Hotel Yogendra, Jharsuguda V. ITO, Jharsuguda

ITA 175/CTK/2010

• Counselvise Citation: 17522114 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 29-11-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 10-05-2010
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: D PATI
• Keywords: Valuation report

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 175 AND 176/CTK/2010 (ASSESSMENT YEAR S 1999 - 20 00 AND 2000 - 01 HOTEL YOGENDRA, MAIN ROAD, JHARSUGUDA, PAN: AADFH 6173 L VERS US INCOME - TAX OFFICER, JHARSUGUDA. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI D.PATI, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 29.11.2011 DATE OF PRONOUNCEMENT : 30.11.2011 ORDER SHRI K.K.GUPTA, AM : THE ASSESSEE HAS FILED THESE TWO APPEALS AGAINST ORDER DT.30.11.2009 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) PERTAINING TO THE ASSESSMENTS MADE U/S.144/148 OF THE INCOME - TAX ACT,1961 FOR THE ASSESSMENT YEARS 1999 - 20 00 AND 2000 - 01. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM CARRYING ON HOTEL BUSINESS. THE ASSESSEE MADE INVESTMENTS IN CONSTRUCTION OF HOTEL BUILDING DURING THE FINANCIAL YEAR 1995 - 96 TO 2000 - 01. IN THE ASSESSMENT YEAR 1999 - 2000, IN THE ASSESSMENT MADE U/S.144/148, THE ASSESSING OFFICER BROUGHT TO TAX U/S.69B THE DIFFERENTIAL AMOUNT OF 2,72,643 (I.E., 8,87,249 VALUE ESTIMATED BY THE DVO 4,14,606 VALUE DISCLOSED BY THE ASSESSEE). SIMILARLY, IN THE ASSESSMENT YEAR 2000 - 01, THE ASSESSING OFFICER BROUGHT TO TAX THE DIFFERENTIAL AMOUNT OF 6,87,695 (I.E., 17,33,467 VALUE ESTIMATED BY THE DVO 10,45,772 VALUE DISCLOSED BY THE ASSESSEE). AGGRIEVED, THE ASSESSEE PREFERRED APPEALS BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) AFTER HEARING THE ASSESSEE AND CONSIDERI NG THE FACTS DIRECTED THE ASSESSING OFFICER TO ALLOW 10% REBATE ON ACCOUNT OF PERSONAL SUPERVISION WHILE ESTIMATING THE VALUE OF CONSTRUCTION. HOWEVER, THE SUBMISSION OF THE ASSESSEE BEFORE HIM THAT THE DVO HAD ADOPTED THE CPWD RATES WHEREAS THE 2 RATES TO B E ADOPTED SHOULD HAVE BEEN LOCAL RATES, WAS TURNED DOWN BY THE LEARNED CIT(A) ON THE GROUND THAT NO EVIDENCE IN SUPPORT OF THE CONTENTION THAT THE RATES ADOPTED BY THE DVO WERE HIGH WAS FURNISHED. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. THE LEARNED AR OF THE ASSESSEE CONTENDED THAT THE VALUE OF CONSTRUCTION ADOPTED BY THE DVO WITHOUT CONSIDERING THE COST OF MATERIALS AVAILABLE IN THE LOCAL MARKET AND WITHOUT ALLOWING PROPER SUPERVISING CHARGES IS ILLEGAL AND ARBITRARY. HE SUBMITTED THA T THE LEARNED CIT(A) IS NOT JUSTIFIED IN NOT CONSIDERING THE REGISTERED VALUERS REPORT AND OPWD RATES SUBMITTED BY THE ASSESSEE BEFORE HIM. THEREFORE, HE PRAYED THAT THE MATTER MAY BE RESTORED TO THE ASSESSING OFFICER FOR CONSIDERATION AFRESH THE VALUE OF CONSTRUCTION ON THE BASIS OF REGISTERED VALUERS REPORT AND OPWD RATES. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE IMPUGNED ORDERS OF THE LEARNED CIT(A) AND OPPOSED THE PRAYER OF THE LEARNED AR OF THE ASSESSEE FOR FRESH DETERMINATION OF THE VALUE OF C ONSTRUCTION, SINCE THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS ALLOWED 10% TOWARDS SELF SUPERVISION CHARGES. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD . THE ASSESSEE HAS FILED A PAPER B OOK CONTAINING DETAILS OF INVESTMENT, CPWD RATE CHART, VALUATION REPORT OF REGISTERED VALUER ETC. IT IS NOT DISPUTED BY THE LEARNED DR THAT THE VALUATION REPORT OF THE DVO IS BASED ON CPWD RATES AND WITHOUT GIVING ANY CONCESSION TOWARDS SELF - SUPERVISION CH ARGES. HOWEVER, THE LEARNED CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO GIVE REBATE OF 10% TOWARDS SELF SUPERVISION CHARGES. BUT, IN OUR VIEW NON - CONSIDERATION OF THE COST OF MATERIALS AVAILABLE IN THE LOCAL MARKET AND ALSO THE OPWD RATES AS SUBMITTED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) IS NOT PROPER. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF 3 THE CASE, WE FEEL APPROPRIATE TO SET ASIDE THE IMPUGNED ORDERS OF THE LEARNED CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ESTIMATION OF THE COST OF CONSTRUCTION ON THE BASIS OF OPWD RATES AND ALLOWING PROPER SELF - SUPERVISION CHARGES HAVING DUE REGARD TO THE VALUATION MADE BY THE REGISTERED VALUER AND PASS NECESSARY ORDERS FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION AFT ER DUE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. SD/ - SD/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 30 TH NOVEMBER, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: HOTEL YOGENDRA, MAIN ROAD, JHARSUGUDA, 2. THE RESPONDENT: INCOME - TAX OFFICER, JHARSUGUDA. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.