ITO, WD-2(2), Siliguri, Siliguri V. M/s Riverview Vanijya Private Ltd., Siliguri

ITA 1133/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9221 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Keywords: Unexplained cash credit; Unexplained investment; Additional evidence
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI ABY.T VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1133 / KOL / 2014 ASSESSMENT YEAR :2010-11 ITO WARD-2(2), AYAKAR BHAWAN, PARIBAHAN NAGAR, MATIGARA, SILIGURI, PIN-734 010 V/S . M/S RIVERVIEW VANIJYA PVT. LTD., NEELKAMAL PLAZA, GROUND FLOOR, HILL CART ROAD, SILIGURI-734 001 [ PAN NO.AADCR 0720 N ] /APPELLANT .. / RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE /DATE OF HEARING 30-01-2017 /DATE OF PRONOUNCEMENT 22-03-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), JALPAIGURI DA TED 26.03.2014. ASSESSMENT WAS FRAMED BY ITO WARD-2(2), SILIGURI U/ S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HIS ORDER DATED 28.03.2013 FOR ASSESSMENT YEAR 2010-11. 2. AT THE OUTSET IT WAS NOTICED THAT THE REVENUE HA S NEITHER APPEARED BEFORE US NOR MOVED ANY ADJOURNMENT PETITION. IN SU CH SITUATION, WE DECIDED TO PROCEED TO ADJUDICATE THE MATTER AFTER HEARING S HRI SUBASH AGARWAL, LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE. ITA NO.1133/KOL/2014 A.Y. 2010-11 ITO WD-2(2) SLG VS. M/S RIVERVIEW VANIJYA PVT. L TD. PAGE 2 3. FIRST ISSUE RAISED BY REVENUE IN GROUND NO. 1 AN D 2 ARE THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY ASSESSING OF FICER AFTER ADMITTING THE FRESH EVIDENCE IN CONTRAVENTION TO THE PROVISION OF RULE 46A(3) OF THE INCOME TAX RULE, 1962 (THE RULE FOR SHORT). 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PR IVATE LIMITED COMPANY AND ENGAGED IN BUSINESS OF REAL ESTATE / SALE OF FL ATS. DURING THE YEAR, ASSESSEE HAS RECEIVED SHARE CAPITAL OF 2.50 CRORES FROM EIGHT SUBSCRIBERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO VER IFIED THE SAID TRANSACTIONS BY ISSUING NOTICE U/S. 133(6) OF THE A CT TO THE SUBSCRIBERS OF THE SHARES. HOWEVER, OUT OF TOTAL EIGHT SUBSCRIBERS, ON LY THREE SUBSCRIBERS CONFIRMED THE TRANSACTIONS AND REMAINING FIVE SUBSC RIBERS FAILED TO FURNISH THE RESPONSE TO THE NOTICE ISSUED U/S. 133(6) OF THE AC T. THE NECESSARY DETAILS OF SAID FIVE SUBSCRIBERS WHO HAVE NOT FURNISHED THE RE PLY IN RESPONSE TO U/S. 133(6) OF THE ACT ARE AS UNDER:- 1 M/S NISHU LEASING AND FINANCE PVT. LTD. KOLKATA 75 ,00,000 2 M/S RAJESH FISCAL SERVICES PVT.LTD. KOLKATA 30,00 ,000 3 M/S ABHIRUCHI VISION PVT. LTD., KOLKATA 5,00,00 0 4 M/S SAI BABA FINVEST PVT.LTD. KOLKATA 15,00,000 5 M/S PCJ FINVEST PVT.LTD. KOLKATA 10,00,000 ACCORDINGLY, THE AO CALLED UPON THE ASSESSEE TO FUR NISH THE NECESSARY DETAILS IN SUPPORT OF THE AFORESAID TRANSACTIONS. THE ASSES SEE FAILED TO REPLY TO AO SATISFACTORILY. ACCORDINGLY, AO TREATED THE SHARE C APITAL AS DISCUSSED ABOVE AS UNEXPLAINED CASH CREDIT AND MADE THE ADDITION OF 1.35 CRORES AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT ALL THE D ETAILS OF THE SUBSCRIBERS OF SHARES HAVE BEEN FURNISHED WITH THE REGISTRAR OF CO MPANIES AND THESE SUBSCRIBERS HAVE SHOWN INVESTMENT IN THEIR INCOME T AX RETURNS. THE ASSESSEE ITA NO.1133/KOL/2014 A.Y. 2010-11 ITO WD-2(2) SLG VS. M/S RIVERVIEW VANIJYA PVT. L TD. PAGE 3 IN SUPPORT OF HIS CLAIM FILED THE COPIES OF THE SAM E TO THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSION OF ASSESSEE, LD. CIT(A) DELETED THE ADDITION MADE BY AO HAVING RELIANCE IN THE CASE OF DATAWARE PVT. LTD. VS. CIT IN GA NO. 2856 OF 2011 DATED 21.09.2011 WHEREBY THE HON'BLE JURISDICTIONA L HIGH COURT DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A), REVENU E IS IN APPEAL BEFORE US. 6. BEFORE US LD. AR FOR THE ASSESSEE RELIED ON THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD LD. AR OF THE ASSESSEE AND PERUSED AND CAREFULLY CONSIDERED THE MATERIALS ON RECORD INCLUDING THE JU DICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. THE ISSUE IN THE IN STANT CASE RELATES TO THE RELIEF GIVEN TO ASSESSEE BY LD. CIT(A) ON THE BASIS OF ADDITIONAL EVIDENCE WITHOUT GIVING THE OPPORTUNITY OF CROSS-EXAMINATION TO THE AO. AT THE OUTSET, WE FIND THAT THE LD.AR FAIRLY AGREED THAT THE RELIE F HAS BEEN GIVEN ON THE BASIS OF ADDITIONAL EVIDENCE WHICH WERE ADMITTED IN CONTR AVENTION TO THE PROVISION OF RULE 46A OF THE IT RULES. IN VIEW OF THE ABOVE, WE RESTORE THIS ISSUE TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW . HENCE, THIS GROUND OF REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE . 8. NEXT ISSUE RAISED BY REVENUE IN GROUND NO.3 IS T HAT LD. CIT(A) ERRED IN DISREGARDING THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER (DVO). 9. THE ASSESSEE, IN THE YEAR UNDER CONSIDERATION HA S SHOWN THE COST OF CONSTRUCTION OF ITS BUILDING AT 4,44,67,343/- WHEREAS THE DVO HAS VALUED THE SAME FOR 4,51,26,275/-. AS A RESULT THE AO OBSERVED A DIFFER ENCE OF 6,58,932/- IN THE COST OF CONSTRUCTION BETWEEN VALU E AS DECLARED BY ASSESSEE AND DVO. ON QUESTION BY THE AO FOR THE AFORESAID DI FFERENCE, THE ASSESSEE FAILED TO PROVIDE ANY SATISFACTORY REPLY. ACCORDING LY, AO OPINED THAT UNDISCLOSED INVESTMENT OF 6,58,932/- HAS BEEN MADE IN COST OF CONSTRUCTION WHICH WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF ASSESSEE. ITA NO.1133/KOL/2014 A.Y. 2010-11 ITO WD-2(2) SLG VS. M/S RIVERVIEW VANIJYA PVT. L TD. PAGE 4 10. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). BEFORE LD. CIT(A) ASSESSEE SUBMITTED THAT VALUATION MADE BY DV O IS ONLY ON ESTIMATE BASIS AND CANNOT BE CONSIDERED AS UNEXPLAINED INVES TMENT IN THE COST OF THE CONSTRUCTION OF BUILDING. ACCORDINGLY AFTER CONSIDE RING THE SUBMISSION OF THE ASSESSEE, THE LD. CIT(A) DELETE THE ADDITION MADE B Y AO. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. 11. LD. AR BEFORE US RELIED ON THE ORDER OF LD. CIT (A). 12. WE HAVE HEARD LD. AR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE DIFFERENCE BETWEEN THE VALU ATION ADOPTED BY THE STAMP VALUATION AUTHORITY AND VALUE DECLARED BY THE ASSES SEE IS LESS THAN 10%. IN SUCH CIRCUMSTANCES WE FIND THAT THE CO-ORDINATE BEN CH OF PUNE TRIBUNAL IN ITA NO. 1543/PN/2007 IN THE CASE OF RAHUL CONSTRUCTION VS. DCIT (2010) 38 DTR (PUNE TRIB.) HAS HELD AS UNDER:- WE FIND THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ASST. CIT VS. HARPEET HOTELS (P) LT. VIDE ITA NO.S 1156-1160/ PN/2000 AND RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE HAD DISM ISSED THE APPEAL FILED BY THE REVENUE WHERE THE CIT(A) HAD DELETED T HE UNEXPLAINED INVESTMENT IN HOUSE CONSTRUCTION ON THE GROUND THAT THE DIFFERENCE BETWEEN THE FIGURE SHOWN BY THE ASSESSEE AND THE FI GURE OF THE DVO IS HARDLY 10 PER CENT. SIMILARLY, WE FIND THAT THE PUN E BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. KAADDU JAYGHOSH AP PASAHEB, VIDE ITA NO. 441/PN/2004 FOR THE ASST. YR. 1992-93 AND RELIE D ON BY THE LEARNED COUNSEL FOR THE ASSESSEE FOLLOWING THE DECISION OF THE J&K HIGH COURT IN THE CASE OF HONEST GROUP OF HOTELS (P) LTD., VS. C IT (2002) 177 CTR (J&K) 232 HAD HELD THAT WHEN THE MARGIN BETWEEN THE VALUE AS GIVEN BY THE ASSESSEE AND THE DEPARTMENTAL VALUER WAS LESS T HAN 10 PER CENT, THE DIFFERENCE IS LIABLE TO BE IGNORED AND THE ADDI TION MADE BY THE AO CANNOT BE SUSTAINED. SINCE IN THE INSTANT CASE SUCH DIFFERENCE IS LESS T HAN 10 PER CENT AND CONSIDERING THE FACT THAT VALUATION IS ALWAYS A MAT TER OF ESTIMATION WHERE SOME DEGREE OF DIFFERENCE IS BOUND TO OCCUR, WE ARE OF THE CONSIDERED OPINION THAT THE AO IN THE INSTANT CASE IS NOT JUSTIFIED IN SUBSTITUTING THE SALE CONSIDERATION AT RS.20,55,000 /- AS AGAINST THE ACTUAL SALE CONSIDERATION OF RS.19,00,000 DISCLOSED BY THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AN D DIRECT THE AO TO TAKE RS.19,00,000/- ONLY AS THE SALE CONSIDERATION OF THE PROPERTY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLO WED. ITA NO.1133/KOL/2014 A.Y. 2010-11 ITO WD-2(2) SLG VS. M/S RIVERVIEW VANIJYA PVT. L TD. PAGE 5 IN THE INSTANT CASE, THE DIFFERENCE BETWEEN THE VAL UATION ADOPTED BY THE STAMP VALUATION AUTHORITY AND DECLARED BY THE ASSES SEE IS LESS THAN 10%. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE COORDINATE BENCH, WE HEREBY DIRECT THE AO TO ADOPT THE VALUE AS DECLARED BY THE ASSESSEE. THIS GROUND OF THE ASSESS EE IS ALLOWED. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF T HE HON'BLE COORDINATE BENCH, WE HEREBY DIRECT THE AO TO ADOPT THE VALUE AS DECLA RED BY THE ASSESSEE. ACCORDINGLY, WE UPHOLD THE ORDER OF LD. CIT(A). THI S GROUND OF REVENUES APPEAL IS DISMISSED. 13. IN THE RESULT, REVENUES APPEAL STANDS PARTLY ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 22/ 03/2017 SD/- SD/- (ABY. T. VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 22 / 03 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-2(2), AAYAKAR BHAWAN, PARIBAHAN NAGAR, MATIGARA, SILIGURI, PIN N O. 734 010 2. /RESPONDENT-M/S RIVERVIEW VANIJYA PVT. LTD., NEELKA MAL PLAZA, GROUND FLOOR, HILL CART ROAD, SILIGURI-734001 3. ) *+ , , - / CONCERNED CIT JALPAIGURI 4. , , -- / CIT (A) JALPAIGURI 5. 012 33*+, , *+ , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ , , /TRUE COPY/ / , *+ ,