ITO, Karur V. Dr. P. Sivamani, Karur

ITA 164/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6215 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 17-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETEGIRI IRS
• Assessee Lawyers: SRHI N QUADIR HOSEYN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A. NO.164/MDS/2014 ( / ASSESSMENT YEAR : 2009-2010) THE INCOME TAX OFFICER, WARD I(2), KARUR. ( !% /APPELLANT) VS DR. P. SIVAMANI, C/O. PRIYANGA NURSING HOME, NO.23/8, NORTH PRADHAKSHNAM ROAD, KARUR. [PAN : ALIPS5992A] ( &'!% /RESPONDENT) / APPELLANT BY : SHRI. T.N. BETEGIRI, IRS, JCIT. / RESPONDENT BY : SRHI. N. QUADIR HOSEYN, ADVOCATE /DATE OF HEARING : 09.04.2014 /DATE OF PRONOUNCEMENT : 09.04.2014. #( / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE REVEN UE ASSAILING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), TIRUCH IRAPALLI, DATED 06.09.2013 RELEVANT TO THE ASSESSMENT YEAR 2009-201 0. I.T.A.NO.164/MDS/2014. :- 2 -: 2. THE ASSESSEE IS A GOVERNMENT DOCTOR AND HER HUSBAN D IS AN ANESTHETIC DOCTOR. A SURVEY U/S.133A WAS CONDUCTED AT THE HOSPITAL PREMISES OF THE ASSESSEE ON 26.08.2008. THE ASSESS EE HAD CONSTRUCTED THREE STORIED HOSPITAL CUM RESIDENCE. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-1 0 ON 06.09.2010 DECLARING HER INCOME AS D8,28,110/-. THE CASE OF T HE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) WAS IS SUED TO THE ASSESSEE ON 03.02.2011. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSING OFFICER IN ORDER TO DETERMINE THE VALUE O F THE HOSPITAL BUILDING REFERRED IT TO THE DEPARTMENT VALUATION OF FICER (DVO) ON 13.09.2010. THE DVO VIDE HIS REPORT DATED 07.03.201 1 DETERMINED THE COST OF CONSTRUCTION OF HOSPITAL BUILDING AS D2,96, 20,000/-. WHEREAS, THE ASSESSEE HAD ADMITTED THE TOTAL COST OF CONSTRU CTION SPREAD OVER A PERIOD OF THREE YEARS AT D71,48,904/-. THE ASSESSI NG OFFICER ESTIMATED THE DIFFERENCE IN COST OF CONSTRUCTION AT D1,85,95, 513/- AND ASSESSED THE SAME AS, INCOME FROM OTHER SOURCES. AGGRIEVE D AGAINST THE ASSESSMENT ORDER DATED 30.12.2011, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) VIDE DETAILED ORDER DATED 06.09.2013 ALL OWED THE APPEAL OF THE ASSESSEE. AGGRIEVED AGAINST THE FIND INGS OF THE CIT(A), THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. I.T.A.NO.164/MDS/2014. :- 3 -: 3. SHRI. T.N. BETGIRI, APPEARING ON BEHALF OF THE REV ENUE SUBMITTED THAT THE CIT(A) HAS ERRED IN HOLDING THA T THE ASSESSING OFFICER SHOULD HAVE REJECTED THE BOOKS OF ACCOUNT B EFORE MAKING REFERENCE TO THE DVO. THE ASSESSEE HAS SUPPRESSED THE COST OF CONSTRUCTION. THE LEARNED DEPARTMENTAL REPRESENTATI VE (DR) VEHEMENTLY SUPPORTED THE ASSESSMENT ORDER AND PRAYE D FOR SETTING SIDE OF THE IMPUGNED ORDER OF THE CIT(A). 4. ON THE OTHER HAND, SHRI. N. QUADIR HOSEYN APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF T HE CIT(A) AND SUBMITTED THAT THE ASSESSEE HAS RAISED CONSTRUCTION OF THE HOSPITAL CUM RESIDENCE OVER A PERIOD OF THREE YEARS. THE AS SESSEE HAS MAINTAINED COMPLETE RECORDS OF BILLS AND VOUCHERS F OR THE CONSTRUCTION OF BUILDING. THE COST OF CONSTRUCTION DURING THE P ERIOD RELEVANT TO THE ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10 HAVE BEEN SHOWN IN THE RETURN OF INCOME FILED IN THE RESPECTIVE ASSESS MENT YEARS. THE TOTAL COST OF CONSTRUCTION SPREAD OVER A PERIOD OF THREE YEARS IS D71,48,900/-. THE LEARNED COUNSEL SUBMITTED THAT T HE ASSESSING OFFICER BEFORE ISSUING NOTICE U/S. 143(2) ON 03.02. 2011, HAD REFERRED THE ISSUE TO DVO ON 13.09.2010. THE ASSESSING OFFI CER WITHOUT REJECTING THE BOOKS OF ACCOUNT, REFERRED FOR VALUAT ION TO DVO WHICH IS I.T.A.NO.164/MDS/2014. :- 4 -: AGAINST THE WELL SETTLED LAW. IN ORDER TO SUPPORT HIS CONTENTIONS, THE LEARNED COUNSEL RELIED ON THE JUDGEMENT OF THE HO NBLE SUPREME COURT OF INDIA IN SARGAM CINEMA VS. CIT 328 ITR 513(SC) . THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE DVO WHIL E MAKING VALUATION, ADOPTED CPWD RATES INSTEAD OF STATE PWD RATE WHICH IS AGAIN AGAINST THE NORMS. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REP RESENTATIVES OF THE RIVAL SIDES. WE HAVE ALSO PERUSED THE ORDERS O F THE LOWER AUTHORITIES AS WELL AS THE JUDGMENT ON WHICH LEARNE D COUNSEL HAS PLACED RELIANCE. THE FACTS NARRATED ABOVE HAVE NOT BEEN DISPUTED BY THE REVENUE. THE ONLY ISSUE RAISED IN APPEAL BY TH E REVENUE IS THAT THERE IS NO PROVISION IN THE ACT TO REJECT THE BOOK S OF ACCOUNT BEFORE MAKING REFERENCE TO THE VALUATION OFFICER. 6. IT HAS COME ON RECORD THAT THE ASSESSEE HAS M AINTAINED PROPER BOOKS OF ACCOUNT DULY SUPPORTED BY BILLS AND VOUCHE RS. THE ASSESSEE HAS CONSTRUCTED HOSPITAL CUM RESIDENTIAL BUILDING D URING THE PERIOD OF THREE YEARS. IN THE RETURN OF INCOME FOR THE RELEV ANT YEARS THE ASSESSEE HAS MENTIONED THE EXPENDITURE ON CONSTRUCT ION OF HOSPITAL BUILDING. WHEREAS THE DVO HAS WORKED OUT THE ENTIR E COST OF I.T.A.NO.164/MDS/2014. :- 5 -: CONSTRUCTION OF BUILDING IN SINGLE YEAR RELEVANT TO THE ASSESSMENT YEARS UNDER CONSIDERATION INSTEAD OF SPREADING IT OVER TH E TOTAL PERIOD OF CONSTRUCTION OF THREE YEARS. THE ASSESSING OFFICER MADE REFERENCE TO DVO WITHOUT REJECTING BOOKS OF THE ASSESSEE OR POI NTING OUT ANY DEFECT OR DEFICIENCY IN SAME. WE AGREE WITH THE OB SERVATIONS OF THE CIT(A) THAT, WHERE BOOKS OF ACCOUNT ARE PROPERLY MA INTAINED AND THE EXPENDITURE IS RECORDED THEREIN WITH FULL DETAILS AND IS SUPPORTED BY BILLS AND VOUCHERS, TOTAL EXPENDITURE AS REFLECTED IN THE BOOKS HAS TO ACCEPTED IN PREFERENCE TO ANY ESTIMATE GIVEN BY AN EXPERT. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF SARGAM CINEMA (SUPRA) WHILE APPROVING THE FINDINGS OF THE TRIBUNAL IN THE SAID CASE HAS HELD THAT THE ASSESSING AUTHORITY CANNOT REFER THE MATTE R TO DVO WITHOUT REJECTING BOOKS OF ACCOUNTS. 7. WE ARE OF THE CONSIDERED OPINION THAT IN TH E PRESENT CASE THE ASSESSING OFFICER REFERRED THE MATTER TO DVO MUCH P RIOR TO ISSUING NOTICE UNDER SECTION 143(2) TO THE ASSESSEE. NO REA SON WHATSOEVER HAS BEEN GIVEN BY THE ASSESSING OFFICER FOR NOT ACC EPTING THE COST OF CONSTRUCTION AS REFLECTED IN THE BOOKS. THE ASSESS ING OFFICER ACTED WITH A PREDETERMINED NOTION, WITHOUT ANALYSING TH E BOOKS OF ACCOUNTS AND MADE ADDITION ON THE BASIS OF DVOS REPORT. IN VIEW OF THE LAW I.T.A.NO.164/MDS/2014. :- 6 -: LAID DOWN BY THE HONBLE APEX COURT, WE FIND NO REA SON TO INTERFERE WITH ORDER OF THE CIT(A). 8. THE IMPUGNED ORDER IS UPHELD AND THE APPEAL OF T HE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE T IME OF HEARING ON WEDNESDAY, THE 9 TH OF APRIL, 2014 AT CHENNAI. SD/- SD/- ( . . . ) (DR. O.K. NARAYANAN) / VICE PRESIDENT ( ! ) (VIKAS AWASTHY) ' # / JUDICIAL MEMBER DATED:9 TH APRIL, 2014. K.V !' #$ %$ /COPY TO: 1. & APPELLANT 2. / RESPONDENT 3. ' ( )/CIT(A) 4. ' /CIT 5. $() * /DR 6. )+ , /GF. I.T.A.NO.164/MDS/2014. :- 7 -: