ACIT, Circle - 50, Kolkata, Kolkata V. Kabita Das (Saha), Kolkata

ITA 2175/KOL/2010

• Counselvise Citation: 217523514 RSA 2010
• Duration Of Justice: 4 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 07-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BISWAS
• Assessee Lawyers: P J BHIDE; DR SOMNATH GHOSH F
• Keywords: Unexplained investment; Fair market value; Valuation report
• Section: 143(3); 263

Judgement Text

I.T.A. NO. 2175/KOL./2010 ASSESSMENT YEAR: 2005-2006 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 2175/KOL/ 2010 ASSESSMENT YEAR : 2005-2006 ASSISTANT COMMISSIONER OF INCOME TAX,.............. .............APPELLANT CIRCLE-50, KOLKATA, 169, A.J.C. BOSE ROAD, 9 TH FLOOR, KOLKATA-700 014 -VS.- MRS. KABITA DAS (SAHA),............................ .........................RESPONDENT 7/2, SHORT STREET, FLAT 4A, 4 TH FLOOR, KOLKATA-700 017 [PAN : AJEPS 0855 N] APPEARANCES BY: SHRI M.K. BISWAS, JCIT, FOR THE DEPARTMENT SHRI P.J. BHIDE, FCA AND DR. SOMNATH GHOSH, FCA , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : NOVEMBER 26, 2015 DATE OF PRONOUNCING THE ORDER : NOVEMBER 30, 2015 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, KOLKATA DATED 30.07.2010 FOR THE ASSESSMENT YEAR 2005-06. 2. IN GROUND NO. 1 OF THIS APPEAL, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE ADDI TION OF RS.1,49,04,888/- MADE BY THE ASSESSING OFFICER UNDER SECTION 69B TO THE TOTAL INCOME OF THE ASSESESE ON THE BASIS OF DVOS REPORT. I.T.A. NO. 2175/KOL./2010 ASSESSMENT YEAR: 2005-2006 PAGE 2 OF 7 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 31.10.2005 DECLARING TOTAL INCOME OF RS.3,96,64,300/-. IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 31.12.2007, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESS ING OFFICER AT RS.4,04,09,710/-. THE RECORD OF THE SAID ASSESSMENT CAME TO BE SUBSEQUENTLY EXAMINED BY THE LD. CIT AND ON SUCH EX AMINATION, HE FOUND THAT THE CLAIM OF THE ASSESSEE OF HAVING MADE INVES TMENT IN PURCHASE OF COMMERCIAL PROPERTY IN THE BUILDING KNOWN AS READY MONEY TERRACE AT 167, DR. ANNIE BESANT ROAD, WORLI, MUMBAI FOR AN AP PARENT CONSIDERATION OF RS.1,50,00,000/- VIDE TRANSFER DEED DATED 24.12. 2004, WAS ACCEPTED BY THE ASSESSING OFFICER IGNORING THE FACT THAT THE VALUE OF THE SAID PROPERTY FOR STAMP DUTY PURPOSE WAS ADOPTED BY THE REGISTRATION AUTHORITY AT RS.2,40,14,500/-. HE, THEREFORE, TREAT ED THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) AS ER RONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE VIDE HIS ORDER PASSED UNDER SECTION 263 AND DIRECTED THE ASSESSING OFFICER TO M AKE THE ASSESSMENT AFRESH AFTER MAKING A REFERENCE TO THE DVO FOR ASCE RTAINING THE EXACT MARKET VALUE OF THE PROPERTY PURCHASED BY THE ASSES SEE. AS PER THE DIRECTION OF THE LD. CIT, A REFERENCE WAS MADE BY T HE ASSESSING OFFICER TO THE DVO, WHO IN HIS REPORT SUBMITTED TO THE ASSESSI NG OFFICER ESTIMATED THE VALUE OF PROPERTY PURCHASED BY THE ASSESSEE AT RS.2,99,04,888/-. ALTHOUGH THE ASSESSEE RAISED BEFORE THE ASSESSING O FFICER VARIOUS OBJECTIONS IN RESPECT OF THE VALUATION SO DETERMINE D BY THE DVO, THE ASSESSING OFFICER OVERRULED THE SAME AND MADE AN AD DITION OF RS.1,49,04,888/- UNDER SECTION 69B TO THE TOTAL INC OME OF THE ASSESSEE ON THE BASIS OF THE VALUATION OF THE PROPERTY OF THE A SSESSEE AS DETERMINED BY THE DVO IN THE ASSESSMENT COMPLETED UNDER SECTIO N 143(3) READ WITH SECTION 263 VIDE AN ORDER DATED 31.12.2009. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) READ WITH SECTION 263, AN APPEAL WAS PREFERR ED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THEREIN, INTER ALIA, THE ADDITION I.T.A. NO. 2175/KOL./2010 ASSESSMENT YEAR: 2005-2006 PAGE 3 OF 7 MADE BY THE ASSESSING OFFICER UNDER SECTION 69B ON THE BASIS OF THE DVOS REPORT. 4. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE AS SESSEE AND PERUSING THE RELEVANT MATERIAL ON RECORD, THE LD. C IT(APPEALS) DELETED THE SAID ADDITION MADE BY THE ASSESSING OFFICER FOR THE FOLLOWING REASONS GIVEN IN HIS IMPUGNED ORDER:- I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE ASSESSEE IN THIS REGARD. HERE IT WOULD BE RELEVANT TO HAVE LOOK AT THE PROVISIONS OF SECTION 69B OF THE ACT TO APPRECIATE TO ISSUE UNDER CONSIDERATION. THE SEC TION 69B OF THE ACT ALSO READS AS FOLLOWS: 'WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE, AND THE ASSESS ING OFFICER FINDS THAT THE AMOUNT EXPENDED ON MAKING SU CH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY T HE ASSESSEE FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR T HE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER, SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR.' FOR SECTION 69B TO BECOME OPERATIVE THE ASSESSING O FFICER SHALL FIND THAT THE AMOUNT EXPENDED ON MAKING INVES TMENT EXCEEDED THE AMOUNT THAT IS RECORDED IN THAT BEHALF IN HIS BOOKS OF ACCOUNT AND THE ASSESSEE OFFERS NO EXPLANATION A BOUT SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY IN THE OPINION OF THE A.O. IN THE INST ANT CASE THE DECISION THAT THE AMOUNT EXPENDED ON PURCHASE OF TH E FLAT AT MUMBAI BY THE ASSESSEE EXCEEDED THE AMOUNT RECORDED BY HER IN HER BOOKS OF ACCOUNT WAS ARRIVED BY THE A. O. MAINL Y ON THE BASIS OF THE REPORT OF THE DEPARTMENTAL VALUATION OFFICER . HOWEVER, IT MAY BE MENTIONED HERE THAT THE ASSESSEE , DURING THE APPELLATE PROCEEDINGS PRODUCED A COPY OF A VALUATION REPORT FROM A CHARTERED ENGINEER IN RESPECT OF THE PROPERTY IN CONSIDERATION. SUCH VALUATION REPORT WAS 'SENT TO T HE A.O. FOR HIS COMMENTS, WHICH HE DID NOT FURNISH TILL THE TIME OF PASSING OF THIS ORDER DESPITE SEEKING EXTENSION OF TIME. THE ISSUE WHETHER THE ADDITION SOLELY ON THE BASIS OF THE REPORT OF DVO WAS JUSTIFIED OR NOT HAS BEEN CONSIDE RED BY THE I.T.A. NO. 2175/KOL./2010 ASSESSMENT YEAR: 2005-2006 PAGE 4 OF 7 HON'BLE ITAT (DELHI) IN K.J. ARORA VS. DCIT (2009) 180 TAXMAN 131(DELHI) (NAG). IN THAT CASE THE ASSESSEE, ALONG WITH TWO OTHER EO-OWNERS, WAS CONSTRUCTING A HOUSE. IN THE RELEVAN T ASSESSMENT YEAR, HE HAD FILED COMPLETED DETAILS OF CONSTRUCTIO N EXPENSES ALONG WITH THE VALUATION REPORT OF A REGISTERED VAL UER. THE ASSESSING OFFICER, HOWEVER, REFERRED THE VALUATION OF COST OF CONSTRUCTION TO DVO, WHO VALUED THE COST OF PROPERT Y AT A HIGHER FIGURE. DIFFERENCE IN COST OF INVESTMENT IN PROPERT Y WAS ADDED TO THE ASSESSEE'S INCOME AS UNEXPLAINED INVESTMENT UND ER SECTION 69B. THE COMMISSIONER (APPEALS) DELETED ADDITION HO LDING THAT THE ADDITION WAS MADE ONLY ON THE BASIS OF REPORT O F DVO WHICH WAS A MERE ESTIMATE AND CANNOT BE TAKEN AS GOSPEL T RUTH, MORE SO WHEN DETAILS REGARDING ACTUAL EXPENDITURE WERE A VAILABLE IN WHICH NO DISCREPANCY WAS FOUND. THE HON'BLE COURT H ELD THAT THE COMMISSIONER (APPEALS) WAS JUSTIFIED IN DELETING TH E ADDITION. THE HON'BLE ALLAHABAD HIGH COURT IN CIT V. B.K. AGA RWAL (183 TAXMAN 434) HAS HELD THAT MERELY ON THE BASIS OF TH E OPINION OF THE DEPARTMENTAL VALUER, IN THE ABSENCE OF ANY SPEC IFIC MATERIAL, IT CANNOT BE INFERRED THAT ANY EXPENDITURE HAD BEEN INCURRED TOWARDS COST OF CONSTRUCTION OR RENOVATION DURING T HE PERIOD. IN SMT. AMAR KUMARI SURANA VS. CIT (1996) 89 TAXMAN 544 (RAJ) THE HON'BLE COURT HELD THAT MERELY ON THE BASIS OF FAIR MARKET VALUE NO ADDITION CAN BE MADE UNDER SECTION 69B, BUT IF ON THE BASIS OF SUFFICIENT MATERIAL ON RECORD SOME REASONABLE INFERENCE CAN BE DRAWN THAT THE ASSESSEE HAS INVEST ED MORE AMOUNT IN PURCHASE OF PLOT THAN THAT SHOWN IN ACCOU NT BOOKS, THEN ONLY THE ADDITION UNDER SECTION 69B CAN BE MAD E. THE BURDEN IS ON THE REVENUE TO PROVE THAT REAL INVESTM ENT EXCEEDED THE INVESTMENT SHOWING IN ACCOUNT BOOKS OF THE ASSE SSEE. IN THE INSTANT CASE THE A.O. HAS NOT BROUGHT ANYTHI NG ANY RECORD, EXCEPT THE REPORT OF THE DVO THAT ANY CONSI DERATION OVER AND ABOVE THE CONSIDERATION RECORDED IN THE DEED OF SALE IN RESPECT OF THE FLAT PURCHASED BY HER AT MUMBAI WAS ACTUALLY PAID BY HER. THEREFORE, IN THE LIGHT OF THE ABOVE REFERR ED TO JUDICIAL AUTHORITIES OF . AMAR KUMARI SURANA VS. CIT (SUPRA) , CIT V. B.K. AGARWAL (SUPRA) AND K.J. ARORA VS. DCIT (SUPRA), IN MY OPINION, THE A.O: WAS NOT JUSTIFIED IN MAKING THE IMPUGNED A DDITION OF RS.1,49,04,888/- U/S.69B OF THE ACT, SOLELY ON THE BASIS OF THE DVO'S REPORT. ACCORDINGLY, THE SAID ADDITION IS DEL ETED. 5. AT THE TIME OF HEARING BEFORE US, THE LD. D.R. S TRONGLY RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT T HE FAIR MARKET VALUE OF THE PROPERTY PURCHASED BY THE ASSESSEE BEING ON THE HIGHER SIDE THAN WHAT WAS DISCLOSED BY THE ASSESSEE AS ESTABLISHED O N THE BASIS OF DVOS REPORT, THE DIFFERENCE WAS RIGHTLY ADDED BY THE ASS ESSING OFFICER TO THE I.T.A. NO. 2175/KOL./2010 ASSESSMENT YEAR: 2005-2006 PAGE 5 OF 7 TOTAL INCOME OF THE ASSESSEE UNDER SECTION 69B BEIN G UNEXPLAINED INVESTMENT. HE CONTENDED THAT THE LD. CIT(APPEALS), HOWEVER, COMPLETELY BRUSHED ASIDE THE DVOS REPORT WHILE ALLOWING RELIE F TO THE ASSESSEE ON THIS ISSUE, WHICH IS NOT JUSTIFIED. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, STRONGLY SUPPORTED THE IMPUGNED ORDER OF THE LD. CIT(APPEALS ) AND SUBMITTED THAT BESIDES THE JUDICIAL PRONOUNCEMENT RELIED UPON BY T HE LD. CIT(APPEALS) TO ALLOW RELIEF TO THE ASSESSEE ON THE ISSUE UNDER CON SIDERATION, THERE IS A DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS.- PUNEET SABHARWAL REPORTED IN 338 ITR 485, WHICH FURTHER SU PPORTS THE DECISION OF THE LD. CIT(APPEALS). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE IMPUGNED ADDITION UNDER SECTION 69B ON ACCOUNT OF THE ALLEGE D UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE IN THE PURCHASE OF COMMERCIAL PROPERTY AT MUMBAI WAS MADE BY THE ASSESSING OFFICER ONLY ON THE BASIS OF DVOS REPORT, WHEREIN THE FAIR MARKET VALUE OF THE PROPER TY WAS ESTIMATED BY THE DVO ON HIGHER SIDE THAN THE APPARENT CONSIDERAT ION SHOWN BY THE ASSESSEE. BESIDES THE DVOS REPORT, THERE WAS NOTHI NG BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT ANY SUM OVER AND ABOVE WHAT WAS DECLARED BY THE ASSESSEE AS CONSIDERATION IN RELEVA NT AGREEMENT WAS PAID BY THE ASSESSEE FOR THE PURCHASE OF THE PROPERTY AN D THIS POSITION HAS NOT BEEN DISPUTED EVEN BY THE LD. D.R. AT THE TIME OF H EARING BEFORE US. AS HELD IN THE VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER AND ALSO BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- PUNEET SABHARWAL (SU PRA) CITED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ADDITION MADE ONLY ON THE BASIS OF THE DVOS REPORT WITHOUT THERE BEING ANYTHING BROUGHT ON RECO RD TO SHOW THAT ANY CONSIDERATION OVER AND ABOVE THE CONSIDERATION RECO RDED IN THE RELEVANT AGREEMENT WAS ACTUALLY PAID BY THE ASSESSEE, IS NOT SUSTAINABLE. KEEPING IN VIEW THE RATIO OF THESE JUDICIAL PRONOUNCEMENTS AND HAVING REGARD TO I.T.A. NO. 2175/KOL./2010 ASSESSMENT YEAR: 2005-2006 PAGE 6 OF 7 THE FACTS OF THE CASE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 69B SOLE LY ON THE BASIS OF THE DVOS REPORT AND UPHOLDING THE SAME, WE DISMISS GRO UND NO. 1 OF THE REVENUES APPEAL. 8. AS REGARDS GROUND NO. 2 OF THE REVENUES APPEAL, IT IS OBSERVED THAT THE ISSUE RAISED THEREIN RELATING TO THE ADDITION M ADE TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF DEEMED RENTAL INCOME IS NOT DIRECTLY ARISING FROM THE IMPUGNED ORDER OF THE LD. CIT(APPEALS). AS STATED BY THE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER, THIS ADDITION, IN FACT, WAS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE AS SESESE IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3 ) VIDE AN ORDER DATED 31.12.2007 AND THIS ISSUE, THEREFORE, WAS INV OLVED IN THE APPEAL EMANATING FROM THE ORDER UNDER SECTION 143(3) AND NOT FROM THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) READ WITH SECTION 263. THIS ISSUE THUS WAS TREATED BY THE LD. CIT(APP EALS) AS INFRUCTUOUS IN HIS IMPUGNED ORDER AND HAVING REGARD TO THE FACTS O F THE CASE, WE FIND NO INFIRMITY THEREIN. GROUND NO. 2 OF THE REVENUES AP PEAL IS ACCORDINGLY DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 30, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 30 TH DAY OF NOVEMBER, 2015 ORDER PRONOUNCED BY SD/- SD/- (S.S.V.R.) (W.A.) J.M. A.M. COPIES TO : (1) MRS. KABITA DAS (SAHA), 7/2, SHORT STREET, FLAT 4A, 4 TH FLOOR, KOLKATA-700 017 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-50, KOLKATA, 169, A.J.C. BOSE ROAD, KOLKATA-700 014 I.T.A. NO. 2175/KOL./2010 ASSESSMENT YEAR: 2005-2006 PAGE 7 OF 7 (3) COMMISSIONER OF INCOME-TAX-KOLKATA-XXXII, KOL KATA (4) CIT, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.