ITO, Alwar V. M/S MAA SANTOSHI MARBLES (P) LTD., Alwar

ITA 11/JPR/2011

• Counselvise Citation: 1123114 RSA 2011
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 05-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Keywords: Deemed to accrue or arise in india
• Section: 143(3)

Judgement Text

1 ITA 11-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 11/JP/2011 ASSTT. YEAR : 2005-06. THE INCOME-TAX OFFICER, VS. M/S. MAA SANTOSHI MAR BLES P. LTD., WARD 2(3), SPL-1/B, INDUSTRIAL AREA, ALWAR. BHIWADI (ALWAR.) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K. MEENA RESPONDENT BY : NONE DATE OF HEARING : 09.08.2011 DATE OF PRONOUNCEMENT : 19.8.2011. ORDER DATED : 19/08/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. THE DEPARTMENT IS OBJECTING IN DELETING THE ADDI TION OF RS. 18,00,000/- MADE BY AO UNDER SECTION 28(IV) OF I.T. ACT. 3. THE LD. D/R HAS PLACED RELIANCE ON THE ORDER OF A.O. 4. ON THE OTHER HAND NONE APPEARED ON BEHALF OF THE ASSESSEE. THE APPEAL IS BEING DISPOSED OFF AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A). 5. THE AO MADE AN ADDITION OF RS. 18,00,000/- BY OB SERVING THAT DURING THE YEAR M/S. MEWAT GRIT UDYOG, PARTNERSHIP FIRM HAS APPRECI ATED THE VALUE OF LAND AT RS. 1.8 2 CRORE WHICH WAS DEBITED IN LAND APPRECIATION AND RE SERVE SURPLUS ACCOUNT. THE ASSESSEE COMPANY IS PARTNER HAVING 10% SHARE IN THE FIRM AND ACCORDINGLY THE CAPITAL ACCOUNT OF THE COMPANY, AS PARTNER HAS BEEN CREDITED RS. 18 LA C. THE CREDIT OF RS. 18 LAC WERE TREATED BY THE AO AS INCOME UNDER SECTION 28(IV) OF THE IT ACT AND UNDER SECTION 2(24) OR SECTION 4 OF IT ACT AS DEEMED INCOME OF THE ASSESSE E. DETAILED WRITTEN SUBMISSIONS WERE FILED BEFORE LD. CIT (A). IT WAS SUBMITTED THAT TH E FIRM HAS REVALUED THE LAND AND FLAT ON ESTIMATE BASIS BY CREDITING THE PARTNERS ACCOUNT A ND DEBITING THE RESERVE AND SURPLUS ACCOUNT. THE ASSESSMENTS OF BOTH THE FIRMS WERE FRA MED UNDER SECTION 143(3) AND NO ADDITION WAS MADE ON ACCOUNT OF REVALUATION OF ASSE TS. IT WAS FURTHER SUBMITTED THAT AO TAXED THE DIFFERENCE BETWEEN THE COST PRICE AND APP RECIATED VALUE WHICH AMOUNTS TO RS. 18 LACS SETTING ASIDE SO MANY CASE LAWS OF THE HON BLE HIGH COURTS AND TRIBUNALS. IT WAS FURTHER SUBMITTED THAT IT IS WELL SETTLED THAT UNDER SECTION 28(IV) ANY PROFIT AND GAINS ARISE IN THE COURSE OF BUSINESS ONLY IF CERTAIN DEA LINGS ARE MADE BETWEEN THE ASSESSEE AND SOME OUTSIDERS. NO PROFIT OR GAINS ARISES TO THE A SSESSEE MERELY BY THE ACT OF REVALUATION OF ASSETS HELD BY THE ASSESSEE. RELIANCE WAS PLACE D IN CASE OF KIKABHAI PREMCHAND VS. CIT, 24 ITR 506 (SC). FURTHER DETAILED SUBMISSIONS WERE FILED AND RELIANCE WAS PLACED ON VARIOUS CASE LAWS MENTIONED IN THE ORDER OF LD. CIT (A) AT PAGES 2 & 3. AFTER CONSIDERING THE SUBMISSIONS, THE LD. CIT (A) WAS SA TISFIED WITH THE CONTENTION OF THE ASSESSEE, ACCORDINGLY HE DELETED THE ADDITION. WHIL E DELETING THE ADDITION, THE LD. CIT (A) HAS RECORDED HIS FINDINGS IN PARA 5.3 AT PAGES 3 & 4 OF HIS ORDER. THE ABOVE FINDINGS NEITHER COULD BE CONTROVERTED NOR ANY OTHER MATERIA L WAS BROUGHT ON RECORD, THEREFORE, WE SEE NO REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT (A) WHICH ARE BASED ON THE 3 BASIS OF APPRECIATION OF FACTS AND ON THE BASIS OF JUDICIAL PRONOUNCEMENTS NOTICED BY THE LD. CIT (A). ACCORDINGLY WE CONFIRM THE ORDER OF L D. CIT (A). 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19. 8.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/ COPY FORWARDED TO :- THE ITO WARD 2(3), ALWAR. M/S. MAA SANTOSHI MARBLES PVT. LTD., BHIWADI. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 11/JP/2011) BY ORDER, AR ITAT JAIPUR.