DCIT CEN CIR-1, THANE V. GURDASSINGH & SONS, ULHASNAGAR

ITA 1314/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1538 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 26-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GEETA J GUWALANI
• Keywords: Valuation report
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G: MUMBAI BEFORE SHRI D.MANMOHAN, HONBLE VICE PRESIDENT AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO.1314/MUM/2009 (ASSESSMENT YEAR 2006-07) DCIT CENTRAL CIRCLE 1, PAWAR INDL ESTATE, EDULJI ROAD, CHARAI, THANE 400 601 VS M/S GURDASSINGH & SONS, GOLDEN HOUSE, C-792, SECTION 17, TEKDI AREA, ULHASNAGAR -3 PAN AAAAG 5347 D (APPELLANT) (RESPONDENT) FOR APPELLANT : MR MOHD USMAN FOR RESPONDENT : MS GEETA J GUWALANI ORDER PER D.MANMOHAN, V.P. 1. ADDITION OF RS 85,88,860/- MADE BY THE ASSESSIN G OFFICER U/S 69 OF THE ACT HAVING BEEN DELETED BY THE LEARNED CI T (A), REVENUE IS IN APPEAL BEFORE US. 2. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE AS WELL AS LEARNED COUNSEL AND ALSO PERUSED THE RECORD . FACTS NECESSARY FOR THE DISPOSAL OF THE APPEAL ARE STATED IN BRIEF. SE ARCH AND SEIZURE OPERATION WAS CARRIED OUT IN THE PREMISES OF PANJWA NI GROUP OF ULHASNAGAR ON 23.02.2006 WHEREIN IT WAS NOTICED THA T GURDASSINGH & SONS, AOP, HAD CONSTRUCTED A RESIDENTIAL HOUSE, KNO WN AS GOLDEN HOUSE, AT ULHASNAGAR. CASE OF THE ASSESSEE WAS THAT THE S AID HOUSE WAS CONSTRUCTED DURING THE PERIOD 1994-1996 BY THE FAMI LY MEMBERS OF SHRI GURDASSINGH PANJWANI, ON CO-OWNERSHIP BASIS. ASSES SING OFFICER, HOWEVER, WAS OF THE VIEW THAT PART OF THIS SIX STOR EYED RESIDENTIAL HOUSE WAS CONSTRUCTED IN THE PREVIOUS YEAR RELEVANT TO TH E ASSESSMENT YEAR 2006-07 AND INVESTMENT MADE ON SUCH CONSTRUCTION WA S NOT DISCLOSED BY THE ASSESSEE, WHICH DESERVES TO BE ADDED U/S 69 OF THE ACT IN THE YEAR ITA 1314/M/2009 M/S GURDASSINGH & SONS 2 UNDER CONSIDERATION. DESPITE A DETAILED EXPLANATIO N IN THIS REGARD, THE ASSESSING OFFICER ADDED THE IMPUGNED SUM U/S 69 OF THE ACT. 3. ON AN APPEAL FILED BY THE ASSESSEE, LEARNED CIT (A) CONSIDERED THE ISSUE IN GREAT DETAIL TO CONCLUDE TH AT NO CASE WAS MADE OUT, IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, TO MAKE AN ADDITION OF RS 85,88,600/- IN ASSESSMENT YEAR 2006-07. OPERATI VE PORTION OF THE ORDER OF THE LEARNED CIT (A) IS REPRODUCED FOR IMME DIATE REFERENCE: 5.1 GROUND OF APPEAL NO 1, 2 & 3 THE MOST IMPORTANT ISSUE TO BE DECIDED IN THIS CA SE IS WHETHER ALL THE SIX FLOORS OF GOLDEN HOUSE WERE C ONSTRUCTED DURING THE PERIOD 1994-1996 OR 4 TH , 5 TH & 6 TH FLOORS WERE ADDED TO THE HOUSE DURING THE FY RELEVANT FOR ASSESSMENT YEAR 20 06-07. THE APPELLANTS CONTENTION IS THAT ALL THE SIX FLOORS O F GOLDEN HOUSE WERE CONSTRUCTED DURING THE PERIOD 1994-1996. THE ASSESSING OFFICERS CONTENTION, ON THE CONTRARY, IS THAT 4 TH , 5 TH & 6 TH FLOORS WERE CONSTRUCTED IN THE FY RELEVANT FOR ASSESSMENT YEAR 06-07 AND AS SUCH HE HAS TAKEN THE INVESTMENT MADE IN THE CONSTR UCTION OF 4 TH , 5 TH & 6 TH FLOORS AT RS 85,88,660/-, AS CONCEALED INCOME OF T HE APPELLANT FOR ASSESSMENT YEAR 06-07. 5.1.1 FROM THE PERUSAL OF THE DOCUMENTS FILED BY T HE APPELLANT, I FIND THAT THE GOLDEN HOUSE WAS CONSTRUCTED AT ROO M NO 3 TO 5 OF BLOCK NO 792, HILL AREA, ULHASNAGAR. THE BUILDING WAS CONSTRUCTED IN CLEAR VIOLATION OF THE APPROVED PLANT AND THE UL HASNAGAR MUNICIPAL CORPORATION (UMC) HAD POINTED OUT THIS VI OLATION AT SEVERAL OCCASIONS TO THE APPELLANT. THE UMC HAD AP PROVED THE PLANT OF THE GOLDEN HOUSE VIDE ITS LETTER DATED 1 8/04/95 BUT THE GOLDEN HOUSE WAS NOT CONSTRUCTED AS PER THE APPRO VED PLAN. THE MUNICIPAL AUTHORITIES HAD CATEGORIZED THE GOLDEN H OUSE WAS NOT CONSTRUCTED AS PER THE APPROVED PLAN. THE MUNICIPA L AUTHORITIES HAD CATEGORIZED THE GOLDEN HOUSE AS AS UNAUTHORI ZED CONSTRUCTION AND HAD FILED ITS DETAILS BEFORE THE HONBLE BOMBAY HIGH COURT IN REPLY TO A PUBLIC INTEREST LITIGATION (PIL) PENDING BEFORE IT. ON 15/09/95, UMC HAD ISSUED SIX NOTICES TO THE SIX OWNERS OF THE GOLDEN HOUSE AS THIS WAS CONSIDERED TO BE UNAUTHORIZED CONSTRUCTION. THE BEAT INSPECTORS O F UMC HAD INSPECTED THE CONSTRUCTION OF GOLDEN HOUSE AND HA D SUBMITTED THEIR REPORTS ON VARIOUS DATES IN THE YEAR 1994-199 6. I HAVE PERUSED COPY OF THESE REPORTS DATED 21/08/1995, 24/ 06/1996 AND 16/08/1996 SUBMITTED BY THE BEAT INSPECTORS. IN TH ESE REPORTS, THE BEAT INSPECTORS HAD CLEARLY MENTIONED THAT THE CONSTRUCTION OF THE GOLDEN HOUSE HAVING GROUND PLUS SIX FLOORS WA S UNDER PROGRESS. IN REPORTS DATED 24/06/1996 AND 16/08/19 96, THE BEAT INSPECTORS HAD CLEARLY MENTIONED THAT RCC CONSTRUC TION FOR GROUND ITA 1314/M/2009 M/S GURDASSINGH & SONS 3 PLUS SIX FLOORS WERE COMPLETED AND THE INTERNAL WOR K WAS IN PROGRESS. FURTHER, THE LIFT WAS INSTALLED IN THE GOLDEN HOUSE BY M/S EXCELISOR MOTOR & ELECTRIC MECHANIC WORKS, MUMB AI. THE INSTALLATION OF THE LIFT WAS COMPLETED ON 23/10/199 6. I HAVE PERUSED THE PAPERS / CORRESPONDENCE IN RESPECT OF T HE INSTALLATION OF THE LIFT IN GOLDEN HOUSE. THESE DOCUMENTS CLE ARLY ESTABLISH THAT THE LIFT WAS INSTALLED JUST AFTER THE COMPLETION OF THE GOLDEN HOUSE IN THE YEAR 1996. THE ASSESSING OFFICER HAD COLLEC TED INFORMATION FROM UMC AND ALSO FROM M/S EXCELSIOR MOTOR & ELECTR IC MECHANIC WORKS, MUMBAI. THE REPLY OF UMC VIDE ITS LETTER DA TED 14/12/2007 AND REPLY OF M/S EXCELSIOR MOTOR & ELECTRIC MECHANI C WORKS VIDE LETTER DATED 13/12/2007 CLEARLY REVEAL THAT THE GO LDEN HOUSE WAS CONSTRUCTED IN THE YEAR 1994-1996. THESE DOCUMENTS PROVED BEYOND DOUBT THAT THE CONSTRUCTION OF GROUND PLUS S IX FLOORS OF THE GOLDEN HOUSE WAS COMPLETED BY THE YEAR 1996. ON DIRECTION OF THE HONBLE BOMBAY HIGH COURT, THE UMC HAD FILED AN FIR ON 14/09/2007 WITH THE POLICE AGAINST THE CO-OWNERS OF THE GOLDEN HOUSE FOR OFFENCES COMMITTED U/S 52 & 53 OF MAHARA SHTRA REGIONAL TOWN PLANNING ACT, 1966. THE CONTENTS OF THE FIR A LSO REVEAL THAT THE GROUND PLUS SIX FLOORS OF GOLDEN HOUSE WERE C ONSTRUCTED IN 1996. 5.1.2 THE ASSESSING OFFICER HAD REFERRED THE GOLDE N HOUSE FOR VALUATION TO THE DEPARTMENTAL VALUER. THE VALUATIO N REPORT DATED 16/10/06 WAS SUBMITTED TO THE ASSESSING OFFICER. T HE ASSESSING OFFICER HAD ISSUED ONLY THE PORTION DEALING WITH TH E VALUATION OF THE BUILDING TO THE APPELLANT. THE COMPLETE VALUATION REPORT WAS NOT HANDED OVER TO THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS. AS PER THE VALUATION REPORT, THE CONSTRUCTION OF TH E GOLDEN HOUSE WAS COMPLETED BEFORE 01/04/1999. THE VALUER HAS CO MPUTED THE INVESTMENT IN THE HOUSE UPTO 01/04/1999 ONLY ON THE BASIS OF DOCUMENTARY EVIDENCES. THE ASSESSING OFFICER HAS T AKEN THE INDEXED COST OF INVESTMENT FOR FY 2005-06. 5.1.3 THE ASSESSING OFFICER HAS TAKEN THE YEAR OF C ONSTRUCTION OF 4 TH , 5 TH & 6 TH FLOORS AS FY 2005-06 ONLY ON THE BASIS OF INFORMAT ION COLLECTED FROM DY EXECUTIVE ENGINEER, MSEB IN RESPE CT OF INSTALLATION OF ELECTRIC METER FOR 4 TH TO 6 TH FLOORS. THE DY EXECUTIVE ENGINEER, MSEB INFORMED THE ASSESSING OFFICER THAT THE ELECTRIC METERS FOR 4 TH AND 5 TH FLOORS WERE INSTALLED IN THE YEAR 2005-06. ONLY THIS INFORMATION IS NOT SUFFICIENT TO CONCLUDE THAT THE 4 TH , 5 TH & 6 TH FLOORS WERE CONSTRUCTED DURING THE PREVIOUS YEAR R ELEVANT TO ASSESSMENT YEAR 2006-07. NO OTHER CORROBORATIVE EV IDENCES HAVE BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER. O N THE CONTRARY, ALL OTHER DOCUMENTARY EVIDENCES GO TO CONFIRM THAT THE CONSTRUCTION OF 4 TH , 5 TH & 6 TH FLOORS OF THE GOLDEN HOUSE WAS COMPLETED DURING THE PERIOD 1994-96. ITA 1314/M/2009 M/S GURDASSINGH & SONS 4 5.1.4 IN VIEW OF THE FACTS DISCUSSED ABOVE, I AM OF THE VIEW THAT THE ASSESSING OFFICERS ACTION OF TAKING THE PERIOD OF CONSTRUCTION OF 4 TH , 5 TH & 6 TH FLOORS AS FINANCIAL YEAR 2005-06 RELEVANT TO ASSES SMENT YEAR 2006-07 IS NOT SUPPORTED BY ANY DOCUMENTARY EV IDENCES. THE ADDITION OF RS 85,88,600/- MADE IN THE HANDS OF THE APPELLANT IN ASSESSMENT YEAR 2006-07 IS LEGALLY NOT MAINTAINABLE . THE ADDITION OF RS 85,88,600/- IS, THEREFORE, DELETED. THE GROU NDS OF APPEAL TAKEN BY THE APPELLANT ARE ALLOWED. 4. LEARNED DEPARTMENTAL REPRESENTATIVE LABOURED HA RD TO SUPPORT THE STAND OF THE ASSESSING OFFICER WHEREAS THE LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUPPORTED THE C ONCLUSIONS REACHED BY LEARNED CIT (A) BY REFERRING TO SEVERAL PAGES IN TH E PAPER BOOK WHICH LEND SUPPORT TO THE CONTENTION OF THE ASSESSEE THAT CONSTRUCTION HAD NOT TAKEN PLACE DURING THE PREVIOUS YEAR RELEVANT TO AS SESSMENT YEAR 2006-07 AND HENCE ADDITION MADE BY THE ASSESSING OFFICER U/ S 69 OF THE ACT IN THIS YEAR HAS NOT LEGS TO STAND. 5. IN OUR CONSIDERED OPINION, THE ORDER PASSED BY THE LEARNED CIT (A) DOES NOT CALL FOR ANY INTERFERENCE. NO MAT ERIAL WHATSOEVER WAS PLACED BEFORE US BY LEARNED DEPARTMENTAL REPRESENTA TIVE TO CONTRADICT THE FINDINGS OF THE LEARNED CIT (A). UNDER THESE C IRCUMSTANCES, WE UPHOLD THE ORDER OF THE LEARNED CIT (A) AND DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 04-06-2010. SD/- SD/- (RAJENDRA SINGH) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 4 TH JUNE, 2010 . COPY TO 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A)-I, THANE. 4. THE CIT (CENTRAL), THANE. 5. DR G BENCH 6. GUARD FILE. *CHAVAN BY ORDER / / TRUE COPY / / ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI ITA 1314/M/2009 M/S GURDASSINGH & SONS 5 SNO DATE INITIALS 1 DRAFT DICTATED ON 1-06-2010 SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR 1-06-2010 SR.P.S. 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER A.M. 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER A.M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER