Ramchand K Kukreja, V. Dy.CIT, Cen.Cir. Kolhapur,

ITA 1458/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3336 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 11-11-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, B PUNE BEFORE SHRI I.C. SUDHIR, JM AND SHRI D. KARUNAKAR A RAO, AM I.T.A. NO. 1458 TO 1460/PN/2008 A.Y. 2004-05 TO 2006-07 RAMCHAND K KUKREJA BARRACK NO. 133, ROOM NO. 29 GANDHINAGAR, KOLHAPUR PAN AAYPK 1086 B APPELLANT VS. DY. CIT CENT. CIR. KOLHAPUR RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI RESPONDENT BY: SHRI SANTOSH KUMAR ORDER PER I.C. SUDHIR, JM IN ALL THESE APPEALS, THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON SEVERAL GROUNDS INVOLVING THE SO LE ISSUE AS TO WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN SUST AINING THE ADDITION IN RESPECT OF INVESTMENT IN CONSTRUCTION O F HOUSE PROPERTY ON THE BASIS OF DEPARTMENTAL VALUATION REP ORT. 2. AT THE OUTSET OF HEARING, THE LEARNED AR POINTED OUT THAT THE DIFFERENCE BETWEEN THE COST OF CONSTRUCTION SHO WN BY THE ASSESSEE AND AFTER GIVING EFFECT TO FIRST APPELLATE ORDER IN THIS REGARD, IS ONLY 15.5%, HENCE AS PER THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSTT. CIT (INV) CIR. 3(1) AURANGABAD VS. HERPREET HOTELS PVT. LTD. IN ITA NO. 1156 TO ITA NO.1458 TO 1460/PN/2008 RAMCHAND KUKREJA A.Y. 2004-05 TO 2006-07 , 2 1160/PN/2000 FOR A.Y. 1989-90, 1989-90, 1990-91, 19 91-92 AND 1991-93) THE ADDITION ON ACCOUNT OF COST OF CON STRUCTION WAS NOT REQUIRED TO BE SUSTAINED. THE LEARNED AR S UBMITTED THAT IF OBJECTION RAISED BY THE ASSESSEE AGAINST TH E DEPARTMENTAL VALUATION REPORT WOULD HAVE BEEN ACCEP TED BY THE LOWER AUTHORITIES THERE WOULD NOT HAVE BEEN ANY DIFFERENCE BETWEEN THE COST SHOWN BY THE ASSESSEE AND ESTIMATE D BY THE D.V.O. THE LEARNED AR SUBMITTED THAT THE DVO HAS A DOPTED CPWD RATE INSTEAD OF PWD RATE WHILE ESTIMATING THE COST AND HAS GIVEN DEDUCTION OF 7.5% ONLY ON ACCOUNT OF SELF SUPERVISION. THE CIT(A) HAS ALSO ERRED IN ALLOWING DEDUCTION ON ACCOUNT OF CONTRACTORS PROFIT FROM COST OF CONS TRUCTION AS PER VALUATION REPORT OF DVO AT THE RATE OF 10% ONLY AS AGAINST 15% CLAIMED BY THE ASSESSEE. THE LEARNED CIT(A) HA S ERRED FURTHER IN NOT ALLOWING ANY DEDUCTION ON ACCOUNT OF LOCAL ADJUSTMENT OF RATES FROM EXTRA ITEMS CONSIDERED IN VALUATION REPORT BY THE D.V.O. THE LOWER AUTHORITIES HAVE AL SO ERRED IN NOT CONSIDERING THE COST OF FURNITURE OF RS. 75,809 /- SHOWN SEPARATELY IN THE BALANCE SHEET BY THE ASSESSEE WHI LE WORKING OUT THE DIFFERENCE IN COST OF CONSTRUCTION SHOWN BY THE ASSESSEE AND THAT ESTIMATED BY THE D.V.O. THE LEAR NED CIT(A) HAS ERRED IN ALLOWING DEDUCTION ON ACCOUNT OF LOCAL ADJUSTMENT RATE AT 15% ON BASIC COST OF CONSTRUCTIO N EXCLUDING COST OF EXTRA ITEMS ESTIMATED BY THE D.V. O AS ITA NO.1458 TO 1460/PN/2008 RAMCHAND KUKREJA A.Y. 2004-05 TO 2006-07 , 3 AGAINST 30% CLAIMED BY THE ASSESSEE ON TOTAL COST E STIMATED BY THE D.V.O. 3. THE LEARNED DR ON THE OTHER HAND, SUBMITTED THAT SUFFICIENT RELIEF HAS ALREADY BEEN GIVEN BY THE LEA RNED CIT(A) AFTER CONSIDERING THE ABOVE CONTENTION. THUS THERE IS NO GRIEVANCE WITH THE ASSESSEE IN ABSENCE OF IMPROVEME NT OF ITS CASE BEFORE THE TRIBUNAL. 4. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT THE LEARNED CIT(A) HAS ALREADY ACCEPTED THE ABOVE CONTE NTION TO THE EXTENT TO WHICH HE WAS SATISFIED WITH. ON ACCO UNT OF APPLICATION OF CWPD RATE BY THE DVO IN ESTIMATING T HE COST INSTEAD OF LOCAL PWD RATE, THE LEARNED CIT(A) HAS A DJUSTED THE COST OF 15% AGAINST 20% CLAIMED BY THE ASSESSEE. I N THIS REGARD, THE LEARNED CIT(A) HAS FOLLOWED THE DECISIO N OF PUNE BENCH OF THE TRIBUNAL (VIDE PARA 10 OF THE FIRST AP PELLATE ORDER) WHEREIN THE PROPERTY WAS SITUATED IN AURANGABAD, TH E TRIBUNAL HAS GIVEN ADJUSTMENT UPTO 15% IN RATE IN T HE LOCAL AREA. THE LEARNED CIT(A) HAS HELD THAT THE PROPERT Y OF THE PRESENT ASSESSEE IS SITUATED IN KOLHAPUR WHICH IS M ORE OR LESS OF SIMILAR SIZE AND QUALITY. THE LEARNED CIT(A) HA S ALSO ALLOWED 10% OF THE COST ON ACCOUNT OF SELF SUPERVIS ION. THE OTHER OBJECTIONS RAISED BY THE ASSESSEE HAVE ALSO B EEN CONSIDERED BY THE LEARNED CIT(A). AS REGARDS THE C OST OF ITA NO.1458 TO 1460/PN/2008 RAMCHAND KUKREJA A.Y. 2004-05 TO 2006-07 , 4 FURNITURE SHOWN SEPARATELY IN THE BALANCE SHEET ETC . IS CONCERNED SINCE THERE IS NO IMPROVEMENT IN THE CASE OF THE ASSESSEE BEFORE THE TRIBUNAL, WE ARE NOT INCLINED T O INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A) IN THIS REG ARD. THE SAME IS UPHELD. WE HOWEVER, FIND THAT WHILE ALLOWI NG 15% ADJUSTMENT ON ACCOUNT OF APPLICATION OF CWPD RATE I NSTEAD OF LOCAL PWD RATE IN PARA 10 OF THE FIRST APPELLATE OR DER, THE LEARNED CIT(A) HAS FOLLOWED THE DECISION OF PUNE BE NCH OF THE TRIBUNAL IN THE CASE OF THE ASSTT. CIT (INV_ CIR. 3 (1) AURANGABAD VS. HERPREET HOTELS PVT. LTD. (SUPRA) WH EREIN THE TRIBUNAL HAS ALLOWED SIMILAR ADJUSTMENT UPTO 15% FO R THE PROPERTY SITUATED IN AURANGABAD. THE FACTS IN THE CASE OF HERPREET HOTELS PVT. LTD. (SUPRA) ON THE ISSUE OF D IFFERENCE IN TWO VALUATIONS ARE DISTINGUISHABLE, HENCE IT IS NOT HELPFUL TO THE ASSESSEE. IN THAT CASE, THE DIFFERENCE BETWEE N THE COST SHOWN BY THE ASSESSEE AND THE DVO WAS ONLY 10% WHER EAS IN THE CASE OF THE PRESENT ASSESSEE THE DIFFERENCE IS 15.5% THAT TOO BETWEEN THE COST SHOWN BY THE ASSESSEE AND AFTE R GIVING EFFECT TO THE FIRST APPELLATE ORDER TO THE CASE. W E THUS DO NOT FIND ANY REASON TO INTERFERE WITH THE FIRST APPELLA TE ORDER ON THIS ACCOUNT. THE LEARNED CIT(A) HAS ALREADY GIVEN SUFFICIENT RELIEF ACCEPTING THE CONTENTION OF THE ASSESSEE TO SOME EXTENT AN ASSIGNED REASONS. WE ARE THEREFORE, NOT INCLINE D TO INTERFERE THEREWITH AS THE ASSESSEE HAS NOT MADE OU T ANY BETTER CASE BEFORE US. ITA NO.1458 TO 1460/PN/2008 RAMCHAND KUKREJA A.Y. 2004-05 TO 2006-07 , 5 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE D ISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST 2010. SD/- SD/- (D. KARUNAKARA RAO) (I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE,DATED THE 31 ST AUGUST 2010 ANKAM COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT- (A) KOLHAPUR (4) CIT KOLHAPUR (5) THE D.R. ITAT B BENCH, PUNE TRUE COPY BY ORDER, ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE