AW WHETHER THE ASSESSEE IS FULL OWNER OR CO-OWNER OF THE COMMERCIA L PROPERTY IN DISPUTE. IF THE ASSESSEE IS A CO-OWNER, THE ADDITI ON ON ACCOUNT OF THE COST OF CONSTRUCTION WILL BE CHARGED IN HIS HAN D ONLY ON PRO RATA. IF THE ASSESSEE IS ONLY A 50% OWNER, 50% OF THE ADD ITION ALONE WILL 5 I.T.A. NOS.1082 TO 1085/MDS/13 BE MADE IN THE HANDS OF THE ASSESSEE. THIS MAY BE LOOKED INTO BY THE ASSESSING AUTHORITY. 7. AS FAR AS THE APPEALS FOR THE ASSESSMENT YEARS 1 995-96, 1996-97 AND 1997-98 ARE CONCERNED, THE TWO COMMON G ROUNDS ARE ADJUDICATED ABOVE. THE ASSESSEE IS PARTLY SUCCESSF UL IN THESE THREE APPEALS. 8. NOW, WE ARE TAKING UP THE APPEAL FOR THE ASSESSM ENT YEAR 1998-99. THE ONLY ISSUE RAISED FOR THE IMPUGNED AS SESSMENT YEAR IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ADDITION AGAINST CASH CREDITS AMOUNT ING TO ` 19,57,451/-. IT IS TRUE THAT ALL THESE ISSUES HAVE BEEN ONCE REMITTED BACK BY THE TRIBUNAL TO THE ASSESSING OFFICER. BUT , WE FIND THAT THE ASSESSING OFFICER EVEN AT THE SECOND INSTANCE HAD G IVEN ONLY ONE WEEK PERIOD TO THE ASSESSEE TO PRODUCE ALL THE EVID ENCES. IN THAT WAY, WE FIND THAT THE ASSESSEE HAD NO EFFECTIVE OPP ORTUNITY TO PRESENT HIS CASE. THEREFORE, WE REMIT THE ISSUE OF ADDITION OF ` 19,57,451/- BACK TO THE ASSESSING AUTHORITY. THE A SSESSING AUTHORITY SHALL GIVE AN OPPORTUNITY TO THE ASSESSEE TO PRODUCE EVIDENCES, IF ANY, AVAILABLE WITH HIM AND AFTER OBT AINING EXPLANATIONS OF THE ASSESSEE, COME TO A DECISION IN ACCORDANCE 6 I.T.A. NOS.1082 TO 1085/MDS/13 WITH LAW. THUS, THE ISSUE RAISED FOR THE ASSESSMEN T YEAR 1998-99 IS SENT BACK TO THE ASSESSING OFFICER. 9. IN RESULT, ALL THE FOUR APPEALS FILED BY THE ASS ESSEE ARE TREATED AS PARTLY ALLOWED. ORDERS PRONOUNCED ON TUESDAY, THE 19 TH OF NOVEMBER, 2013 AT CHENNAI. SD/- SD/- (V. DURGA RAO) (DR. O. K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 19 TH NOVEMBER, 2013. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT-VI, CHENNAI-34 (4) CIT(A)-VIII, CHENNAI (5) DR (6) GF