M/s Royal Garden, Una V. ITO, Una

ITA 1192/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8358 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 17-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R.R.THAKUR
• Keywords: Opportunity of being heard; Valuation report; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 1192 & 1330/CHD/2016 A.Y: 2008-09 AND 2009-10 M/S ROYAL GARDEN, NICHLA TAHLIWAL, VS THE IT O, TEHSIL & DISTRICT UNA, UNA. (H.P.). (H.P.) PAN: AAJFR7591L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.R.THAKUR RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 31.01.2017 DATE OF PRONOUNCEMENT : 31.01.2017 O R D E R BOTH APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS) PALAMP UR DATED 24.08.2016 FOR ASSESSMENT YEAR 2008-09 AND DATED 05.09.2016 FOR ASSESSMENT YEAR 2009-10. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE FINDINGS OF AUTHORITIES BELOW. 3. IN ASSESSMENT YEAR 2008-09, LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO. 4 OF THE APPEAL O F THE ASSESSEE CHALLENGING THE RE-OPENING OF THE ASSESSME NT. THE SAME IS DISMISSED AS NOT PRESSED. 2 4. GROUND NOS. 1 AND 5 ARE GENERAL IN NATURE AND NE ED NO ADJUDICATION. 5. ON GROUND NOS. 2 AND 3, ASSESSEE CHALLENGED THE ADDITION OF RS. 24,49,982/- ON THE BASIS OF VALUATI ON OFFICERS ESTIMATION OF COST OF CONSTRUCTION. IT I S NOTED IN THE IMPUGNED ORDER THAT ASSESSEE WAS INTIMATED THAT VALUATION OFFICER, PATIALA HAS ESTIMATED THE COST O F CONSTRUCTION OF HOTEL BUILDING AT RS. 86,44,900/- A S AGAINST RS. 61,94,918/- DECLARED BY THE ASSESSEE FO R THE PERIOD UNDER CONSIDERATION. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE DIFFERENCE OF RS. 24,49,982/- ( RS. 86,44,900/- - RS. 61,94,918/-) MAY NOT BE ADDED IN HIS TAXABLE INCOME. THE LD. COUNSEL FOR THE ASSESSEE H AS SUBMITTED THAT THE VALUATION OF BUILDING HAS BEEN ESTIMATED BY THE VALUATION OFFICER WHEREAS ASSESSEE HAS FILED HIS VALUATION REPORT. SINCE IT IS ESTIMATED ADDITION, THEREFORE, NO FURTHER ADDITION SHOULD BE MADE. IT IS NOTED THAT ASSESSEE HAS NOT POINTED OUT ANY FLAW IN THE M ETHOD OF VALUATION OR ESTIMATION MADE BY THE VALUATION OFFIC ER THEREFORE, ADDITION OF THE AFORESAID AMOUNT WAS MAD E WHICH HAVE BEEN CONFIRMED BY THE LD. CIT(APPEALS). 6. IN ASSESSMENT YEAR 2009-10, GROUND NOS. 1 AND 4 ARE GENERAL IN NATURE AND NEED NO ADJUDICATION. ON GRO UND NOS. 2 AND 3, ASSESSEE SIMILARLY CHALLENGED THE ADD ITION OF RS. 6,03,287/- ON THE BASIS OF VALUATION OFFICERS ESTIMATE OF COST OF CONSTRUCTION ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION REPORTED BY VALUATION OFFICER AND ASSE SSEE. 3 7. THE LD. CIT(APPEALS) CONFIRMED BOTH THE ADDITION S AND DISMISSED APPEAL OF THE ASSESSEE. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT PWD RATES OF HIMACHAL PRADESH MAY BE APPLIED AND RELIED UPON ORDER OF ITAT SMC BENCH IN THE CASE OF SHRI NIRAT RAM VS ITO ITA NO. 897/CHD/2016 DATED 26.09.2016. COPY OF THE ORDER IS PLACED ON RECORD. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF AUTHORITIES BELOW. 9. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW THE MATTER REQUIRES RE-CONSIDERATION IN THE LIGHT O F ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF SHRI NIRAT RAM (SUPRA) IN WHICH IN PARA NO. 4 AND 5, IT IS HELD AS UNDER : 4. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW THAT MATTER REQUIRES RE-CONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT PWD RATES OF HIMACHAL PRADESH MAY BE APPLIED AS WAS ARGUED BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF AUTHORITIES BELOW. THE ASSESSEE SPECIFICALLY PLEADED BEFORE LD. CIT(APPEALS) THAT HE HAS GOT THE VALUATION OF THE CONSTRUCTED PORTION FROM APPROVED VALUER WHICH HAS NOT BEEN ADVERSELY COMMENTED BY THE AUTHORITIES BELOW. THE ASSESSEE ALSO PLEADED BEFORE LD. CIT(APPEALS) THAT DVO HAS APPLIED ALL INDIA RATE OF CONSTRUCTION APPLICABLE TO METRO CITIES. HE HAS ALSO PLEADED THAT IN HIMACHAL PRADESH, PWD HAS FIXED LOWER RATE OF CONSTRUCTION BECAUSE OF THE BUILDING MATERIAL AVAILABLE AT LOWER RATES AS COMPARED TO THE METRO CITIES. THESE SUBMISSIONS 4 OF THE ASSESSEE HAVE NOT BEEN REBUTTED BY THE LD. CIT(APPEALS) IN ANY MANNER. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT VALUATION REPORT SUBMITTED BY ASSESSEE WAS BASED ON PWD RATES. IN THE CASE OF CIT VS RAJ KUMAR, HON'BLE ALLAHABAD HIGH COURT IN 182 ITR 436 CONSIDERING THE ORDER PASSED BY THE TRIBUNAL FOUND THAT THE TRIBUNAL WHILE FIXING THE COST OF CONSTRUCTION HAS TAKEN INTO CONSIDERATION THE RATES TO BE APPLIED FOR ESTIMATE OF COST OF CONSTRUCTION SHOULD BE UP, PWD RATES AND NOT THE CENTRAL PWD RATES. THEREFORE, REFERENCE WAS REJECTED. 5. IN THE PRESENT CASE, THE ASSESSEE PLEADED THAT IN HIMACHAL PRADESH, PWD HAS FIXED LOWER RATES OF CONSTRUCTION, THEREFORE, THESE WERE RELEVANT TO BE CONSIDERED BY THE AUTHORITIES BELOW. I, THEREFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE MATTER IN ISSUE I.E. ESTIMATE OF COST OF CONSTRUCTION, TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE ESTIMATING THE COST OF CONSTRUCTION AS PER PWD RATES FIXED IN HIMACHAL PRADESH. THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. NO OTHER POINT IS ARGUED BY LD. COUNSEL FOR THE ASSESSEE. THE APPEAL OF THE ASSESSEE IS, THEREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE ABOVE CASE, THE ASSESSEE PLEADED THAT IN HIMACHAL PRADESH, PWD HAS FIXED LOWER RATES OF CONSTRUCTION THEREFORE, THESE WERE RELEVANT TO BE CONSIDERED BY THE AUTHORITIES BELOW. THE MATTER WA S, THEREFORE, RESTORED TO THE FILE OF ASSESSING OFFICE R TO RE- DECIDE THIS ISSUE FOR ESTIMATING THE COST OF CONSTR UCTION AS PER PWD RATES FIXED IN HIMACHAL PRADESH. FOLLOWIN G THE 5 ORDER IN THE CASE OF SHRI NIRAT RAM (SUPRA), I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE MATTER IN ISSUE I.E. ESTIMATE OF COST OF CONSTRUCTION TO THE FILE O F ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THE ISSUES ESTI MATING THE COST OF CONSTRUCTION AS PER PWD RATES FIXED IN HIMA CHAL PRADESH. THE ASSESSING OFFICER SHALL GIVE REASONAB LE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. NO OTHER POINT IS ARGUED BY LD. COUNSEL FOR THE ASSESS EE. BOTH THE APPEALS OF THE ASSESSEE ON THESE GROUNDS ARE AL LOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 31 ST JANUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH