Shri Gopichand B.Lalwani (HUF), Kolhapur V. DCIT, Kolhapur

ITA 1156/PUN/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1107 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-08-2016
• Assessment Year: misc
• Appeal Filed On: 01-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Search and seizure; Valuation report
• Section: 143(3); 153A; 234B; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO. 1156 /PN/20 1 2 / ASSESSMENT YEAR : 20 0 3 - 04 SHRI GOPICHAND B. LALWANI (HUF), 250 - B TRIMURTI, E - WARD, NAGALA PARK, KOLHAPUR. . / APPELLANT PAN: A AAHL2216B VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT / APPELLANT BY : S HRI M.K. KULKARNI / RESPONDENT BY : S HRI S.K. RASTOGI, CIT / DATE OF HEARING : 02 . 0 8 .201 6 / DATE OF PRONOUNCEMEN T: 12 . 0 8 .201 6 / ORDER / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF C I T (A) , KOLHAPUR , DATED 15 . 0 3 .20 1 2 RELATING TO ASSESSMENT YEAR 20 0 3 - 04 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 153A(B) OF THE INC OME TAX ACT, 19 61 (IN SHORT THE ACT) . ACT) . ITA NO . 1156 /PN/20 1 2 SHRI GOPICHAND B. LALWANI (HUF) 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 ) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C I T(A) WAS 1 ) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C I T(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE A.O. OF RS.13,27,197/ - ON A CCOUNT OF DIFFERENCE BETWEEN THE PURCHASE VALUE OF THE PROPERTY AT AYODHYA PARK, KOLHAPUR RECORDED IN THE BOOKS OF ACCOUNT ON THE BASIS OF REGISTERED SALE DEED AND THE VALUATION DONE BY DVO. THE PROVISIONS OF S. 69 OF THE ACT WERE NOT APPLICABLE TO THE FAC TS OF THE CASE. THE CASE LAW RELIED UPON BY LD. C I T(A) PERTAINS TO ONLY APPLICABILITY OF S. 142A OF THE ACT AND REFERENCE MADE THEREUNDER. 2 ) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND IN ABSENCE OF ANY EVIDENCE AVAILABLE OR SEIZED DURING SE ARCH ACTION CONDUCTED UNDER S. 132(1) OF THE ACT INDICATING ANY EXCESS VALUE PAID FOR THE PURCHASE OF THE PROPERTY OVER AND ABOVE INDICATED IN REGISTERED SALE DEED NO INFERENCE OF ANY UNDISCLOSED INVESTMENT CAN BE DRAWN. THE ADDITION OF RS.13,27,197/ - BEIN G CONTRARY TO THE PROVISIONS OF LAW CONTAINED IN S. 69 RS.13,27,197/ - BEIN G CONTRARY TO THE PROVISIONS OF LAW CONTAINED IN S. 69 AND SIMPLY BASED ON ESTIMATED VALUATION AND CONFIRMED BY LD. C I T(A) BE QUASHED. 3 ) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEVY OF INTEREST U/S 234A AND 234B IS NOT JUSTIFIED AND IN TH E CIRCUMSTANCES IT BE DELETED. 3. THE ONLY ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.13,27,197/ - ON ACCOUNT OF DIFFERENCE BETWEEN THE PURCHASE VALUE OF PROPERTY AND THE VALUATION DONE BY THE BETWEEN THE PURCHASE VALUE OF PROPERTY AND THE VALUATION DONE BY THE DEPA RTMENTAL VALUATION OFFICER (DVO). 4. BRIEFLY, IN THE FACTS OF THE CASE, THE GROUP CASES OF THE ASSESSEE WERE UNDER SEARCH AND SEIZURE OPERATION FROM 18.04.2007 TO 20.04.2007, WHICH WAS COMPLETED UNDER SECTION 132 OF THE ACT. SEVERAL RESIDENTIAL PREMISES OF ASSESSEE GROUP WERE SEARCHED AND 29 PERSONS IN ALL WERE SEARCHED IN SEARCH ASSESSEE GROUP WERE SEARCHED AND 29 PERSONS IN ALL WERE SEARCHED IN SEARCH OPERATION AND CASH & JEWELLERY WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH, WHICH IS MENTIONED UNDER PARA 2 OF THE ASSESSMENT ORDER. CONSEQUENT THERETO, THE ASSESSING OFFIC ER HAVING JURISDICTION OVER THE ASSESSEE ISSUED NOTICE UNDER SECTION 153A OF THE ACT ASKING THE ASSESSEE TO FURNISH RETURN OF INCOME WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF NOTICE. IN RESPONSE THERETO, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTA L INCOME OF RESPONSE THERETO, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTA L INCOME OF RS.7,58,450/ - . THE CASE OF ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ITA NO . 1156 /PN/20 1 2 SHRI GOPICHAND B. LALWANI (HUF) 3 ASSESSING OFFICER NOTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD ACQUIRED SHOP NO.20, 21, 2113/K, 2104/14, AYODHYA PARK, OLD P B ROAD, KOLHAPUR MEASURING TO TAL AREA OF 114.77 SQ,MTRS. FOR TOTAL CONSIDERATION OF RS.18,52,503/ - ON 31.12.2002. THE ASSESSING OFFICER REFERRED THE ISSUE OF INVESTMENT IN THE SAID PROPERTY UNDER SECTION 142A OF THE ACT TO THE DEPARTMENTAL VALUATION OFFICER (DVO) TO DETERMINE THE COS T OF PROPERTY IN THE HANDS OF ASSESSEE AS ON THE DATE OF ACQUISITION. VIDE VALUATION REPORT DATED 29.09.2009, THE DVO ESTIMATED THE COST OF PROPERTY AT RS. 31,79,700/ - . THE ASSESSEE WAS GIVEN THE COPY OF VALUATION REPORT, TO WHICH THE ASSESSEE OBJECTED AN D POINTED OUT THAT WHERE THE DIFFERENCE BETWEEN INVESTMENT SHOWN BY THE ASSESSEE AND VALUE DETERMINED BY THE DVO WAS LESS THAN 15%, THEN NO ADDITION IS TO BE MADE. THE ASSESSING OFFICER NOTED THAT DIFFERENCE WAS 41.74% AND WHICH WAS MORE THAN 15% AND AS S UCH, THE DIFFERENCE WAS ADDED AS INCOME OF THE ASSESSEE AT RS. 13,27,197/ - . 5. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER, AGAINST WHICH THE ASSESSEE IS IN APPEAL. 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESS EE HAD MADE INVESTMENT IN THE AFORESAID ASSET DURING THE YEAR BY WAY OF REGISTERED DOCUMENT. HE FURTHER STATED THAT WHERE NO OTHER EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH, THERE WAS NO BASIS FOR MAKING REFERENCE TO THE DVO. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ALSO POINTED OUT THAT SINCE THE ASSESSEE HUF WAS PARTNER IN THE PARTNERSHIP FIRM AND THE BUSINESS OF FIRM HAD NOT STARTED, THE ADDITION WAS MADE IN THE HANDS OF PARTNER. ITA NO . 1156 /PN/20 1 2 SHRI GOPICHAND B. LALWANI (HUF) 4 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE BEFORE US DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD ACQUIRED AN IMM OVABLE PROPERTY AT KOLHAPUR FOR SUM OF RS. 18,52,503/ - BY WAY OF REGISTERED DOCUMENT DATED 31.12.2002 . SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AT THE PREMISES OF ASSESSEE AND PURSUANT TO NOTICE UNDER SECTION 153A OF THE ACT, THE ASSESSEE HAD FURNISH ED RETURN OF INCOME AND THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS REFERR ED THE VALUATION OF THE SAID INVESTMENT MADE BY THE ASSESSEE ON 31.12.2002 I.E. FALLING WITHIN FINANCIAL YEAR, FOR VA LUATION TO THE DVO, WHO IN TURN, ESTIMATED THE COST OF PROPERTY AT RS. 31,79,700/ - . THE DIFFERENCE IN VALUATION AS ESTIMATED BY THE DVO AND THE COST OF PROPERTY WORKED OUT TO RS. 13,27,197/ - , WHICH WAS AT ABOUT 41.74% AND THE SAME WAS ADDED AS ADDITIONAL IN COME UNDER SECTION 69B OF THE ACT. THE ASSESSEE OBJECTED TO THE REFERENCE OF VALUATION REPORT OF DVO POINTING OUT THAT THE INVESTMENT WAS BY WAY OF REGISTERED DOCUMENT WHICH CANNOT BE DISPUTED. A COPY OF REGISTERED DOCUMENT IS PLACED ON RECORD. THE ISSU E WHICH ARISES IS WHETHER THE AFORESAID ADDITION IS MAINTAINABLE IN THE HANDS OF ASSESSEE IN THE ABSENCE OF ANY EVIDENCE FOUND DURING THE COURSE OF SEARCH. IN THE ABSENCE OF ANY EVIDENCE FOUND POINTING OUT THAT THE INVESTMENT MADE BY ASSESSEE IN PURCHASE OF PROPERTY IS HIGHER THAN THE VALUE DECLARED BY WAY OF REGISTERED DOCUMENT, THERE IS NO MERIT IN MAKING ANY REFERENCE TO THE DVO IN THIS REGARD AND ESTIMATING THE COST OF PROPERTY AS ON THE DATE OF PURCHASE. ACCORDINGLY, REVERSING THE ORDER S OF AUTHORITI ES BELOW IN THIS REGARD , WE DIRECT ITA NO . 1156 /PN/20 1 2 SHRI GOPICHAND B. LALWANI (HUF) 5 THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 13,27,197/ - . THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 12 TH DAY OF AUGUST , 201 6 . SD/ - SD/ - ( R.K. PANDA ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 12 TH AUGUS T , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE C I T (A), KOLHAPUR ; 3. ( ) / THE C I T (A), KOLHAPUR ; 4. / THE C I T - I / II, KOLHAPUR / CIT (CENTRAL), PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE