Income Tax Officer-(Exeption), Lucknow V. M/s Kamla Nehru Memorial Trust, Sultanpur

ITA 155/LKW/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6783 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 03-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: C K SINGH D R SHRI K R RASTOGI
• Keywords: Charitable institution; Proportionate interest; Valuation report
• Section: 143(3); 133(6); 191; 11

Judgement Text

I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 INCOME TAX OFFICER (EXEMPTION) LUCKNOW. VS. M/S KAMLA NEHRU MEMORIAL TRUST LAL DIGGI, CIVIL LINES, SULTANPUR. PAN:AAATK 8307 N (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A)-4, LUCKNOW DATED 14/12/2016 PERTAINING TO AS SESSMENT YEAR 2008- 2009. IN THIS APPEAL THE REVENUE HAS TAKEN THE FOL LOWING GROUNDS OF APPEAL: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 1,075/- ON ACCOUNT OF PROPORTIONATE INTEREST. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.66,72,000/- ON ACCOUNT OF HOSTEL FEE AND HELD IN THE ASSESSMENT ORDER AS INCOME NOT DERIVED FROM THE PROPERTY HELD UNDER TRUST. APPELLANT BY SHRI C. K. SINGH, D.R. RESPONDENT BY SHRI K. R. RASTOGI, C. A. DATE OF HEARING 26/02/2019 DATE OF PRONOUNCEMENT 28 /02/2019 I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 2 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.17,28,925/- ON ACCOUNT OF DIFFERENCE IN THE COST OF CONSTRUCTION OF HOSTEL BUILDING IN A.Y. 2008-09. 4. APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY ONE O R MORE OF THE GROUNDS OF APPEAL, AS STATED ABOVE AS AND WH EN NEED OF DOING SO ARISES WITH THE PRIOR PERMISSION O F THE HON'BLE BENCH. 2. GROUND NO. 4 OF THE APPEAL IS GENERAL IN NATURE THEREFORE, THE SAME IS DISMISSED. 3. VIDE GROUND NO. 1 THE REVENUE HAS CHALLENGED TH E ACTION OF LEARNED CIT(A) IN DELETING THE ADDITION OF RS.1,075/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PROPORTIONATE INTEREST PAID ON BANK L OAN. THE ASSESSING OFFICER HAS NOTED THAT AN AMOUNT OF RS.1,23,851/- W AS SHOWN AS INTEREST PAID. ON THE OTHER HAND THE ASSESSEE HAD ADVANCED LOANS AND ADVANCES TO THE TUNE OF RS.2,61,081/- TO ITS ASSOCIATE CONCERN. THE ASSESSING OFFICER DISALLOWED PROPORTIONATE INTEREST TO THE TUNE OF RS .1,075/-. BEING AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE LEARN ED CIT(A) WHO ALLOWED RELIEF TO THE ASSESSEE. NOW THE REVENUE IS IN APPE AL BEFORE US. 4. LEARNED D. R. SUPPORTED THE ASSESSMENT ORDER WHE REAS THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF LEA RNED CIT(A). 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT INTEREST FREE LOAN WAS GIVEN BY THE ASSESSEE TRUST TO ITS ASSOCIATE CONCERN WHICH IS WORKING SOL ELY IN THE FILED OF EDUCATION. THE OBJECTS OF THE ASSESSEE TRUST AND T HE OBJECTS OF THE ASSOCIATE CONCERN ARE ALMOST SIMILAR. THESE LOANS WERE SUBSEQUENTLY RETURNED. THE LEARNED CIT(A) FOLLOWING THE ORDER O F LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF KANPUR SUBHASH SHIKSHA SAMI TI VS. DCIT AND DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF DIT VS. ACME EDUCATIONAL I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 3 SOCIETY 326 ITR 146 (DELHI) DELETED THE DISALLOWANC E. WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS RECORDED BY LEARNED CIT(A ) AND DISMISS GROUND NO. 1 OF THE REVENUE. 6. THE FACTS RELATED TO GROUND NO. 2 OF THE APPEAL, IN BRIEF, ARE THAT THE ASSESSEE IS A CHARITABLE TRUST REGISTERED WITH SUB REGISTRAR , FAIZABAD AND HAS BEEN GRANTED REGISTRATION U/S 12A(A) OF THE ACT . THE ENTIRE INCOME FOR THE YEAR WAS CLAIMED AS EXEMPT. THE ASSESSEE WAS C ONTEMPLATING TO MAKE AN ENGINEERING INSTITUTE THEREFORE, CONSTRUCTION OF HOSTEL BUILDING WAS STARTED IN FINANCIAL YEAR 2006-07 ONWARDS. A PART OF HOSTEL BUILDING WAS COMPLETED DURING THE YEAR. THE ASSESSEE WAS ASKED TO SUBSTA NTIATE THE CLAIM THAT PART OF HOSTEL WAS COMPLETE AND WAS USED AS HOSTEL AND PRODUCE INFORMATION SUCH AS NAME OF STUDENT, COMPLETE PARTI CULARS OF STUDENTS, FEES RECEIVED, MODE OF RECEIPT, HOSTEL REGISTER, DETAILS OF SUPERVISORY AUTHORITY ETC TO PROVE THAT HOSTEL FEES OF RS. 66,72,000/- WAS AC TUALLY DERIVED AS HOSTEL INCOME. THE ASSESSING OFFICER NOTED THAT ASSESSEE PARTLY FURNISHED DETAILS OF 78 STUDENTS AND LATER SUBMITTED LIST OF 266 STUD ENTS. NOTICES U/S 133(6) OF THE ACT WERE ISSUED TO THE FATHERS OF SUCH STUDENTS TO OBTAIN THE CONFIRMATION. THE ASSESSING OFFICER NOTED THAT IN RESPONSE TO THE NOTICES U/S 133(6) OF THE ACT, IT WAS REPLIED THAT HOSTEL F EES WAS PAID TO KNIMT, AN ASSOCIATE CONCERN OF THE ASSESSEE, AND NOT TO THE A SSESSEE. IN VIEW OF THESE FACTS THE ASSESSING OFFICER HELD THAT THERE W AS NO USAGE OF HOSTEL BUILDING IN FINANCIAL YEAR 2007-08 AND STUDENTS OF KNIMT MADE PAYMENT OF HOSTEL FEES IN FINANCIAL YEAR 2008-09 TO KNIMT AND NO HOSTEL FEES WAS PAID TO THE ASSESSEE. IN VIEW OF THESE FACTS, THE ASSES SING OFFICER REJECTED THE CLAIM OF THE ASSESSEE AND DISALLOWED EXEMPTION U/S 11 OF THE ACT. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE LEARNED CIT(A), WHO ALLOWED RELIEF TO THE ASSESSEE. NOW THE REVENU E IS IN APPEAL BEFORE US. I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 4 7. LEARNED D. R. SUPPORTED THE ASSESSMENT ORDER AND SUBMITTED THE ASSESSING OFFICER WAS CORRECT IN HOLDING THAT THERE IS NO ELEMENT OF CHARITY INVOLVED IN THE HOSTEL FEES CHARGED AND FEES CHARGE D WAS EXCESSIVE. 8. LEARNED A. R., ON THE OTHER HAND, SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS DULY COVERED IN FAVOUR OF THE ASSESSEE IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2009-10 BY THE ORDER OF LUCKNOW BEN CH OF THE TRIBUNAL IN I.T.A. NO.533/LKW/2017. LEARNED D. R. EVEN THOUGH RELIED ON THE ORDER OF THE ASSESSING OFFICER BUT DID NOT DISAGREE THAT THE ISSUE IS NOT COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF LUCKNOW BENC H OF THE TRIBUNAL. 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT LEARNED CIT(A) HAS A LLOWED RELIEF TO THE ASSESSEE BOTH ON LEGAL ISSUES AND ON MERITS. THE FI NDINGS OF LEARNED CIT(A) IN THIS RESPECT ARE QUITE IMPORTANT WHEREIN HE HAS HELD THAT FEE COLLECTED BY KNIMT WERE TRANSFERRED TO ASSESSEES ACCOUNT ON THE SAME DAY AND LEARNED CIT(A) HAS ALSO HELD THAT FUNDS RECEIVED WERE INVES TED IN THE BUILDING WHICH ITSELF WAS TO BE USED FOR EDUCATIONAL PURPOSES. TH E FINDINGS OF LEARNED CIT(A) ARE REPRODUCED BELOW: 6.4 (I) THE UNDERSIGNED HAS GONE THROUGH THE ASSESSMENT ORDER, WRITTEN SUBMISSIONS OF APPELLANT, REMAND REPORT OF AO AND COMMENTS OF APPELLANT THEREON. THESE GROUNDS OF APP EAL ARE DISCUSSED AND DECIDED AS UNDER:- (II) THE APPELLANT HAS CONTENDED THAT FUNDS RECEIVE D BY APPELLANT FROM HOSTEL FEES AND OTHER SOURCES OF INC OME AS SHOWN IN THE INCOME AND EXPENDITURE ACCOUNT HAS SOL ELY BEEN UTILIZED FOR PURPOSE OF CONSTRUCTION OF BUILDING OF THE INSTITUTE AND HAVE WHOLLY AND EXCLUSIVELY BEEN UTILIZED FOR E DUCATION PURPOSE ONLY. THE APPELLANT RELIED UPON THE JUDGMEN T OF HON'BLE HIGH COURT OF UTTARAKHAND, NAINITAL BENCH I N THE CASE OF CIT, HALDWANI VS. JYOTI PRABHA SOCIETY REPORTED IN 177 TAXMAN 429. THE RELEVANT PORTION IS REPRODUCED AS U NDER:- I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 5 'THE OBJECTS OF THE ASSESSEE-SOCIETY MADE IT ABUNDA NTLY CLEAR THAT THE SOCIETY EXISTED FOR CHARITABLE PURPO SES. THE ACTIVITIES OF THE ASSESSEE-SOCIETY INCLUDED LETTING OUT OF THE PROPERTIES TO THE EDUCATIONAL INSTITUTIONS. HAD THE RENTAL INCOME EARNED BY THE ASSESSEE NOT BEEN UTILI ZED FOR THE EDUCATIONAL PURPOSES, IT COULD HAVE BEEN SA ID THAT THE LETTING OUT OF THE PROPERTY ON THE PART OF THE ASSESSEE-SOCIETY HAD LOST THE CHARITABLE PURPOSE. B UT IN THE INSTANT CASE, THERE WAS A CONCURRENT FINDING OF FACT ON THE PART OF THE COMMISSIONER (APPEALS) AND THE TRIBUNAL THAT THE RENTAL INCOME EARNED BY THE ASSES SEE- SOCIETY WAS BEING UTILIZED AGAIN FOR THE PURPOSES O F IMPARTING EDUCATION BY MAINTAINING THE BUILDINGS AN D CONSTRUCTING NEW BUILDING FOR THE SAME PURPOSE. AS SUCH, THE CHARITABLE PURPOSE WAS NOT LOST AND IT COULD NO T BE SAID THAT THE ASSESSEE WAS NOT ENTITLED TO THE EXEM PTION CLAIMED BY IT UNDER SECTION 11 [PARA 5]. THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAD RIGHTLY HELD THAT THE INCOME OF THE ASSESSEE WAS EXEMPT UNDER SECTION 11. [PARA 8] THE ABOVE JUDGMENT SUPPORTS THE APPELLANTS CASE. TH E ACTIVITY OF THE APPELLANT INCLUDED LETTING OUT OF THE HOSTEL BUILDING OF THE APPELLANT TO THE STUDENTS OF ITS ASSOCIATE CONCERN. THE HOSTEL FEES SO RECEIVED WAS UTILIZED AGAIN BY THE APPELLAN T FOR THE PURPOSE OF EDUCATION FOR CONSTRUCTING BUILDING FOR EDUCATION PURPOSE ONLY. THUS, THE CHARITABLE PURPOSE WAS NOT LOST. THE SAME HAS TO BE TREATED AS INCOME FOR CHARITABLE ACT IVITY AND SAID INCOME IS ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. THE ACTION OF THE ASSESSING OFFICER IN DENIAL OF EXEMPT ION U/S 11 OF THE ACT TO THIS HOSTEL FEES OF RS.66,72,000/- IS HE REBY DELETED. 6.4(III) ANOTHER FACT TO BE NOTED IS THAT ASSESSMENT OF THE APPELLANT IN AN EARLIER AY I.E. A.Y. 2006-07 WAS CO MPLETED U/S 143(3) OF THE ACT IN WHICH THE INCOME WAS COMPUTED AS PER SECTION 11 OF THE ACT 6.4.(IV)THE AO IN THE REMAND REPORT HAS SUBMITTED A S UNDER:- 'IT APPEARS THAT THE HOSTEL FEE WAS COLLECTED BY KN IMT FROM ITS STUDENTS AND WAS TRANSFERRED TO THE ASSESS EE ON THE SAME DAY AND NO HOSTEL FEE WAS DIRECTLY COLLECT ED BY THE ASSESSEE FROM THE STUDENTS RESIDING IN THE HOST EL. HOWEVER THE CASE RELATES TO A. Y. 2008-09 AND AFTER LAPS I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 6 OF LONG PERIOD, THE PHYSICAL VERIFICATION IN THIS R EGARD CANNOT BE DONE. THUS, THE CONTENTION OF THE APPELLANT THAT IT HAS R ECEIVED HOSTEL FEES FROM STUDENTS OF KNIMT BY TRANSFER OF F UNDS FROM KNIMT TO THE APPELLANT ON THE VERY SAME DAY HA S NOT BEEN DISPUTED BY THE AO. 6.5(V) THUS, IN VIEW OF THE FACTS DISCUSSION AND JUDGMENT AS OUTLINED IN PARAS 6.4(II) TO 6.4(IV) OF THIS ORDER THE HOSTEL FEES OF RS. 66,72,000/- RECEIVED BY APPELLANT FROM B-PHARMA STUDENTS STUDYING IN KNIMT (ASSOCIATE INSTITUTION OF APPELLA NT) IS TREATED AS INCOME FROM CHARITABLE ACTIVITY AND IS ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT. THIS IS MAINLY FOR THE REASON TH AT THIS HOSTEL FEES WAS UTILIZED SOLELY FOR PURPOSE OF CONSTRUCTIO N OF NEW BUILDING WHICH WAS UTILIZED FOR EDUCATION PURPOSE O NLY. ACCORDINGLY, THE AO IS DIRECTED TO COMPUTE THE INCO ME OF THE APPELLANT AS PER SECTION 11 OF THE ACT AFTER TAKING INTO ACCOUNT THE HOSTEL FEES RECEIVED OF RS.66,72,000/- ALSO. GR OUNDS OF APPEAL NO. 3,4,5,6 AND 7 ARE ALLOWED. 9.1 WE ALSO NOTE THAT THE ISSUE INVOLVED IN THE PRE SENT APPEAL IS DULY COVERED IN FAVOUR OF THE ASSESSEE IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2009-10 BY THE ORDER OF THIS BENCH OF THE TRIBUNAL IN I.T.A. NO.533/LKW/2017 WHEREIN AS PER PARA 4 OF ITS ORDER, THE TRIBUNAL HAS HELD AS UNDER: 4. WE FIND THAT LD. CIT(A) HAS FOLLOWED HIS ORDER DATED 14/12/2016 PASSED IN THE CASE OF THE ASSESSEE ITSEL F FOR ASSESSMENT YEARS 2007-08 AND 2008-09 WHILE ALLOWING THE APPEAL OF THE ASSESSEE. LD. D.R. COULD NOT BRING A NY MATERIAL ON RECORD TO SHOW THAT ORDER FOR ASSESSMENT YEAR 20 07-08 AND 2008-09 RELIED UPON BY THE LD. CIT(A) WAS VARIE D IN APPEAL BY ANY HIGHER FORUM. HENCE FACTS BEING IDEN TICAL, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) WHICH IS HEREBY CONFIRMED AND GROUND NO.1 OF THE AP PEAL OF THE REVENUE IS DISMISSED. 9.1 THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A) AND UPHOLD THE DELETION MADE BY LEARNED CIT(A) AND DISMISS GROUND NO. 2 OF THE REVENUE. I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 7 10. VIDE GROUND NO. 3 THE REVENUE HAS CHALLENGED TH E ACTION OF LEARNED CIT(A) IN DELETING THE ADDITION OF RS.17,28,925/- W HICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF DIFFERENCE IN THE COST OF CO NSTRUCTION OF HOSTEL BUILDING IN ASSESSMENT YEAR 2008-09 RELYING UPON TH E VALUATION REPORT OF THE DISTRICT VALUATION OFFICER. AGGRIEVED, THE ASSESSE E WENT IN APPEAL BEFORE LEARNED CIT(A) WHO ALLOWED RELIEF TO THE ASSESSEE. NOW THE REVENUE IS IN APPEAL BEFORE US. 11. LEARNED D. R. SUPPORTED THE ASSESSMENT ORDER. 12. LEARNED A. R., ON THE OTHER HAND, SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS DULY COVERED IN FAVOUR OF THE ASSESSEE IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2009-10 BY THE ORDER OF LUCKNOW BEN CH OF THE TRIBUNAL IN I.T.A. NO.533/LKW/2017. LEARNED D. R. EVEN THOUGH RELIED ON THE ORDER OF THE ASSESSING OFFICER BUT DID NOT DISAGREE THAT THE ISSUE IS NOT COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF LUCKNOW BENC H OF THE TRIBUNAL. 13. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT LEARNED CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE ON LEGAL ISSUE BY HOLDING THAT REFERENCE T O D.V.O. WAS BAD IN LAW BY HOLDING AS UNDER: 5.4(I) THE UNDERSIGNED HAS GONE THROUGH THE ASSESS MENT ORDER DATED 30.12.2010, THE WRITTEN SUBMISSIONS OF THE APPELLANT, THE REMAND REPORT SUBMITTED BY THE AO AN D THE COMMENTS OF THE APPELLANT ON THE REMAND REPORT SUBM ITTED BY THE AO. GROUND OF APPEAL NO. 1,2 AND 9 (II)AS IS EVIDENT FROM THE ASSESSMENT ORDER, THE LD . AR NAMELY SHRI AJAY AGARWAL, CA ATTENDED THE ASSESSMENT PROCE EDINGS FOR AY 2007-08 ON 25.09.2008. DURING COURSE OF ASSESSME NT PROCEEDINGS FOR AY 2007-08 ON 26.09.2008 THE AO REF ERRED THE MATTER TO DVO, KANPUR FOR ASCERTAINING THE COST OF INVESTMENT I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 8 IN HOSTEL BUILDING DURING THE FY 2007-08 (WHICH WAS SHOWN BY THE APPELLANT AT RS.89,52,125/-). THE AO HAS MADE T HIS REFERENCE TO DVO WITHOUT POINTING OUT ANY DEFECTS/ DISCREPANCIES IN THE BOOKS OF ACCOUNTS OF THE APPEL LANT. NOR, THE BOOKS OF ACCOUNTS OF THE APPELLANT WERE REJECTE D BY THE AO. THE D.V.O. ESTIMATED COST OF CONSTRUCTION AT RS. 1, 06,81,050/-. IN RESPONSE THE APPELLANT FILED A REPORT BY REGISTE RED VALUER BUT SAME WAS REJECTED BY DVO ON THE GROUNDS THAT IT WAS NOT AS PER CPWD NORMS. (III) THE ABOVE FACTS CLEARLY SHOW THAT REFERENCE U /S 142A OF THE ACT HAS BEEN MADE BY THE AO TO DVO ON 26.09.2008 I. E A DATE WHEN NO PROCEEDINGS WERE PENDING BEFORE THE ASSESSI NG OFFICER NOR THE ASSESSING OFFICER BY THAT DATE HAD POINTED OUT ANY DISCREPANCIES/DEFECTS IN THE BOOKS OF ACCOUNTS OF THE APPELLANT NOR THE AO HAD REJECTED THE BOOKS OF ACCO UNT OF THE APPELLANT BY THAT DATE. (IV) THE DECISION OF HON'BLE JURISDICTIONAL HIGH CO URT OF ALLAHABAD, LUCKNOW BENCH IN ITA NO. 136 OF 2007 IN CASE OF CIT-II LUCKNOW VS. LUCKNOW PUBLIC EDUCATIONAL SOCIE TY, LUCKNOW AND THE DECISION OF HON'BLE APEX COURT IN T HE CASE OF SARGAM CINEMA VS. CIT (2010) REPORTED IN 328 ITR 51 3 (SC) COME IN SUPPORT OF THE APPELLANT AND RENDER THE REF ERENCE MADE BY THE AO TO DVO, KANPUR UNDER SECTION 142A OF THE ACT WITHOUT REJECTING THE BOOKS OF ACCOUNTS AS VOID AND NOT VALID. THEREFORE, THE ADDITION OF RS.17,28,925/- MADE ON B ASIS OF DVO, KANPUR REPORT CANNOT BE SUSTAINED AND IS HEREB Y DELETED. WE ALSO NOTE THAT LEARNED CIT(A) HAS ALSO ALLOWED R ELIEF TO THE ASSESSEE ON MERITS. THE RELEVANT FINDINGS ARE REPRODUCED BELOW : 8.4(I)THE UNDERSIGNED HAS GONE THROUGH THE ASSESSM ENT ORDER, WRITTEN SUBMISSIONS, REMAND REPORT OF AO AND COMMEN TS OF APPELLANT ON REMAND REPORT. THESE GROUNDS OF APPEAL ARE DISCUSSED AND DECIDED AS UNDER:- 8.4(II) THE CONTENTION OF THE APPELLANT IS CORRECT THAT THE RATES ADOPTED BY AO AND DVO ARE CPWD RATES AND NOT UP PWD RATES. THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT O F ALLAHABAD IN CASE OF RAJ KUMAR VS. CIT (1990) REPORTED IN 182 IT R 1436 (ALLAHABAD) IS VERY CLEAR ON THIS ISSUE. THE HON'BL E HIGH COURT HAS I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 9 HELD THAT RATES TO BE CONSIDERED ARE UP PWD RATES. SIMILARLY, THE HON'BLE RAJASTHAN HIGH COURT IN JUDGMENTS IN CASES OF CIT VS. SMT. PREM KUMARI MURDIA (2008) 296 ITR 508 (RAJ.) A ND CIT VS. DINESH TALWAR (2004) 265 ITR 344(RAJ.) SUPPORT THE CASE OF THE APPELLANT THAT THE RATES TO BE CONSIDERED ARE UP PW D RATES AND NOT CPWD RATES. THERE IS DIFFERENCE OF 25% IN CPWD RATES AND UPPWD RATES AS DISCUSSED BY HON'BLE ITAT, LUCKNOW BENCH I N THE CASE OF SOCIETY FOR ADVANCEMENT OF ENVIRONMENTAL SERVICE S VS. ADDL. CIT, RANGE-11, LUCKNOW IN I.T.A.T. NO. 537/LUC/09 D ATED 23.02.2010. THEREFORE, A REBATE OF 25% HAS TO BE GI VEN TO THE APPELLANT FROM THE CPWD RATES ADOPTED BY DVO. I FIND THAT TOTAL COST OF CONSTRUCTION DISCLOSED BY THE APPELLANT IN ITS BOOKS OF ACCOUNTS FOR AY 2008-09 I S RS.89,52,125/- WHEREAS THE DVO HAS ESTIMATED THE CO ST OF CONSTRUCTION AT RS.1,06,81,050/-. A REBATE OF 25% I S ALLOWABLE AS DISCUSSED ABOVE FOR THE DIFFERENCE IN CPWD RATES AN D UPPWD RATES, IF, THE SAID REBATE IS GIVEN THEN DIFFERENCE BETWEEN ESTIMATED COST OF CONSTRUCTION AS PER DVO AND THAT DISCLOSED BY THE APPELLANT IN HIS BOOKS OF ACCOUNTS IS NEGLIGIBL E OR EVEN LESSER THAN THAT SHOWN BY THE APPELLANT N ITS BOOKS OF ACC OUNTS. IF THE REBATE OF 25% IS GIVEN, THE COST ESTIMATED BY D.V.O . WORKS OUT TO BE A LOWER FIGURE AS COMPARED TO THE COST SHOWN BY THE APPELLANT IN ITS BOOKS OF ACCOUNT. THE HON'BLE JURISDICTIONAL ITAT LUCKNOW IN CASE OF ITO VS. SMT. PRAMILA AGARWAL REPORTED IN (2004) 88 TTJ 91(LUCKNO W) AND IN CASE OF SHRI ALOK GUPTA VS. (TO RANGE-LKL), LUCKNOW BENCH AND HON'BLE MP HIGH COURT IN CASE OF CT VS. ABESSON HBT ELS(P) LTD. REPORTED IN (2004) 191 CTR 263 (MP) HAVE HELD THAT MINOR DIFFERENCE OF 10% TO 15% IN COST ESTIMATED BY DVO A ND COST SHOWN BY ASSESSEE IN BOOKS OF ACCOUNTS IS USUALLY I GNORED AS THE COST DETERMINED BY DVO IS AN ESTIMATION ONLY. 8.4(III) IN VIEW OF THE ABOVE DISCUSSION AND THE JU DGMENTS OUTLINED IN PARA 8.4(II) ABOVE THERE IS NO JUSTIFICATION IN ADDITION MADE BY THE AO TO THE EXTENT OF RS.17,28,925/-. THUS, NO AD DITION COULD HAVE BEEN MADE BY THE AO IN THIS REGARD. HOWEVER, I HAVE ALREADY HELD IN PARA 5.4 OF THIS ORDER THAT THE REF ERENCE MADE BY THE AO TO DVO IS ITSELF INVALID AND VOID AS REFEREN CE WAS MADE BY THE AO TO THE DVO WITHOUT REJECTING THE BOOKS OF AC COUNTS. THEREFORE, THESE GROUNDS BECOMES ACADEMIC IN NATURE . IN VIEW OF THE ABOVE DISCUSSION THE GROUNDS OF APPEAL NO. 10 A ND 11 ARE ALLOWED. I.T.A. NO.155/LKW/2017 ASSESSMENT YEAR:2008-09 10 13.1 WE ALSO NOTE THAT THE ISSUE INVOLVED IN THE PR ESENT APPEAL IS DULY COVERED IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10 BY THE ORDER OF THIS BENCH OF THE TRIB UNAL IN I.T.A. NO.533/LKW/2017 WHEREIN AS PER PARA 9 OF ITS ORDER, THE TRIBUNAL HAS HELD AS UNDER: 9. WE FIND THAT LD. D.R. COULD NOT POINT OUT ANY SP ECIFIC ERROR IN THE ORDER OF LD. CIT(A). HE COULD NOT BRI NG ANY MATERIAL ON RECORD TO CONTROVERT THE FINDING OF THE LD. CIT( A) THAT IN THE YEAR UNDER APPEAL, BOOKS OF ACCOUNT OF THE ASSESSEE WERE NOT REJECTED BY THE ASSESSING OFFICER BEFORE MAKING REF ERENCE TO THE DVO UNDER SECTION 142A OF THE ACT FOR VALUATION OF THE PROPERTY. HENCE, WE FIND NO GOOD REASON TO INTERFE RE WITH THE ORDER OF LD. CIT(A) WHICH IS CONFIRMED AND GROUND N O.2 OF THE APPEAL OF THE REVENUE IS DISMISSED. 13.2 RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A) AND DELETE THE ADDITION MADE BY THE ASSESSING OFFICER A ND DISMISS GROUND NO. 3 OF THE REVENUE. 14. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/2019) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:28/02/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR