ITO,Ward-43(4), Kolkata, Kolkata V. Yaswant Bafna, Kolkata

ITA 1108/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75085 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 26-07-2012
• Court: TRIBUNAL
• Department Lawyers: SUCHETA CHATTOPADHYAY
• Keywords: Unexplained investment; Depreciation; Fair market value; Valuation report

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1108/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, WD-43(4), KOLKATA VS. YASWANT BAFNA (PAN: ADDPB5141K) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 06.03.2014 DATE OF PRONOUNCEMENT: 13.03.2014 FOR THE APPELLANT: SMT. SUCHETA CHATTOPADHYAY, JCIT , SR. DR FOR THE RESPONDENT: SHRI SUBASH AGARWAL, ADVOCAT E $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XXX, KOLKATA IN APPEAL NO. 341/CIT(A)-XXX/WARD-43(4)/2009-10 DATED 23.03.2012. ASSESSMENT WAS FRAMED BY ITO, WARD-43(4) U/S.143(3) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DATED 30.12. 2009. 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION OF INTEREST INCOME. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1.THAT THE CIT(A)-XXX, KOLKATA HAS ERRED IN ALLOWI NG RELIEF OF INTEREST INCOME OF RS.52,960/-. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO MADE ADDITION OF RS.52,960/- ON ACCOUNT OF INTEREST RECEIVED FROM RAJIV BAFNA AS UNDISCLOSED INCOME. ACCORDING TO AO, AS P ER AIR INFORMATION, IT WAS FOUND THAT THE ASSESSEE HAS RECEIVED INTEREST FROM RAJIV BAFNA AMO UNTING TO RS.52,960/- BUT IT HAS NOT BEEN DISCLOSED. ACCORDINGLY, HE MADE ADDITION. AGGRIEV ED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS AND R ECONCILIATION DELETED THE ADDITION BY OBSDERVING IN PARA 2.2 AS UNDER: 2.2. THE SUBMISSIONS OF THE APPELLANT AND THE COPI ES OF INTEREST ACCOUNT OF THE APPELLANT ETC. HAVE BEEN CONSIDERED AND IT IS SEEN FROM THE S AME THAT THE INTEREST RECEIVED FROM M/S. VIKASH GEMS OF RS.52,960/- HAS BEEN CREDITED I N THE INTEREST ACCOUNT BUT NO FIGURE WAS TAKEN TO P&L A/C AS THE NET OF DEBIT & CREDIT W AS NIL. ALTHOUGH THE APPELLANT 2 ITA NO.1108/K/2012 YASWANT BAFNA , AY:2007-08 SHOULD HAVE IDEALLY CONSIDERED THE INTEREST RECEIVE D AND PAID SEPARATELY, HOWEVER, SINCE THE INTEREST RECEIVED HAS BEEN TAKEN IN THE INTERES T ACCOUNT, THE AO WAS NOT JUSTIFIED IN HOLDING THAT THIS AMOUNT HAS NOT BEEN DISCLOSED IN THE ACCOUNTS OF THE APPELLANT. THE ADDITION IS THEREFORE NOT JUSTIFIED AND THE SAME IS DELETED. THE ASSESSEE HAS FILED FOLLOWING RECONCILIATION: RECEIVED FROM: VIKASH GEMS 52,960.00 JAI NATURAL CREATION 29,540.00 82,500.00 LESS: PAID TO : PRITHVIRAJ BAFNA 40,000.00 MANAK BAFNA 42,500.00 82,500.00 NIL AND IT IS SEEN THAT THE ABOVE RECONCILIATION CLEARL Y REVEALED THAT THIS IS THE NET OF THE INTEREST AND AFTER NETTING THE REMAINING INTEREST IS DISCLOS ED, WHICH IS NIL. THIS INTEREST OF VIKASH GEMS IS OF RS.52,960/- PERTAINS TO SHRI RAJIV BAFNA, WHO IS PROPRIETOR OF THE CONCERN. ONCE THIS IS THE POSITION, THERE IS NO SCOPE OF ADDITION AND CIT(A) HAS DELETED THE SAME AND WE CONFIRM THE SAME. 4. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE ADDITION ON ACCOUNT OF VALUATION OF LAND AND BUILD ING. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.2: 2. THAT THE LD. CIT(A)-XXX, KOLKATA HAS ERRED IN A LLOWING RELIEF ON ACCOUNT OF VALUATION OF LAND AND BUILDING TO THE TUNE OF RS.16 ,62,002/-. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEE DINGS, ASSESSEE WAS REQUIRED TO FILE THE DETAILS OF IMMOVABLE PROPERTIES AND ALSO ADDITION O F ASSETS DURING THE YEAR. THE ASSESSEE HAS DECLARED THE VALUE OF ITS BUILDING AT BHASI FOR AN AMOUNT OF RS.18,64,463/- IN ITS BALANCE SHEET. THIS BUILDING IS AN OLD PROPERTY OF THE ASSESSEE AN D REGULARLY BEEN DISCLOSED IN THE BALANCE SHEET SINCE 2001, WHEN IT WAS ACQUIRED. THE AO FOU ND FROM A VALUALTION REPORT OBTAINED FOR MORTGAGE OF THIS PROPERTY TO UCO BANK, JAIPUR BRANC H, WHEREIN VALUATION OF PROERTY IS DISCLOSED AT RS.89.75 LACS. ACCORDING TO AO, THIS DIFFERENCE IS UNACCOUNTED INVESTMENT TOWARDS THIS PROPERTY AND HE MADE ADDITION OF THE D IFFERENCE OF RS.64,34,000/- THEREBY ALLOWING DEPRECIATION AND FURTHER REBATE AS UNDER: VALUATION OF LAND & BUILDING MADE BY THE REGD. VA LUER RS.89,75,000/- L. SAWANT AND ASSOCIATES ON 7 TH JULY, 2006 RS.25,41,000/- LESS VALUATION OF LAND AS INCREASED RS.64,34, 000/- LESS: INVESTMENT CLAIMED TO HAVE MADE BY THE ASSES SEE 3 ITA NO.1108/K/2012 YASWANT BAFNA , AY:2007-08 UPTO 31.03.2007 TOWARDS CONSTRUCTION OF BUILDING (SHOWN IN THE LIST OF ASSETS RS.18,64,463/- + DEPN . CLAIMED AND DEDUCTED) RS.21,67,603/- ADDITION MADE BY VALUER ON ACCOUNT OF ESCALATION OF PRICE RS.24,19,728/- RS.45,87,3 31/- RS.18,46,669/- LESS 10% AS CONSIDERED BY THE VALUER AGAINST REALIZABLE VALUE RS. 1,84,667/- DIFFERENCE BETWEEN THE VALUERS REPORT AND ASSESSEES CLAIM RS.16,62,002/- THE CIT(A) AFTER GOING THROUGH THE FACTS OBSERVED T HAT IT IS MERELY A VALUATION, THE ASSESSEE TO OBTAIN LOAN OR CASH CREDIT LIMIT HAS JUST PREPARED A VALUATION REPORT FROM REGISTERED VALUER AND THERE IS NO ADDITION OR INCREASE IN INVESTMENT IT I S THE SAME PROPERTY WHICH IS CARRIED FORWARD FROM YEAR TO YEAR IN THE BALANCE SHEET AND THIS CAN NOT BE INCOME AT ALL. ACCORDING TO CIT, THE DIFFERENCE BETWEEN THE REGISTERED VALUER VALUING TH E PROPERTY OF FAIR MARKET VALUE AND THE VALUE AS DECLARED IN THE BALANCE SHEET I.E. COST OF ACQUI SITION CANNOT BE THE SUBJECT MATTER OF INCOME, WHICH IS TO BE ASSESSABLE UNDER THE ACT. THE CIT(A ) DELETED THE ADDITION. WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE CIT(A) AND THIS IS SUE OF REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13.03.2 014. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH MARCH, 2014 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- ITO, WARD-43(4), KOLKATA. 2 ./,- / RESPONDENT SHRI YASWANT BAFNA, 13, NOORMAL LOHI A LANE, KOLKATA-700 007. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .