K.Prakasha Rao, Chirala V. THE Addl. CIT., Ramge -1., Guntur

ITA 234/VIZ/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8593 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 15-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Keywords: Revision of order
• Section: 69; 148; 263

Judgement Text

ITA NO.234/VIZAG/2014 K. PRAKASHA RAO, CHIRALA IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO.234/VIZAG/2014 ASSESSMENT YEAR : 2007 - 08 K. PRAKASHA RAO CHIRALA VS. THE ADDL. CIT RANGE-1 GUNTUR (APPELLANT) (RESPONDENT) PAN NO.AKXPK 2727K ASSESSEE BY: SHRI G.V.N. HARI, AR REVENUE BY: SMT. D. KOMALI KRISHNA, DR DATE OF HEARING : 04.12.2014 DATE OF PRONOUNCEMENT : 04.12.2014 ORDER PER D. MANMOHAN, VICE PRESIDENT:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX, GUNTUR, IN EXERCISE OF THE POWERS VESTED IN HIM U/S 263 OF THE INCOME-TAX ACT. THE ASSESSEE IS ENGAGED IN THE HANDLOOM CLOTH BUSINESS. ASSESSMENT WAS ORIGINALLY COMPLETED FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE DECLARED TOTAL I NCOME OF RS.2,05,420/- WHICH WAS PROCESSED ACCORDINGLY BUT LATER ON REOPEN ED BY ISSUANCE OF NOTICE U/S 148 OF THE ACT. THEREAFTER THE ASSESSMENT WAS COMPLETED ON TOTAL INCOME OF RS.52,56,294/-. THIS ORDER WAS SOUGHT TO BE REVISED BY THE COMMISSIONER ON THE GROUND THAT THERE IS DIFFERENCE BETWEEN THE COST OF CONSTRUCTION ESTIMATED BY THE VALUATION CELL AND TH E COST OF CONSTRUCTION ADMITTED BY THE ASSESSEE AND THE DIFFERENTIAL AMOUN T OUGHT TO HAVE BEEN ASSESSED TO TAX. AT THIS STAGE, THE ASSESSEE SUBMI TTED THAT IN RESPECT OF THE ASSESSMENT YEAR 2008-09, THE VALUATION MADE BY THE VALUATION CELL WAS CHALLENGED BEFORE THE ITAT AND REQUESTED THE REVISI ONAL AUTHORITY TO KEEP THE MATTER IN ABEYANCE TILL THE DISPOSAL OF THE APPEAL. THE LD. COMMISSIONER HOWEVER PROCEEDED TO DISPOSE OF THE MATTER BY OBSER VING THAT BASED ON THE COST OF CONSTRUCTION VALUED BY THE DVO, THE UNEXPLA INED INVESTMENT OUGHT TO HAVE BEEN BROUGHT TO TAX BY THE AO U/S 69 OF THE AC T AND BY NOT BRINGING THE ITA NO.234/VIZAG/2014 K. PRAKASHA RAO, CHIRALA 2 DIFFERENTIAL AMOUNT TO TAX, THE ORDER PASSED BY THE AO DESERVES TO BE CONSIDERED AS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE. 2. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING, LD. COUNSEL PLACED BEFORE US A COPY OF THE ORDER OF ITA T VISAKHAPATNAM BENCH (ITA NO.299/VIZAG/2011 DATED 25.02.2014) TO SUBMIT THAT THE VISAKHAPATNAM BENCH OF ITAT VIDE PARA-12 OF ITS ORDER HELD THAT T HE VERY REFERENCE TO VALUATION CELL IS BAD IN LAW. SINCE THE VERY BASIS UPON WHICH REVISIONAL PROCEEDINGS WERE SOUGHT TO BE INITIATED WAS SET ASI DE, LD. COUNSEL SUBMITTED THAT THE ORDER PASSED U/S 263 OF THE ACT HAS NO LEG S TO STAND. ON THE OTHER HAND, THE LD. D.R. RELIED UPON THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX. 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. IN THE LIGHT OF THE ORDER OF THE ITAT FOR THE ASSESSMENT YEAR 2008- 09, WHEREIN THE TRIBUNAL HELD THAT THE REFERENCE MA DE TO DVO IS BAD IN LAW, THE VERY BASIS FOR INITIATING A REVISIONAL PROCEEDI NG NO LONGER SUBSISTS. UNDER THESE CIRCUMSTANCES, WE QUASH THE ORDER PASSED BY T HE REVISIONAL AUTHORITY AND ALLOW THE APPEAL FILED BY THE ASSESSEE. PRONOUNCED IN THE OPEN COURT ON 4 TH DECEMBER14 SD/- SD/- (J. SUDHAKAR REDDY) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT VG/SPS VISAKHAPATNAM, DATED 4 TH DECEMBER, 2014 COPY TO 1 SRI K.S. PRAKASA RAO, D.NO.11-1-34, SANKAVARI STR EET, PERALA, CHIRALA. 2 THE CIT, GUNTUR 3 THE CIT(A), GUNTUR 4 THE DR, ITAT, VISAKHAPATNAM. 5 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM