ITO, Nagercoil V. Dr.M.George, Nagercoil

ITA 1237/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5000 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: TAPAS KUMAR DUTTA
• Assessee Lawyers: N DEVANATHAN
• Keywords: Opportunity of being heard; Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B ENCH D C HENNAI BEFORE SHRI HARI OM MARATHA, J.M. AND SHRI N.S. SAINI , AM .. I.T.A. NO. 1237 /MDS/2 0 1 0 ASSESSMENT YEAR S 200 7 - 0 8 THE INCOME - TAX OFFICER WARD I NAGERCOIL VS. DR. M. GEORGE GEORGE MISSION HOSPITAL EATHAMOZHI ROAD, KOTTAR NAGERCOIL (PAN NO. A JJPM 0638 E ) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N. DEVANATHAN DEPARTMENT BY : SHRI TAPAS KUMAR DUTTA O R D E R PER N.S. SAINI, A.M : - TH IS IS AN APPEAL FILED BY THE REVENUE , DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) - I , MADURAI DATED 25 . 05 .20 10 FOR ASSESSMENT YEAR 200 7 - 08. 2. THE REVENUE IN THIS APPEAL HAS TAKEN TWO EFFECTIVE GROUNDS OF APPEAL. THE FIST ISSUE INVOLVED IS THAT THE LD. CIT(A) ERRED IN ALLOWING PAGE 2 OF 5 I.T.A. NO. 1237 /MDS/2010 REBATE FOR PURCHASE OF MATERIALS/SELF SUPERVISION CHARGES OF RS. 12,37,793/ - . THE SECOND ISSUE INVOLVED IS THAT THE LD. CIT(A) ERRED IN GIVING CREDIT FOR AGRICULTURAL INCOME @ RS. 25,000/ - PER HECTARE AMOUNTING TO RS. 1,37,000/ - . 3. AT THE TIME OF HEARING, THE LD. D.R. SUBMITTED THAT DURING THE COURSE OF ASSESSMENT, DETAILS CALLED FOR BY THE ASSESSING OFFICER WERE NOT FUR NISHED BY THE ASSESSEE AND THEREFORE, THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER U/S 144 OF THE INCOME - TAX ACT, 1961 [IN SHORT, THE ACT]. THE LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE BUILDING IS A HOSPITAL AND CONSTANT SUPERV ISION OF DOCTOR IS REQUIRED SO THAT THE HOSPITAL WILL BE AS PE R THE REQUIRED SPECIFICATION. WHILE ACCEPTING THIS CONTENTION, THE LD. CIT(A) HAS NOT CARRIED OUT ANY VERIFICATION THAT THE ASSESSEE ACTUALLY SUPERVISED THE CONSTRUCTION OF THE HOSPITAL. HE PO INTED OUT FROM THE ASSESSMENT ORDER THAT IT WILL BE SEEN THAT THE ASSESSING OFFICER HAS OBSERVED THAT THE BUILDING IS CONSTRUCTED BY ONE SHRI A.N. ASHOK KUMAR , B.E [CIVIL], CONSULTANT ENGINEER AND THAT HE WAS PAID FEE FOR THE SAME AS PER LETTER DATED 7.3.2 008 GIVEN BY THE ENGINEER. THEREFORE, THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF THE ASSESSEE FOR REDUCTION FOR HIS SUPERVISION CHARGES. IN THE CIRCUMSTANCES, IT WAS PRAYED BY THE LD. PAGE 3 OF 5 I.T.A. NO. 1237 /MDS/2010 D.R. THAT THE ISSUE BE REMANDED BACK TO THE FILE OF THE ASSESSIN G OFFICER FOR PROPER VERIFICATION AND THEREAFTER ADJUDICATION OF THE ISSUE. 4. AS REGARDS THE AGRICULTURAL INCOME OF RS. 1,37,500/ - ALLOWED BY THE LD. CIT(A), IT WAS SUBMITTED BY THE LD. D.R. THAT IN THE RETURN OF INCOME, THE ASSESSEE HAD NOT SHOWN ANY AG RICULTURAL INCOME BUT DURING THE COURSE OF HEARING, VIDE LETTER DATED 16.12.2009, THE ASSESSEE PLEADED THAT AGRICULTURAL INCOME OF RS. 9 LAKHS FROM 32 ACRES OF LAND WAS TO BE CONSIDERED FOR ASSESSMENT. THE ASSESSEE DID NOT PRODUCE ANY ACCOUNT RECEIPTS FOR SALE OF AGRICULTURAL PRODUCE AND EVIDENCES FOR AGRICULTURAL EXPENSES. IN THESE CIRCUMSTANCES, THE ASSESSING OFFICER ESTIMATED AGRICULTURAL INCOME AT RS. 5 LAKHS AND TREATED THE BALANCE AMOUNT OF RS. 4 LAKHS AS NON AGRICULTURAL INCOME AND ADDED THE SAME T O THE INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) HAS HELD THAT THE ASSESSEE WAS EXPECTED TO WORK THROUGH LABOUR CONTRACTORS AND ALSO HAD TO PAY ANNUAL LEASE RENT. ACCORDINGLY, HE ESTIMATED AGRICULTURAL INCOME AT RS. 25,000/ - PER ACRE AS REASONABLE AND ARRIVED AT AGRICULTURAL INCOME OF RS. 7,48,400/ - ON 29.92 ACRES OF LAND HELD BY THE ASSESSEE AND THEREBY ALLOWED RELIEF OF RS. 2 , 5 0 ,000/ - TO THE ASSESSEE. THE LD. D.R. ARGUED THAT WHILE ESTIMATING INCOME AT RS. 25,000/ - THE LD. CIT(A) HAS NOT GIVEN A NY PAGE 4 OF 5 I.T.A. NO. 1237 /MDS/2010 BASIS. HE HAS NOT GIVEN ANY REASONS FOR ESTIMATING THE AGRICULTURAL INCOME AT RS. 7,48,400/ - IN PLACE OF RS. 5 LAKHS ESTIMATED BY THE ASSESSING OFFICER WHILE GRANTING RELIEF TO THE ASSESSEE. ACCORDINGLY , HE PRAYED THAT THIS ISSUE MAY ALSO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR PROPER VERIFICATION AND ADJUDICATION OF THE ISSUE AFRESH. 5. THE LD. D. R. DID NOT OBJECT TO THE ABOVE SUBMISSION OF THE LD. D.R. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, WE FIND THAT THE ASSESSMENT CAME TO BE FRAMED BY THE ASSESSING OFFICER U/S 144 OF THE ACT AS THE ASSESSEE DID NO T FILE RELEVANT MATERIAL AND DETAILS CALLED FOR BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, THE ASSESSING OFFICER DID NOT ALLOW ANY DEDUCTION FOR SELF SUPERVISION CHARGES TO THE ASSESSEE FOR CONSTRUCTION OF THE HOSPITAL BUILDING WHICH W AS ALLOWED BY THE LD. CIT(A) WITHOUT ANY VERIFICATION AND MATERIALS. FURTHER, TH E ASSESSEE CLAIMED AGRICULTURAL INCOME AT RS. 9 LAKHS WHICH WAS ACCEPTED AT RS. 5 LAKHS BY THE ASSESSING OFFICER IN THE ABSENCE OF ANY RECEIPTS FOR SALE OF AGRICULTUR AL PRODUCE AND BILLS FOR AGRICULTURAL EXPENSES. THE LD. CIT(A) ESTIMATED THE S A ME AT RS. 7,48,400/ - WITHOUT ANY BASIS AND MATERIAL. AS THE LD. D.R. PLEADED THAT PAGE 5 OF 5 I.T.A. NO. 1237 /MDS/2010 THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION O F THE ISSUES AFTER VERIFICATION OF THE MATERIALS AND DOCUMENTS TO BE FILED BY THE ASSESSEE WHICH T HE ASSESSEE WISHES TO RELY UPON. T HE LD. A. R. HAS NO OBJECTION TO THE SAME. W E , THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REMAND THE MATTE R BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION OF THE ISSUE AFTER PROPER VERIFICATION OF THE DOCUMENTS AND MATERIAL AS PER LAW. THE ASSESSEE IS DIRECTED TO FILE ALL RELEVANT MATERIAL AND DOCUMENTS AS AND WHEN CALLED UPON TO DO SO BY TH E ASSESSING OFFICER . NEEDLESS TO MENTION, ASSESSING OFFICER SHALL ALLOW REASONABLE AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, T HE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT IMMEDIATELY AFTER THE HEARING OF THE APPEAL ON 1.6.2011 . SD/ - SD/ - ((HARI OM MARATHA ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 01 ST JUNE , 201 1 . VL COPY TO: ASSESSEE / AO / CIT (A ) / CIT / D.R. / GUARD FILE