Rajesh Jaiswal, Gorakhpur V. ITO, Gorakhpur

ITA 221/ALLD/2011

• Counselvise Citation: 22120714 RSA 2011
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 01-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: KRISHNA AGARWAL
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.221/ALLD/2011 ASSESSMENT YEAR: 2007-08 SHRI RAJESH JAISWAL, VS. INCOME-TAX OFFICER, R/O HAZARIPUR, GORAKHPUR. WARD 2(2), GORAKHPUR. (PAN : AFPPJ 8554 C). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KRISHNA AGARWAL, ADVOCATE RESPONDENT BY : SHRI Y.P. SRIVASTAVA, D.R. DATE OF HEARING : 02.11.2012 DATE OF PRONOUNCEMENT : 08.11.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 21.01.2010 PASSED BY THE LD. CIT(A)-III, LUCKNOW FOR THE ASSES SMENT YEAR 2007-08. 2. THE SOLE GROUND RAISED BY THE ASSESSEE IS IN RES PECT OF ADDITION OF RS.2,33,300/- SUSTAINED BY THE CIT(A) UNDER SECTION 69B OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) ON ACCOUNT OF INVESTME NT IN CONSTRUCTION OF BUILDING. ITA NO.221/ALLD/2011 A.Y. 2007-08 2 3. THE BRIEF FACT OF THE CASE ARE THAT THE DURING T HE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CON STRUCTED A BUILDING AT GORAKHPUR. THE ASSESSING OFFICER, AFTER CONSIDERIN G THE ASSESSEES SUBMISSION AND AFTER CONSIDERING THE INSPECTORS ENQUIRY REPOR T, FOUND THAT THE ASSESSEE HAS SHOWN LESSER INVESTMENT OF RS.6,97,395/- . THE INS PECTOR IN HIS REPORT ESTIMATED INVESTMENT AT RS.26,97,995/- AGAINST WHICH THE ASSE SSEE HAS DECLARED RS.20 LACS. THE ASSESSING OFFICER MADE ADDITION OF RS.6,97,395/ -. THE CIT(A) SUSTAINED THE ADDITION TO THE EXTENT OF RS.2,33,300/- AFTER MAKIN G CERTAIN ADJUSTMENTS IN THE VALUATION REPORT OF REGISTERED VALUER FURNISHED BY THE ASSESSEE. HOWEVER, THE CIT(A) IN RESPECT OF VALUATION ADOPTED BY THE ASSES SING OFFICER, HAS OBSERVED THAT THE ASSESSING OFFICER DID NOT GIVE ANY JUSTIFICATIO N FOR THE VALUE ADOPTED BY HIM. THE VALUATION MADE BY HIM CANNOT BE ACCEPTED IN ABS ENCE OF ANY REFERENCE UNDER SECTION 142 TO THE DVO. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT T HE ASSESSING OFFICER MADE ADDITION ON THE BASIS OF ESTIMATION REPORT FURNISHE D BY THE INSPECTOR WHO IS NOT AUTHORIZED UNDER THE ACT. THE CIT(A) CONSIDERED TH E REGISTERED VALUERS REPORT FURNISHED BY THE ASSESSEE AFTER CERTAIN ADJUSTMENTS . LEARNED AUTHORISED REPRESENTATIVE SUBMITTED RELYING UPON A JUDGEMENT O F HON'BLE PATNA HIGH COURT IN ITA NO.221/ALLD/2011 A.Y. 2007-08 3 THE CASE OF BIMLA SINGH VS. CIT, 308 ITR 71 (PATNA) WHEREIN IT HAS BEEN HELD THAT DIFFERENCE BETWEEN COST OF CONSTRUCTION ESTIMATED B Y THE ASSESSEE AND VALUER WAS LESS THAN 15%, UNDER THAT CIRCUMSTANCES, NO ADDITIO N IS WARRANTED. AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, FIRSTLY THE ASSESSING OFFICER MADE ADDITION ON THE BASIS OF INSPECTORS REPORT WHICH I S NOT IN ACCORDANCE WITH LAW. THE CIT(A) IGNORED THE BASIS OF ADDITION MADE BY TH E ASSESSING OFFICER AND CONSIDERED ANOTHER BASIS THAT IS VALUATION REPORT F URNISHED BY THE ASSESSEE AFTER CERTAIN ADJUSTMENTS. IN FACT, VALUATION REPORTS AR E THE OPINION OF TECHNICAL PERSON ON ESTIMATION WHICH CANNOT BE SAID TO BE REAL INVES TMENT IN CONSTRUCTION. HOWEVER, CONSIDERING THE PETTY DIFFERENCE IN INVEST MENT SHOWN BY THE ASSESSEE AND ESTIMATION MADE BY THE CIT(A) AND INCORRECT BASIS A DOPTED BY THE ASSESSING OFFICER, WE ARE OF THE VIEW THAT NO ADDITION IS WAR RANTED. WE, THEREFORE, DELETE THE ADDITION OF RS.2,33,300/- SUSTAINED BY THE CIT(A) O R, IN OTHER WORDS, THE ENTIRE ADDITION MADE OF RS.6,97,395/- IS DELETED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* ITA NO.221/ALLD/2011 A.Y. 2007-08 4 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, ALLAHABAD BENCH, ALLAHABAD 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, ALLAHABAD TRUE COPY