DCIT, Central Circle - 2, Hyderabad V. M/s Tourist India Convention & Hotel Pvt. Ltd., Hyderabad

ITA 221/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1359 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 13-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKARA RAO
• Assessee Lawyers: AJAY GANDHI
• Keywords: Unexplained investment; Valuation report
• Section: 133A; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNA L HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 221/HYD/2012 ASSESSMENT YEAR 2007-08 THE DEPUTY CIT CENTRAL CIRCLE-2 HYDERABAD VS. M/S. TOURIST INDIA CONVENTION & HOTEL PVT. LTD., HYDERABAD PAN: AACCT6140P APPELLANT RESPONDENT APPELLANT BY: SRI D. SUDHAKARA RAO RESPONDENT BY: SRI AJAY GANDHI DATE OF HEARING: 11 .0 3 .2013 DATE OF PRONOUNCEMENT: 11 .0 3 .2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), GUNTUR DATED 7.1.2011 FOR ASSE SSMENT YEAR . 2. THE REVENUE RAISED THE FOLLOWING GROUNDS: (A) THE CIT(A) OUGHT TO HAVE HELD THAT THE MARKET VALUE OF THE PROPERTY IS IN ACCORDANCE WITH THE VALUATION OF APPROVED VALUER AND HENCE IT HAS BEEN SHOWN AT EXORBITANTLY LOW VALUE IN THE BOOKS OF ACCOUNT. (B) THE CIT(A) OUGHT TO HAVE HELD THAT THERE IS UNEXPLAINED INVESTMENT U/S. 69 AND BASED ON THE VALUATION REPORT FOUND DURING THE COURSE OF SURVEY AMOUNTING TO RS. 5,72,06,395. 3. BRIEF FACTS OF THE CASE ARE THAT SEARCH & SEIZURE OPERATIONS U/S 132 OF THE IT ACT, WERE CONDUCTED ON 12.12.2007 IN THE CASE OF SRI PRATAP JADEJA, PROP. NIMANTRAN CATE RERS AND MANAGING DIRECTOR OF THE ASSESSEE COMPANY. DURING THE COURSE OF IT A NO. 221/HYD/2012 M/S. TOURIST INDIA CONVENTION & HOTEL PVT. LTD. ======================== 2 SEARCH & SEIZURE OPERATIONS, THE ASSESSEE'S BUSINES S PREMISES WERE ALSO COVERED U/S 133A OF THE IT ACT AND CERTAI N DOCUMENTARY EVIDENCE PERTAINING TO UNEXPLAINED INVESTMENTS WERE FOUND AND IMPOUNDED. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE A.Y. 2007-08 ON 31.10.2007, ADMITTING LOSS OF R S. 17,02,834. THE ASSESSEE HAS STARTED A HOTEL AT STATION ROAD, K ACHIGUDA, HYDERABAD. IT IS SEEN FROM THE VALUATION REPORT IMP OUNDED THAT THE GOVT. APPROVED VALUER HAS VALUED THE TOTAL VALU E OF THE HOTEL COMPLEX I.E., FIXED ASSETS INCLUDING BUILDING AND M ACHINERY AT RS. 9,77,22,500. HOWEVER, THE ASSESSEE COMPANY HAS DISC LOSED ONLY RS. 4,05,16,105/- AS THE VALUE OF FIXED ASSETS IN T HEIR RETURN OF INCOME. THE ASSESSING OFFICER, WHILE COMPLETING TH E ASSESSMENT ADDED THE DIFFERENCE IN THE VALUE ADMITTED BY THE A SSESSEE AND THE VALUE ESTIMATED BY THE GOVT. VALUER AS UNEXPLAINED INVESTMENT U/S. 69 OF THE IT ACT. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE ADDITION IS BASED ON THE VALUATION REPORT FOUND DURING THE COURSE OF SURVEY OPERATION. IN OUR OPINION, VALUATION REPORT FOUND DURING THE COURSE OF SURVEY CANNOT BE A BASIS FOR ADDITION. T HE TRIBUNAL/COURTS AGAIN AND AGAIN ARE HOLDING THAT VA LUATION REPORT IS JUST AN INFORMATION. ADDITION CANNOT BE BASED ON IT. THERE SHOULD BE SOME MORE MATERIAL TO SUBSTANT IATE THE ADDITION. FURTHER, IN OUR OPINION, THE ASSESSING O FFICER IS NOT ABLE TO FIND ANY DEFECT IN THE BOOKS OF ACCOUNT OR ANY OTHER EVIDENCE TO JUSTIFY THE PLEA THAT THERE IS UNACCOUN TED INVESTMENT IN THE LANDED PROPERTY. IT IS NOT ENTITLED TO REFE R TO SOME VALUATION REPORT SUBMITTED TO THE BANK FOR THE PURPOSE OF AVA ILING LOAN AND MAKE ANY ADDITION ON THAT BASIS. IT WAS HELD IN TH E CASE OF CIT V. NAVEEN GERA (328 ITR 516) (DELHI) THAT THE OPINION OF DISTRICT VALUATION OFFICER, PER SE, WAS NOT AN INFORMATION A ND COULD NOT BE IT A NO. 221/HYD/2012 M/S. TOURIST INDIA CONVENTION & HOTEL PVT. LTD. ======================== 3 RELIED UPON IN THE ABSENCE OF OTHER CORROBORATIVE E VIDENCE. FURTHER, IN THE CASE OF CIT VS. PRATAPSINGH AMROSIN GH RAJENDERSINGH (200 ITR 788) (RAJ), ITO VS. SETHNA I CE & COLD STORAGE (9 TTJ 537), CIT VS. PRAVEENCHANDRA GIRIDHA RILAL (63 TTJ 357); ACIT VS. RADHEY SHYAM BANSAL (68 TTJ 136) (RA JKOT) SIMILAR VIEW HAS BEEN TAKEN. ACCORDINGLY, WE ARE I NCLINED TO CONFIRM THE DELETION OF ADDITION BY THE CIT(A). 5. IN THE RESULT, REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11 TH MARCH, 2013. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 11 TH MARCH, 2013 TPRAO COPY FORWARDED TO: 1. THE DEPUTY CIT, CENTRAL CIRCLE - 2, 7 TH FLOOR, AAYAKAR BHAVAN, L.B. STADIUM ROAD, BASHEERBAGH, HYDERABAD-500 004. 2. M/S. TOURIST INDIA CONVENTION & HOTEL PVT. LTD., 3 - 4 - 1081, KACHIGUDA RAILWAY STATION ROAD, HYDERABAD. 3. THE CIT(A), GUNTUR. 4. THE CIT (CENTRAL), HYDERABAD. 5. THE DR B BENCH, ITAT, HYDERABAD.