ITO, Bangalore V. Shri Devadar Jayanand, Bangalore

ITA 1090/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5336 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-04-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 17-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER ITA NO.1090 / BANG/2009 (AS ST. YEAR - 2006-07) THE INCOME-TAX OFFICER, WARD-1(2), BANGALORE. . APPELLANT VS. SHRI DEVADAR JAYANAND, NO.11, WHEELER ROAD, FRAZER TOWN, BANGALORE. . RESPONDENT APPELLANT BY : SMT. V.S SREELEKHA, ADDL. COMMIS SIONER OF INCOME-T AX RESPONDENT BY : SHRI V. SRINIVASAN, CHARTERED ACCO UNTANT O R D E R PER DR. O.K NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A) I AT BANGALORE DATED 10/12/2008. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME-TAX A CT 1961. ITA NO.1090/B/09 2 2. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASS ESSING OFFICER HAS MADE AN ADDITION OF RS.70,13,937/- IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED INVESTMENT IN THE BUILDING CONSTRUCTED BY THE ASSESSEE. THE BASIS FOR SUCH ADDITION WAS THE FACT THAT THE A SSESSEE HAD FURNISHED THE ESTIMATED COST OF CONSTRUCTION OF THE BUILDING AND EXPENDITURE SO FAR INCURRED FOR THE CONSTRUCTION TO THE BANK FOR THE PURPOSE OF AVAILING LOANS AT FIGURES HIGHER THAN TH E FIGURES REFLECTED IN HIS BOOKS OF ACCOUNTS. SINCE THERE IS DISCREPANCY BETWEEN THE COST DECLARED BEFORE THE LENDING BANK AND THE COST ACCOU NTED BY THE ASSESSEE, THE ASSESSING OFFICER TREATED THE DIFFERE NTIAL AMOUNT AS INCOME TAXABLE IN THE HANDS OF THE ASSESSEE U/S 69. THE CONTENTION OF THE ASSESEE WAS THAT THE PARTICULARS WERE FURNISHED BEFORE THE BANK JUST FOR THE PURPOSE OF AVAILING A HIGHER AMOUNT OF LOAN, WHICH WOULD BE AVAILABLE ONLY IF THE ASSESSEE HAD FURNISHED THE BANK THAT THE COST INCURRED WAS ALREADY HIGH AND THE PROPOSED COST OF CONSTRUCTION WAS ALSO AT HIGHER AMOUNT. ANY-HOW THIS ARGUMENT WAS N OT ACCEPTED BY THE ASSESSING OFFICER. 3. IN FIRST APPEAL, THE CIT(A) FOUND THAT THE MERE RELIANCE ON THE DETAILS FURNISHED BY THE ASSESSEE TO THE BANK IS NO T ENOUGH TO MAKE HUGE ADDITIONS IN THE ABSENCE OF ANY OTHER CORROBOR ATIVE EVIDENCES. ITA NO.1090/B/09 3 THE CIT(A) FELT THAT THE DETAILS COULD HAVE BEEN OB TAINED FROM THE ASSESSEE AS WELL AS FROM THE CONSTRUCTION CONTRACTO R AND THE COST COULD HAVE BEEN CORRECTLY WORKED OUT. IN THE ABSENCE OF A NY SUCH DETAILS, HE DELETED THE ADDITION. THE REVENUE IS AGGRIEVED AND , THEREFORE, THE SECOND APPEAL BEFORE US. 4. WE HEARD SHRI V SRINIVASAN, THE LEARNED CHARTER ED ACCOUNTANT APPEARING FOR THE ASSESSEE AND SMT. V.S SREELEKHA, THE LEARNED ADDL. COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVEN UE 5. THE EXPLANATION OF THE ASSESSEE THAT WAS HE FURN ISHING INFLATED FIGURES OF COST OF CONSTRUCTION TO THE BANK FOR AVA ILING HIGHER AMOUNT OF BANK LOAN CANNOT BE DISMISSED AS IRRELEVANT, WHE N WE SEE AROUND THE PRACTICAL ASPECT OF LIFE. PEOPLE ARE USUALLY TE MPTED TO GIVE SUCH INFLATED FIGURES TO THE BANK TO AVAIL A HIGHER AMOU NT OF LOAN. THEREFORE AS RIGHTLY POINTED OUT BY THE CIT(A), ONL Y FOR THE REASON THAT THE COST FURNISHED BEFORE THE BANK WAS HIGHER THAN THE COST DISCLOSED BY THE ASSESSEE IS NOT A CONCLUSIVE EVIDE NCE TO BE HELD AGAINST THE ASSESSEE. SUCH A SITUATION COULD BE AN INSPIRATION FOR THE ASSESSING OFFICER TO MAKE FURTHER ENQUIRIES IN THIS REGARD AND COLLECT THE MATERIALS IF ANY TO DISCREDIT THE ACCOUNTS OF T HE ASSESSEE. BUT IN ITA NO.1090/B/09 4 THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT MAD E ANY SUCH ENQUIRIES AND HAS NOT COLLECTED ANY CORROBORATIVE E VIDENCES TO DISCREDIT THE ACCOUNTS OF THE ASSESSEE. THE COST O F CONSTRUCTION ACCOUNTED BY THE ASSESSEE IS COMPARABLE TO THE COST WORKED OUT BY THE REGISTERED VALUER. THE ASSESSING OFFICER HAS NOT G OT ANY VALUATION THROUGH HIS DEPARTMENT. IN THESE CIRCUMSTANCES, WE FIND THAT THERE IS NO HARD GROUND TO INTERFERE IN THE ORDER PASSED BY THE CIT(A). 6. IN RESULT, THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED ON TUESDAY THE 20 TH DAY OF APRIL, 2010, AT BANGALORE. SD/- SD/- (SHAILENDRA KUMAR YADAV) (DR. O.K NARAYA NAN) JUDICIAL MEMBER VICE PR ESIDENT VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF 7..GF, ITAT, NEW DELHI. BY ORD ER ASST. REGISTRAR, ITAT, BANGALORE.