Ala Venkateswarlu, Guntur V. ITO, Guntur

ITA 157/VIZ/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1741 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 02-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Keywords: Unexplained investment; Opportunity of being heard; Valuation report; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.157/VIZAG/2009 ASSESSMENT YEAR : 2005-06 DR. ALA VENKATESWARLU, GUNTUR ITO WARD-2(2), GUNTUR (APPELLANT) VS. (RESPONDENT) PAN NO.ADNPA 9982F ITA NO.158/VIZAG/2009 ASSESSMENT YEAR : 2005-06 DR. ALA ANURADHA, GUNTUR ITO WARD-2(2), GUNTUR (APPELLANT) VS. (RESPONDENT) PAN NO.AESPA9623B APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI B. JAYA KUMAR, DR ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THESE APPEALS ARE PREFERRED BY THE ASSESSEES ON CO MMON GROUNDS AGAINST THE RESPECTIVE ORDER OF THE CIT(A) PERTAINI NG TO THE ASSESSMENT YEAR 2005-06. SINCE THE GROUNDS ARE COMMON IN BOTH THE APPEALS, WE EXTRACT THE GROUNDS OF APPEAL OF ITA NO.157 OF 2009 AS UNDER:- 1. THE PETITIONER SUBMITS THAT THE ORDER OF THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) GUNTUR AND AS WELL AS THE O RDER OF THE LEARNED INCOME TAX OFFICER WARD 2(2), GUNTUR IS UNJ UST, ARBITRARY AND AGAINST THE PRINCIPALS OF EQUITY AND JUSTICE. 2. THE PETITIONER SUBMITS THAT THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) GUNTUR ERRED INFIXING THE COST OF THE CONSTRUCTION OF THE RESIDENTIAL CUM NURSING HOME AT GUNTUR. THE PE TITIONER HAS RETURNED THE COST OF CONSTRUCTION AMOUNTING AN AMOU NT OF RS.16,15,119/- THAT WAS APPORTIONED RELATING TO THE YEAR UNDER CONSTRUCTION. THE LEARNED DEPARTMENTAL VALUER VALU ED THE PROPERTY AT THE RS.56,92,625/- AND THE PRORATE VALUE FOR THE YEAR UNDER CONSTRUCTION WAS WORKED OUT RS.37,14,062/-. THE LE ARNED INCOME TAX OFFICER COMPLETED THE ASSESSMENT BY ADDING OF R S.20,98,943/- IGNORING THE VALUATION REPORT GIVEN BY THE APPROVED VALUER AND 2 ND 2 APPROVED VALUER. THE COMMISSIONER OF INCOME TAX (A PPEALS) ERRED BY GIVING RELIEF OF RS.6,82,425/- INSTEAD OF RS.20,98,943/- WHICH IS IN CORRECT AND BAD IN LAW. THE PETITIONER NOW CONTESTING IN THIS APPEAL AGAINST THE NET ADDITION OF RS.14,16,41 8 (THE DIFFERENCE BETWEEN THE REDUCED FIGURE OF RS.30,31,637 16,15, 119). THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), GUNTUR ERRED FOR NOT CONSIDERING THE APPROVED VALUERS REPORTS. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), GU NTUR ERRED TO GRANT RELIEF 15% DIFFERENCE BETWEEN CPW RATES IN PL ACE OF 20%. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), GU NTUR ERRED TO ALLOW PERSONAL SUPERVISION FOR THE CONSTRUCTION OF BUILDINGS ONLY 10% INSTEAD OF 15%. 4. THE PETITIONER SUBMITS THAT THE PETITIONER MARINATI NG THE REGULAR BOOKS OF ACCOUNTS AND PAYMENT VOUCHERS FOR ALL THE CONSTRUCTION EXPENSES AND THEREFORE THE PETITIONER PRAYS THAT CO ST OF THE CONSTRUCTION AS PER THE BOOKS OF ACCOUNTS MAY KINDL Y BE ACCEPTED IN TOTO., AS SINGLE MISTAKE HAS BEEN NOTICED NEITHE R BY LEARNED INCOME TAX OFFICER NOR BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), GUNTUR. 5. AT LAST THE PETITIONER PRAYS THAT. I. THE DIFFERENCE VALUE OF THE CONSTRUCTION OF 14,16,4 18/- MAY KINDLY BE DELETED AND THE VALUE AS PER BOOKS OF ACCOUNTS MAY KINDLY BE ACCEPTED. II. THE TOTAL COST OF CONSTRUCTION MAY KINDLY BE APPORT IONED THE TOTAL COST OF CONSTRUCTION BETWEEN THE YEAR AND THE NEXT YEAR WHEN THE CONSTRUCTION WAS COMPLETED. 6. THE PETITIONER RESERVE HIS RIGHT TO RAISE ADDITIONA L GROUNDS OR WRITTEN ARGUMENTS, I ANY AT THE TIME OF APPEAL HEAR ING, THE HONOURABLE INCOME TAX APPELLATE TRIBUNAL MAY KINDLY BE PERMITTED TO ALLOW THE APPELLATE MAY SUCH ADDITIONAL GROUNDS, IF ANY, MAY KINDLY BE ADMITTED IN THE INTEREST OF NATURAL JUSTI CE AND EQUITY THERE OFF. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEES HAS INVITED OUR ATTENTION THAT ASSESSING OFFICER HAS ES TIMATED THE UNEXPLAINED INVESTMENT IN THE CONSTRUCTION OF PROPERTY ON THE B ASIS OF THE DVOS REPORT WITHOUT TAKING INTO ACCOUNT THE OBJECTION TO THE DV OS REPORT FILED BY THE ASSESSEE BEFORE HIM. THE LD. COUNSEL FOR THE ASSES SEE HAS INVITED OUR ATTENTION TO THE SALIENT FEATURES OF THE CASE. ASS ESSING OFFICER RECEIVED THE VALUATION REPORT ON 28.12.07 WHICH WAS COMMUNICATED TO THE ASSESSEE ON THE SAME DATE AND THE ASSESSEE HAS FILED THE OBJECTION TO THE VALUATION REPORT VIDE ITS LETTER DATED 31.12.2007 AND IT WAS RECEIVE D IN THE OFFICE OF THE A.O. AT 03.30 PM. ON THE SAME DAY, THE ASSESSING OFFICE R HAS PASSED THE ASSESSMENT ORDER. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT HE HAS SIMPLY MENTIONED THE FILING OF THE OBJECTION IN THE ASSESSMENT ORDER BUT 3 HE HAS NOT LOOKED INTO IT. THE CIT(A) DID NOT TAKE COGNIZANCE OF ALL THESE FACTS AND HAS OBSERVED THAT A.O. HAS CONSIDERED THE OBJECTIONS FILED BY THE ASSESSEES. THE LD. COUNSEL FOR THE ASSESSEE FURTHE R CONTENDED THAT ASSESSEE WAS MAINTAINING PROPER BOOKS OF ACCOUNTS WITH REGAR D TO THE COST OF CONSTRUCTION, BUT THE A.O. IGNORED THE SAME WHILE E STIMATING THE COST OF CONSTRUCTION. HE ACCORDINGLY SUBMITTED THAT IN THE INTEREST OF JUSTICE THE MATTER BE RESTORED TO THE FILE OF THE A.O. WITH THE DIRECTION TO RE-ADJUDICATE THE ISSUE IN THE LIGHT OF OBJECTION TO THE DVOS FI LED BY THE ASSESSEES AND THE BOOKS OF ACCOUNTS MAINTAINED BY IT. 3. THE LD. D.R. ON THE OTHER HAND OBJECTED TO THE S UBMISSIONS OF THE ASSESSEES WITH THE CONTENTIONS THAT THE OBJECTIONS FILED BY THE ASSESSEES WERE EXAMINED IN DETAIL BY THE LOWER AUTHORITIES AS SUCH NO INFERENCE IS CALLED FOR. MOREOVER THE CIT(A) HAS ALREADY GRANTE D SOME RELIEF TO THE ASSESSEES AND AS SUCH THE ORDER OF THE CIT(A) SHOUL D NOT BE DISTURBED. 4. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A C AREFUL PERUSAL OF THE ORDER OF THE LOWER AUTHORITIES, WE FIND THAT UNDISP UTEDLY THE VALUATION REPORT WAS RECEIVED BY THE A.O. ON 28.12.2007 WHICH WAS SU PPLIED TO THE ASSESSEES AND HE FILED ITS OBJECTIONS ON 31.12.2007 AND THE A SSESSMENT ORDER WAS PASSED ON THE SAME DAY BECAUSE THE ASSESSMENT WAS G ETTING BARRED BY LIMITATION. FROM THESE FACTS, WE ARE OF THE VIEW T HAT A.O. HAS DECIDED THE ISSUES WITHOUT HAVING PROPERLY EXAMINED THE OBJECTI ONS FILED BY THE ASSESSEES. MORE SO THE CIT(A) HAS ALSO IGNORED THE SE FACTS AND HAS DECIDED THE ISSUES AFTER GRANTING CERTAIN RELIEF. 5. SINCE THE OBJECTIONS OF THE ASSESSEES ARE NOT PR OPERLY EXAMINED BY THE LOWER AUTHORITIES, WE ARE OF THE VIEW THAT MATTER S HOULD BE RESTORED BACK TO THE FILE OF THE A.O. FOR ITS FRESH ADJUDICATION. W E ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE F ILE OF THE A.O. WITH THE DIRECTION TO RE-ADJUDICATE THE ISSUE AFRESH AFTER A FFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEES AND ALSO IN THE LIGHT OF OBJECTIONS TO THE DVOS REPORT FILED BY THE ASSESSEES. 4 PRONOUNCED IN THE OPEN COURT ON 06.10.2009 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 6 TH OCTOBER, 2009 COPY TO 1 M/S. N. KOTESWARA RAO & CO., CHARTERED ACCOUNTANT S, D.NO.23-6-17/2, PATNAM BAZAR, GUNTUR-522 003. 2 THE ITO, WARD-2(2), GUNTUR 3 THE CIT, GUNTUR 4 THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM