Shri Asim Kumar Mitra, Kolkata V. ACIT, CC-II, Kolkata, Kolkata

ITA 166/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54478 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANIK
• Assessee Lawyers: RANJAN BANERJEE
• Keywords: Income from undisclosed sources; Principle of natural justice; Source of fund; Fair market value; Corroborative evidences; Valuation report
• Section: 143(3); 142(1); 143(2)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [ () . .. . . .. . , ! '! '! '! '! , ] ]] ] [BEFORE HONBLE SRI S.V.MEHROTRA, AM & HONBLE S RI MAHAVIR SINGH, JM ] !$ !$ !$ !$ /ITA NO.166/KOL/2011 '%& '(/ ASSESSMENT YEAR : 2006-07 SHRI ASIM KUMAR MITRA, KOLKATA -VERSUS- A.C.I.T.,CENTRA L CIRCLE-II, (PAN- ADLPM 4249 B) KOLKATA. (*+ / APPELLANT ) ( ,-*+ /RESPONDENT) *+ . / / FOR THE APPELLANT: SHRI RANJAN BANERJEE ,-*+ . / / FOR THE RESPONDENT: SHRI A.K.PRAMANIK 0 / ORDER ( (( ( '! '! '! '!) )) ), , , , ' PER SHRI MAHAVIR SINGH, JM THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST ORD ER OF CIT(A)CENTRAL-III, KOLKATA IN APPEAL NO.116/CC-II/CIT(A)/C-III/2008-08 DATED 15.11.2010. ASSESSMENT WAS FRAMED BY ACIT, CENTRAL CIRCLE-II, KOLKATA U/S 143(3) OF THE IT ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE ORDER D ATED 5.12.2008 FOR AY 2006-07. 2. THE ONLY ISSUE IN THIS APPEAL IS THAT THE A SSESSEE IS AGAINST ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN MAKING ADDITION OF U NDISCLOSED SOURCES BEING DIFFERENCE IN PURCHASE PRICE OF PROPERTY IN VIEW OF THE REPORT OF VALUATION OFFICER. FOR THIS ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GR OUNDS :- 1. FOR THAT THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. C.I.T.(CENTRAL(A)- III, KOLKATA HAS ERRED TO CONFIRM THE ADDITION OF R S.2,78,000/- AS U DISCLOSED SOURCES IS ILLEGAL AND UNLAWFUL. 2. FOR THAT THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. C.I.T. (CENTRAL(A)- III, KOLKATA HAS ERRED TO PASS THE APPEAL ORDER ON THE WRONG OBSERVATION OF REMAND REPORT WHICH IS ILLEGAL, UNLAWFUL AND VIOLAT ION OF NATURAL JUSTICE. 3. FOR THAT THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. A.C.I.T. CC-II, KOLKATA PASSED THE ORDER BY VIOLATION OF NATURAL JU STICE IS ALSO ILLEGAL AND BAD IN THE EYE OF LAW. 2 4. FOR THAT THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. A.C.I.T. CC-II, KOLKATA HAS ERRED TO MAKE THE ADDITION OF RS.2,78,0 00/- AS UNDISCLOSED SOURCES OF INCOME WITHOUT GIVEN THE PROPER OPPORTUNITY AS W ELL AS DID NOT ALLOW TO REBUT THE OBSERVATION OF THE VALUATION OFFICER ON T HAT TIME, IS VIOLATION OF NATURAL JUSTICE, ILLEGAL AND OTHERWISE BAD IN LAW. 3. AT THE OUTSET, LEARNED COUNSEL FOR THE ASS ESSEE STATED FACTS IN BRIEF THAT AO HAS CALLED FOR BOOKS OF ACCOUNTS, BANK STATEMENTS AND S UPPORTING EVIDENCES, WHICH WERE PRODUCED BY THE ASSESSEE AS ADMITTED IN THE ASSESSM ENT ORDER. HE REFERRED TO RELEVANT PARA OF ASSESSMENT ORDER WHICH READS AS UNDER :- RETURN OF INCOME FILED ON 31.07.2006 SHOWING TOTAL INCOME OF RS.1,87,540/-. THE RETURN WAS PROCESSED ON 08-12-2006. NOTICE U/S 143(2) AND 142(1) WERE SERVED IN RESPONSE TO THAT SHRI ASIM KUMAR MITRA, ASSESSEE AND MR.A.SEN, ACCOUNTANT APPEARED FROM TIME TO TIME AND EXPLAINED THE RETURN. BOOKS OF A/CS., BANK STATEMEN T AND SUPPORTING EVIDENCES WERE PRODUCED AND DETAILS FILED. THE SAME WERE EXAMINED AND TEST CHECKED. THE CASE WAS HEARD AND DISCUSSED. HE STATED THAT ASSESSEE HAS PURCHASED FLAT AT 19, J USTICE DWARAKANATH ROAD, KOLKATA- 20 AND SALE CONSIDERATION OF THIS FLAT, AS RECORDED IN SALE DEED, IS RS.15 LAKHS. THE AO REFERRED TO THE VALUATION CELL U/S 142A OF THE ACT FOR ESTIMATING FAIR MARKET VALUE OF THE SAID FLAT AND THE VALUATION OFFICER DETERMINED THE VALUE AT RS.17,78,000/-. THE AO RECEIVED THE VALUATION REPORT ON 4.12.2008 AND FIXE D HEARING ON 5.12.2008. THE AO FINALLY PASSED ASSESSMENT ORDER ON 5.12.2008. THE A SSESSEE CONTENDED THAT NO BOOKS OF ACCOUNTS WERE REJECTED BY THE AO BEFORE REFERRIN G THE PROPERTY TO THE VALUATION CELL U/S 142 A OF THE ACT. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A), WHO ALSO CONFIRMED ACTION OF THE AO. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND GON E THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE PRODUCED BOO KS OF ACCOUNTS, BANK STATEMENTS AND SUPPORTING EVIDENCES AND RECORDED THE PURCHASE TRANSACTIONS IN ITS BOOKS OF ACCOUNTS. I.E. SALE CONSIDERATION AS RECORDED IN SA LE DEED AT RS.15 LAKHS. THERE IS NO WHISPER IN THE ASSESSMENT ORDER ABOUT REJECTION OF THE BOOKS OF ACCOUNTS AND EVEN THERE IS NO DOUBT IN THE MIND OF THE AO THAT THE VA LUE DECLARED IN THE SALE DEED AND REGISTERED, IS LOWER THAN THE MARKET VALUE. HERE WE ARE GUIDED BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT (2011) 241 CTR (SC) 179 WHEREIN HONBLE APEX COURT HAS HELD THAT THE ASSESS ING AUTHORITY CANNOT REFER THE 3 MATTER TO THE DVO WITHOUT REJECTING BOOKS OF ACCOUN T. HONBLE APEX COURT IN ITS JUDGMENTS OBSERVED IN PARA 4 AS UNDER :- 4. IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL DECIDED THE MATTER RIGHTLY IN FAVOUR OF THE ASSESSEE IN AS MUCH AS THE TRIBUNAL C AME TO THE CONCLUSION THAT THE ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO THE DVO WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED. IN THE PRESENT CASE, A CATEGORICAL FINDING IS RECORDED BY THE TRIBUNAL THAT THE BOOKS WERE NEV ER REJECTED. THIS ASPECT HAS NOT BEEN CONSIDERED BY THE HIGH COURT. IN THE CIRCU MSTANCES, RELIANCE PLACED ON THE REPORT OF THE DVO WAS MISCONCEIVED. AS THE PRINCIPLE LAID DOWN BY APEX COURT THAT WITHO UT REJECTING BOOKS OF ACCOUNT THE MATTER COULD NOT HAVE BEEN REFERRED TO THE VALUATIO N CELL, IN THE PRESENT CASE FACTS ARE CLEAR THAT THE AO HAS NOT REJECTED BOOKS OF ACCOUNT AND REFERRED THE MATTER TO THE VALUATION U/S 142A TO DETERMINE THE FAIR MARKET VAL UE OF PROPERTY. IN OUR VIEW, AO CANNOT DO THE SAME. RESPECTFULLY FOLLOWING THE DECI SION OF HONBLE APEX COURT IN THE CASE OF SARGAM CINEMA (SUPRA), WE ALLOW THE APPEAL OF THE ASSESSEE AND THE ORDERS OF THE LOWER AUTHORITIES ARE QUASHED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 05.08.2011 SD/- SD/- [ .., ] [ '!, ' ] [ S.V.MEHROTRA ] [ MAHAVIR SI NGH ] ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (1 1 1 1) )) ) DATE: 05.08.2011 R.G.(.P.S.) 0 . ,''2 32'4- COPY OF THE ORDER FORWARDED TO: 1 . SHRI ASIM KUMAR MITRA, 19B, JUSTICE DWARAKANATH ROA D, KOLKATA-700020. 2 THE A.C.I.T., CENTRAL CIRCLEII, KOLKATA. 3 . THE CIT, 4. THE CIT(A)-CENTRAL-III, KOLKATA 5 . DR, KOLKATA BENCHES, KOLKATA -2 ,'/ TRUE COPY, 0%:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES