M/s. Gujarat Hi-Flow Yarn Ltd., Surat V. The Income tax Officer,Ward-1(2), Surat

ITA 2189/AHD/2012

• Counselvise Citation: 218920514 RSA 2012
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 03-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: R K MAL
• Keywords: Sale consideration of property below Jantri Value; Depreciation; Wrong claim; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER I.T.A. NO.2189/AHD/2012 A.Y. 2005-06 GUJARAT HI-FLOW YARN LTD. BLOCK NO.201/P, PLOT NO.1, VILL: KARANJ, KIM MANDVI ROAD, TAL: MANDVI, SURAT-394110 PAN-AAACG8701B APPELLANT VS. THE INCOME TAX OFFICER, WARD-1(2) SURAT RESPONDENT DEPARTMENT BY : SHRI Y.P. VERMA, SR. D.R. ASSESSEE BY : SHRI R.K. MALPANI, A.R. DATE OF HEARING : 30.11.2012 DATE OF PRONOUNCEMENT : 14.12.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-1, SURAT DATED 23.08.2012. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUND OF APPEA L:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PEN ALTY U/S 271(1)(C ) OF THE I.T. ACT, 1961 IN RELATION TO THE ADDITION MADE OF RS.31,81,130/- U/S 69B OF THE ACT ON THE BASIS OF D .V.OS VALUATION REPORT. 3. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. MADE FOLLOWING ADDITIONS:- 1. WRONG CLAIM OF DEPRECIATION AT ENHANCED RATE R S.11,00,000/- 2. SUPPRESSED PRODUCTION DUE TO LOW OIL GAIN RS. 34,707/- 3. UN-EXPLAINED INVESTMENT IN LAND & BUILDING RS. 31,81,130/- TOTAL OF ADDITION/DISALLOWANCE MADE IN THE ASSESSME NT ORDER RS.43,15,853/- I.T.A. NO.2189/AHD/2012 A.Y. 2005-06 2 SUBSEQUENTLY, PENALTY OF RS.15,10,543/- WAS IMPOSE D ON CONCEALED INCOME OF RS.43,15,837/- IN RESPECT OF THE ABOVE AD DITIONS AS IN APPEAL ALSO LD. CIT(A) CONFIRMED THE ABOVE ADDITIONS. ASSESSEE WENT IN APPEAL AGAINST THE PENALTY ORDER OF THE A.O. AND LD. CIT(A) DELETE D THE PENALTY IMPOSED ON THE ADDITION OF RS.11/- LACS AS ADDITION OF THIS AM OUNT ON ACCOUNT OF DEPRECIATION WAS DELETED BY HONBLE ITAT VIDE ITS O RDER DATED 07.01.2011 IN ITA NO.3001/AHD/2008. AS REGARDS THE SECOND ADDITI ON OF RS.34,707/-, THE PENALTY LEVIED WAS ALSO DELETED CONSIDERING THE QUA NTUM OF ADDITION. AS REGARDS THE THIRD ADDITION OF RS.31,81,130/- U/S 69 B THE PENALTY IMPOSED BY THE A.O. HAS BEEN CONFIRMED BY LD. CIT(A) DESPITE T HE FACT THAT THE MATTER IN RESPECT OF THIS ADDITION HAS BEEN RESTORED BY THE H ONBLE ITAT TO THE FILE OF LD. CIT(A) IN QUANTUM PROCEEDING VIDE ORDER DATED 07.01 .2011 IN ITA NO.3001/AHD/2008 BY OBSERVING AS UNDER:- SO FAR AS THE DECISIONS RELIED ON BY THE LD. A.R. ARE CONCERNED, WE ARE OF THE VIEW THAT RELIANCE THEREON ARE MISCONCEI VED. THE DECISION DATED 18.06.2010 IN FOREMOST FINVEST PRIVA TE LIMITED IN ITA NO.2826/AHD/2008 FOR THE ASSESSMENT YEAR 2005-0 6 WAS ON THE ISSUE WHETHER ADDITION UNDER SECTION 50C COULD BE MADE. SO FAR AS THE ADDITION UNDER SECTION 69B IS CONCERNED, THE FINDING IS THAT THERE SHOULD BE SOME EXTRA AMOUNT PAID. IN TH E PRESENT CASE, NOT MENTIONING IN THE SALE DEED OF THE FACT OF SUPE R STRUCTURE ALSO SOLD WHICH IS NOT FINALLY DISMANTLED CLEARLY SHOWS THAT THERE WAS AN UNDERHAND DEALING FOR SUPER STRUCTURE. IF SUPER ST RUCTURE WAS DILAPIDATED AND WAS OF NO USE, IT WAS REQUIRED TO B E DISMANTLED BUT NOT TO REPAIRED. THE FACT THAT IT WAS REPAIRED AND EXTENDED SHOWS THAT IT HAD A VALUE FOR WHICH THE VENDORS MUST HAVE BEEN COMPENSATED. IT IS NOT A CASE THAT THERE WAS ONLY TRANSACTION IN RESPECT OF LAND ONLY. FOR THE LAND PRICES ARE SHOW N IN THE SALE DEED, BUT FOR THE SUPER STRUCTURE PASSED ON TO THE ASSESSEE NOTHING IS SHOWN. THIS IS ENOUGH FOR THE ASSESSING OFFICER TO ACQUIRE JURISDICTION FOR MAKING REFERENCE UNDER SECTION 142 A AS PER THE AUTHORITIES RELIED ON BY THE ASSESSEE. IN ANY CASE , THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CANNOT BE SUSTAINED AS SUCH AS IT HAS NOT CONSIDERED SEVERAL ISSUES INCLUDING THE EXAMINATION OF DVO AND THE VALUATION MADE BY HI M. WE, THEREFORE, RESTORE THE MATTER TO THE FILE OF LEARNE D COMMISSIONER OF INCOME TAX (APPEALS), WHO WILL EXAMINE THE DVO, COM PARE VARIOUS I.T.A. NO.2189/AHD/2012 A.Y. 2005-06 3 ITEMS MENTIONED BY HIM IN HIS REPORT FOR VALUING TH E PROPERTY, FIND OUT FROM THE ASSESSEE AND FROM THE ASSESSING OFFICE R THE EXTENT OF SUPER STRUCTURE PASSED ON TO THE ASSESSEE, TAKING I NTO THE ACCOUNT OF JANTRI RATE AND THE RATE ADOPTED BY THE DVO AND WORK OUT THE MARKET RATE OF THE PLOT AND ALSO VALUE OF THE SUPER STRUCTURE PASSED ON TO THE ASSESSEE AND REASONABLY WORK OUT THE UNDI SCLOSED INVESTMENT MADE BY THE ASSESSEE IN THE PURCHASE. A CCORDINGLY, WE RESTORE THE MATTER TO THE FILE OF LEARNED COMMISSIO NER OF INCOME TAX (APPEALS), WHO WILL DECIDE THE ISSUE AFRESH AS OBSERVED ABOVE. 4. SINCE IN QUANTUM APPEAL THE MATTER HAS BEEN REST ORED BACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION, THE PENALTY P ROCEEDINGS ARE ALSO RESTORED BACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATI ON. WE HOLD ACCORDINGLY. 5. IN THE RESULT, THIS APPEAL IS ALLOWED FOR STATIS TICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 14.12.2012 SD/- SD/- (T.R. MEENA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD