The ITO, Ward-12(3), Ahmedabad V. Smt. Meenaben M.Ankleshwaria, Ahmedabad

ITA 2159/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6342 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 08-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: P K VYAS
• Keywords: Valuation report
• Section: 69C

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO.2159/AHD/2009 A. Y.: 2004-05 THE INCOME TAX OFFICER, WARD 12(3), ROOM NO.115, 1 ST FLOOR, NARAYAN CHAMBERS, ASHRAM ROAD, AHMEDABAD VS SMT. MEENABEN M. ANKLESHWARIA, F-5, 6, 7 TH FLOOR, MIHIR TOWER, JAWAHAR CHAWOK, MANINNAGAR, AHMEDABAD PA NO. ADHPA 3876 C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ALBINUS TIRKEY, DR RESPONDENT BY SHRI P. K. VYAS, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XX , AHMEDABAD DATED 05 TH MAY, 2009, FOR ASSESSMENT YEAR 2004-05, CHALLENGI NG THE DELETION OF ADDITION OF RS. 1,71,000/- AND DELETION OF ADDITION OF RS.5,94,658/- U/S 69B AND 69C OF THE IT ACT. 2. THE FACTS OF THE CASE ARE THAT BOTH THE ADDITION S WERE CHALLENGED BEFORE THE LEARNED CIT(A). SUBMISSIONS O F THE ASSESSEE WERE FORWARDED TO THE AO FOR HIS COMMENTS WHO HAS F ILED HIS REPORT DATED 22-01-2009 BEFORE THE LEARNED CIT(A). THE LEA RNED CIT(A) CONSIDERING THE SUBMISSIONS DELETED BOTH THE ADDITI ONS. IT WAS NOTED IN THE IMPUGNED ORDER THAT THE ASSESSEE HAS PURCHAS ED LAND AT ITA NO.2159/AHD/2009 ITO, WARD 12(3), AHMEDABAD VS SMT. MEENABEN M. ANKL ESHWARIA 2 RS.3,00,000/- FROM SHRI GIRISHBHAI VINUBHAI AS PER SALE DEED. THE TRANSACTION WAS REFERRED TO THE GOVERNMENT VALUATIO N OFFICER FOR VALUATION WHO HAS VALUED THE LAND AT RS.4,71,000/- AND CONST OF CONSTRUCTION ON THE LAND AT RS.5,94,658/-. THE AO I SSUED SHOW CAUSE NOTICE DATED 22-12-2006 AND ASKED THE ASSESSEE WHY THE DIFFERENCE OF COST OF LAND OF RS.1,71,000/- AND COST OF CONSTR UCTION OF RS.5,94,658/- SHOULD NOT BE ADDED TO THE TOTAL INCO ME AS INVESTMENT OUT OF UNDISCLOSED SOURCES. ACCORDING TO THE AO, TH E ASSESSEE DID NOT FURNISH REPLY BY 28-12-2006 BY 12 NOON; THEREFO RE, BOTH THE ADDITIONS WERE ACCORDINGLY MADE. THE ADDITIONS WERE CHALLENGED BEFORE THE LEARNED CIT(A) AND IT WAS SUBMITTED THAT THE AO HAS REFERRED THE MATTER TO THE VALUATION OFFICER IN THE MONTH OF OCTOBER, 2006 AND THE VALUATION OFFICER INSPECTED THE PROPER TY ON 02-11-2006 AND SUBMITTED HIS REPORT ON 22-12-2006. THE AO ON T HE SAME DAY ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE ON WHICH T HE ASSESSEE SOUGHT FOR EXTENSION OF TIME TILL 29-12-2006 BUT TH E AO ASKED THE ASSESSEE TO FILE REPLY BY 12 NOON ON 28-12-2006. TH E ASSESSEE FILED REPLY ON 28-12-2006 AT 2.45 PM BUT THE SAME HAS NOT BEEN CONSIDERED BY THE AO CONSIDERING IT TO BE TIME BARI NG CASE. IT WAS SUBMITTED THAT THE AO DID NOT CONSIDER THE REPLY OF THE ASSESSEE WHICH WERE LATE JUST BY ABOUT THREE HOURS DURING OF FICE HOURS. THE AO PASSED THE ORDER WITHOUT GIVING ANY FAIR OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE AND PASSED THE ORDER WITH PREJUDICIAL MIND AND IN HURRY. IT WAS SUBMITTED THAT THE REPORT OF THE VALUATION O FFICER IS WRONG AND AGAINST PRINCIPLE OF FAIR VALUATION. THERE ARE MANY MISTAKES IN THE REPORT OF THE VALUATION WHICH HAVE BEEN EXPLAINED I N THE REPLY DATED 28-12-2006. THE DVO APPLIED INFLATION RATE OF 12% P ER ANNUM ON THE ITA NO.2159/AHD/2009 ITO, WARD 12(3), AHMEDABAD VS SMT. MEENABEN M. ANKL ESHWARIA 3 JANTRI VALUE OF 1999 WHICH IS BASELESS WITHOUT AN Y EVIDENCE. THE ASSESSED ALSO FILED REPORT OF THE GOVERNMENT REGIST ERED VALUER DATED 27-12-2006 WHICH WAS ATTACHED WITH THE REPLY OF THE ASSESSEE DATED 28-12-2006 AND ALL THE FACTS WERE EXPLAINED. THE VALUATION OF THE LAND SHOWN BY THE GOVERNMENT REGISTERED VALUER WAS LESS THAN THE VALUE SHOWN BY THE ASSESSEE AND EVEN BY APPLYIN G INFLATION RATE THE VALUE WAS LESSER AS COMPARED WITH THE VALUATION OF THE DVO. IT WAS, THEREFORE, SUBMITTED THAT ADDITIONS ARE CLEARL Y UNJUSTIFIED. THE LEARNED CIT(A) ACCEPTED THE EXPLANATION OF THE ASSE SSEE AND NOTED THAT NO INDEPENDENT INQUIRY HAS BEEN MADE BY THE AO . THERE IS NO REFERENCE DATE AVAILABLE IN THE REPORT OF THE DVO A ND EVEN IN THE REPORT OF THE DVO NO SUCH DATE IS MENTIONED. EVEN, THE AO IS SILENT IN THE REMAND REPORT. THE ASSESSEE FILED THE REPLY ON 28-12-2006 BUT THE AO FAILED TO CONSIDER THE SAME. THE AO ALSO DID NOT CONSIDER VALUATION REPORT FROM THE GOVERNMENT REGISTERED VAL UER AND MADE THE ADDITIONS WITHOUT ANY JUST CAUSE. THE GOVERNMEN T APPROVED VALUER AFTER CONSIDERING OVER ALL TREND OF THE SALE INSTANCES EXECUTED BETWEEN 2001 TO 2005 AND CONSIDERING THE DIFFERENT TRENDS AND CONSIDERING THE CRITERIA AND BY APPLYING INFLATION PROPERLY VALUED THE PROPERTY, THEREFORE, ADDITION OF RS.1,74,000/- WAS FOUND UNJUSTIFIED AND THE SAME WAS DELETED. FURTHER, THE AO MADE ANO THER ADDITION ON THE BASIS OF THE DVOS REPORT FOR INVESTMENT IN CONSTRUCTION OF HOUSE ON THE LAND PURCHASED IN A SUM OF RS.5,94,658 /-. THE SAID ADDITION WAS CHALLENGED AND IT WAS EXPLAINED BEFORE THE LEARNED CIT(A) THAT ADDITION IS MAINLY MADE ON ACCOUNT OF R EPORT OF THE DVO WITHOUT BRINGING ANY EVIDENCE ON RECORD THAT CONSTR UCTION WAS MADE IN THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEE M AINTAINED ITA NO.2159/AHD/2009 ITO, WARD 12(3), AHMEDABAD VS SMT. MEENABEN M. ANKL ESHWARIA 4 REGULAR BOOKS OF ACCOUNTS AND THE ASSESSEE HAS ALRE ADY INFORMED THE AO VIDE LETTER 05-11-2006 THAT CONSTRUCTION IS MADE IN THE YEAR 2006- 07 BUT WITHOUT MAKING ANY INQUIRY ON THE MATTER ADD ITION IS MADE. THE SAID EXPLANATION WAS ALSO MADE BEFORE THE VALUATION OFFICER AND THE AO WAS WITHIN THE KNOWLEDGE OF THE CONSTRUCTION MAD E IN THE YEAR 2006-07. THE REPLY DATED 28-12-2006 WAS NOT AT ALL CONSIDERED, THEREFORE, ADDITION IS UNJUSTIFIED. THE LEARNED CIT (A) ACCEPTED THE EXPLANATION OF THE ASSESSEE AND NOTED IN THE IMPUGN ED ORDER THAT THE AO HAS NOT MADE ANY INQUIRY BEFORE MAKING THE ADDIT ION AND RELIED UPON ONLY THE DVOS REPORT. THE ASSESSEE HAS ALREAD Y REPLIED BEFORE THE AO PRIOR TO ASSESSMENT THAT CONSTRUCTION IS MAD E IN THE YEAR 2006-07, WHICH IS TOTALLY IGNORED. COPY OF THE SAID LETTER DATED 05-11-2006 WAS ALSO SUBMITTED BEFORE THE LEARNED CI T(A) ALONG WITH COPY OF THE CONTRACT AGREEMENT DATED 08-04-2006 ENT ERED INTO BETWEEN THE ASSESSEE AND SARJAN BUILDERS, WHICH GOE S TO SAY THAT CONSTRUCTION WAS MADE IN THE YEAR 2006-07. EVEN, TH E DVO HAS FAILED TO TAKE NOTE OF SUCH FACTS. THE LEARNED CIT( A), THEREFORE, ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT CONS TRUCTION WAS MADE IN THE YEAR 2006-07 AND NOT IN THE YEAR UNDER CONSIDERATION BECAUSE THE AO HAS NOT DOUBTED THE BOOK ENTRIES OF THE ASSESSEE AND NO DEFECT OF THE SAME HAS BEEN POINTED OUT. THE LEARNED CIT(A) ACCORDINGLY DELETED THE ADDITION OF RS.5,94,658/-. 3. THE LEARNED DR RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. ITA NO.2159/AHD/2009 ITO, WARD 12(3), AHMEDABAD VS SMT. MEENABEN M. ANKL ESHWARIA 5 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW. THE FACTS STATE D IN THE IMPUGNED ORDER HAVE NOT BEEN DISPUTED BEFORE US. NO MATERIAL OR EVIDENCE IS PRODUCED TO REBUT THE FINDINGS OF THE LEARNED CIT(A ). THE ASSESSEE SUBMITTED IN THE REPLY WITH REFERENCE TO THE DVO WA S MADE IN THE MONTH OF OCTOBER, 2006 WHO HAS INSPECTED THE PROPER TY ON 02-11-2006 AND SUBMITTED THE REPORT TO THE AO ON 22 -12-2006. ON THE SAME DAY THE AO CALLED FOR EXPLANATION OF THE A SSESSEE AND GAVE TIME UP TO 12 NOON OF 28-12-2006. THE ASSESSEE FILE D REPLY ON 28-12-2006 AT 2.45 PM. THIS REPLY WAS SUPPORTED BY THE FACTS OF MISTAKES COMMITTED BY THE DVO IN THE REPORT WHICH I S SUPPORTED BY REPORT OF GOVERNMENT REGISTERED VALUER WHICH DISPUT ED THE VALUATION OF THE LAND MADE BY THE DVO. SIMILARLY, THE ASSESSE E EXPLAINED IN THE LETTER DATED 05-11-2006 TO THE AO THAT NO CONST RUCTION IS MADE IN THE YEAR UNDER APPEAL AND THE ASSESSEE MAINTAINED B OOKS OF ACCOUNTS AND DETAILS OF THE CONSTRUCTION ARE AVAILA BLE AND RECORDED IN THE BOOKS OF ACCOUNTS. THEREFORE, IT IS CLEAR THAT EVEN PRIOR TO THE REPORT SUBMITTED BY THE DVO, THE ASSESSEE HAS ALREA DY INTIMATED THAT NO CONSTRUCTION IS DONE IN THE ASSESSMENT YEAR UNDE R APPEAL. THESE REPLIES WERE SUBMITTED WITH THE REPLY OF THE ASSESS EE. BUT THE AO DELIBERATELY IGNORED THE SAME WHILE PASSING THE ASS ESSMENT ORDER. EVEN, THERE IS NO REFERENCE OF THE REPLY OF THE ASS ESSEE IN THE ASSESSMENT ORDER. RATHER, THE AO NOTED THAT THE ASS ESSEE HAS NOT FURNISHED ANY REPLY BUT IN THE GROUNDS OF APPEAL IT IS NOTED THAT THE AO TOOK INTO ACCOUNT THE REPLY OF THE ASSESSEE DATE D 28-12-2006. IT WOULD, THEREFORE, SUPPORT THE FINDINGS OF THE LEARN ED CIT(A) THAT REPLY OF THE ASSESSEE WAS IGNORED. THE ASSESSEE FILED REP ORT OF THE ITA NO.2159/AHD/2009 ITO, WARD 12(3), AHMEDABAD VS SMT. MEENABEN M. ANKL ESHWARIA 6 GOVERNMENT REGISTERED VALUER WHICH HAS GIVEN SALE I NSTANCES AND OTHER RELEVANT CRITERIA FOR VALUATION OF THE PROPER TY AND THE BOOKS OF ACCOUNTS SHOW THAT COST OF CONSTRUCTION IS BOOKED I N THE SUBSEQUENT YEAR WOULD SHOW THAT THE AO WITHOUT BRINGING ANY MA TERIAL ON RECORD AND WITHOUT MAKING ANY INDEPENDENT INQUIRY INTO THE MATTER IN ISSUE MADE THE ADDITION IN HASTE. NO PROPER OPPORTUNITY O F BEING HEARD HAS BEEN GIVEN TO THE ASSESSEE. THE REPLY OF THE ASSESS EE SUPPORTED BY THE REPORT OF THE GOVERNMENT REGISTERED VALUER HAS NOT BEEN TAKEN INTO CONSIDERATION BY THE AO WHILE MAKING THE ADDIT ION. THE LEARNED CIT(A) ON PROPER APPRECIATION OF THE FACTS AND MATE RIAL ON RECORD RIGHTLY REJECTED THE REPORT OF THE DVO. IN THE ABS ENCE OF ANY OTHER MATERIAL FROM THE SIDE OF THE AO, WE DO NOT FIND AN Y JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A) IN D ELETING BOTH THE ADDITIONS. IN THE RESULT, THERE ARE NO MERITS IN BO TH THE GROUNDS OF APPEAL OF THE REVENUE. THE SAME ARE ACCORDINGLY DIS MISSED. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 24-06-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 24-06-2011 LAKSHMIKANT/- ITA NO.2159/AHD/2009 ITO, WARD 12(3), AHMEDABAD VS SMT. MEENABEN M. ANKL ESHWARIA 7 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD