Meenaben Rameshbhai Parmar, Ahmedabad V. The Income Tax Officer, Ward-6(3), Ahmedabad

ITA 2388/AHD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8494 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Valuation report
• Section: 143(3)

Judgement Text

ITA NO. 2388 /AHD/ 201 3 ASSESSMENT/ YEAR : 200 9 - 10 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SM C BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR, ACCOUNTANT MEMBER ] ITA NO. 2388/AHD/2013 ASSESSMENT YEAR: 2009 - 10 MEENABEN R. PARMAR ... .. APPELLANT A - 1, KARTIK SOCIETY O/S. SHAHPUR GAT E, AHMEDABAD - 380004 . [PAN : AGVPP 1767 C ] VS. INCOME TAX OFFICER WARD 6(3), AHMEDABAD. .RESPONDENT APPEARANCES BY : VIVEK CHAVDA, FOR THE APPELLANT PRASOON KABRA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 06.07.2017 DA TE OF PRONOUNCING THE ORDER : 26 .0 9 .2017 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 23 RD JULY, 2013, PASSED BY THE LEARNED CIT(A) - XI, AHMEDABAD, IN THE MATTER OF ASSESSMENT UN DER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER ), FOR THE ASSESSMENT YEAR 2009 - 10 . 2. GROUND NO.1 IS GENERAL AND DOES NOT CALL FOR ANY SPECIFIC ADJUDICATION. 3. IN GROUNDNO.2, THE GRIEVANCE RAISED BY THE ASSESSEE IS AS FOLLOWS : - TH AT WITHOUT ANY PREJUDICE TO THE AFORESAID GROUND OF THIS MEMORANDUM OF APPEAL, ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE, FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN, THE LEARNED AO DID NOT JUSTIFY IN SUBSTITUTING THE AMOUNT OF RS.40,57,700/ - AS FUL L VALUE OF CONSIDERATION FOR THE AMOUNT OF RS.40,00,000/ - AS SHOWN BY THE APPELLANT IN HER RETURN OF INCOME AND THEREBY MAKING THE IMPUGNED ADDITION OF RS.57,700/ - TO THE APPELLANT S RETURNED INCOME. THE ADDITION HAS BEEN MADE BY THE II. AO MERELY ON ASSUM PTION AND SURMISES AND IN IGNORANCE OF EVIDENCE ON RECORDS. HE MADE THE ADDITION WITHOUT APPRECIATING EVIDENCE ON RECORDS AND THE APPELLANT S EXPLANATION IN THIS REGARD. THE APPELLANT APPEALS FOR DIRECTING THE LEARNED AO FOR DELETING THIS ADDITION. ITA NO. 2388 /AHD/ 201 3 ASSESSMENT/ YEAR : 200 9 - 10 PAGE 2 OF 3 4. LEA RNED REPRESENTATIVES FAIRLY AGREE, EVEN AS LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY RELIED ON THE STAND OF THE AUTHORITIES BELOW, THAT THIS ISSUE IS NOW COVERED, IN FAVOUR OF THE ASSESSEE, BY A CO - ORDINATE BENCH DECISION DATED 06.06.2017 IN THE CASE OF BALW A NT SINGH VS. ACIT (ITA NO.4104/DEL/2016) WHEREIN IT HAS BEEN INTER ALIA OBSERVED AS FOLLOWS : - 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.5,15,578/ - ON THE BASIS OF THE REPORT OF DVO WHICH INDICATED THAT THE ASSESSEE HAS SPENT THIS MUCH AMOUNT ON CONSTRUCTION OF HOTEL/BANQUET DURING THE YEAR. IT CAN BE SEEN FROM THE VALUATION REPORT ITSELF THAT THE ASSESSEE DECLARED AN INVESTMENT OF RS.4,92,380/ - IN THE PREVI OUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE TOTAL INVESTMENT SPREADING OVER FIVE YEARS DECLARED BY THE ASSESSEE, AS MENTIONED IN THE VALUATION REPORT, STANDS AT RS.3,65,47,888/ - AS AGAINST THE ESTIMATE MADE BY THE DVO FOR A TOTAL SUM OF RS.3,97,48,433/ - . THE ASSESSING OFFICER HAS NOTED THIS FACT IN HIS ORDER FOR THE ASSESSMENT YEAR 2011 - 12, WHOSE COPY HAS BEEN PLACED ON RECORD. PARA 3 OF SUCH ORDER DISCUSSES ABOUT THE TOTAL INVESTMENT MADE BY THE ASSESSEE AND THE ESTIMATE MADE BY THE D VO AT RS.3.97 CRORE DIVIDED IN FIVE YEARS FROM FINANCIAL YEAR 2007 - 08 TO 2011 - 12. NO ADDITION HAS BEEN MADE ON THIS COUNT BY SPECIFICALLY MENTIONING IN THE ORDER: NO ADDITION IS CALLED FOR ON THIS POINT. THUS IT IS APPARENT THAT THE AO HAS ACCEPTED THE G ENUINENESS OF INVESTMENT MADE IN THE CONSTRUCTION. I FAIL TO SEE ANY REASON FOR SUSTAINING ANY ADDITION IN THE YEAR UNDER CONSIDERATION AS THE DVO S REPORT IS DATED JULY, 2013 AND THE DVO HAS RECORDED THAT THE ASSESSEE HAS DECLARED INVESTMENT OF RS.4.92 LA C AGAINST HIS ESTIMATE OF COST OF CONSTRUCTION AT RS.5.15 LAC FOR THE YEAR, WHICH IS LESS THAN 10%. THE HON'BLE J & K HIGH COURT IN HONEST GROUP OF HOTEL (P) LTD. VS. CIT (2002) 177 CTR J&K) 232, HAS HELD THAT DIFFERENCE UPTO 10% IN THE DVO S REPORT AND TH E AMOUNT SHOWN BY THE ASSESSEE IS LIABLE TO BE IGNORED. IN THE FACTS OF THE INSTANT CASE, IT IS SEEN THAT THE OVERALL DIFFERENCE BETWEEN THE INVESTMENT DECLARED BY THE ASSESSEE AT RS.3.65 CRORE AND AS ESTIMATED BY THE DVO AT RS.3.97 CRORE IS LESS THAN 10% OF THE DVO S ESTIMATE. AS SUCH, NO ADDITION IS CALLED FOR. I ORDER FOR THE DELETION OF ADDITION. 5. IN THE PRESENT CASE ALSO, THE DIFFERENCE IN STATED CONSIDERATION VIS - A - VIS STAMP DUTY VALUATION IS LESS THAN 10%. IN THIS MAT T ER, AND RESPECTFULLY FOLLOW ING THE BINDING JUDICIAL PRECEDENT, I UPHOLD T HE PLEA OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO ADOPT, FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS, SALE CONSIDERATION OF RS.40,00,000/ - AS AGAINST RS.40,57,000/ - ADOPTED BY HIM. 6. GROUND NO.2 IS THUS ALLOWED. 7. IN GROUND NO.3, THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCE: THAT WITHOUT ANY PREJUDICE TO THE AFORESAID GROUNDS OF THIS MEMORANDUM OF APPEAL, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHILE CALCULATING THE AMOUNT OF CAPIT AL GAIN, THE LEARNED AO DID NOT JUSTIFY THE EXCLUDING THE AMOUNT OF RS.5,48,582/ - BEING THE INTEREST PAIN ON CAPITAL BORROWED FOR ACQUISITION OF THE SOLD PROPERTY ITA NO. 2388 /AHD/ 201 3 ASSESSMENT/ YEAR : 200 9 - 10 PAGE 3 OF 3 FROM THE COST IMPROVEMENT OF THAT PROPERTY AND THEREBY IN INCREASING THE AMOUNT OF CAPITAL GA IN BY RS.5,48,582/ - WHICH RESULTED IN ADDITION OF RS.5,48,582/ - TO THE APPELLANT S RETURNED INCOME. THE ADDITION HAS BEEN MADE BY LEARNED AO MERELY ON ASSUMPTIONS AND SURMISES AND IN IGNORANCE OF EVIDENCE ON RECORDS. HE MADE THE ADDITION WITHOUT APPRECIATI NG EVIDENCE ON RECORDS AND THE APPELLANT S EXPLANATION IN THIS REGARD. THE APPELLANT APPEALS FOR DIRECTING THE LEARNED AO FOR DELETING THIS ADDITION. 8. O N THIS ISSUE ALSO, LEARNED REPRESENTATIVES AGREE, EVEN AS LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY RELIES ON THE STAND OF THE AUTHORITIES BELOW, THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE, BY A DIVISION BENCH DECISION IN THE CASE OF ASH O K KUMAR S VASWANI VS. DCIT (ITA NO.1528/AHD/2012; ORDER DATED 24.01.2017). RESPECTFULLY FOLLOWING THIS PRECEDENT, I DIRECT THE ASSESSING OFFICER TO DELETE THIS DISALLOWANCE OF RS.5,48,542/ - AS WELL. 9. GROUND NO.3 IS THUS ALLOWED. 10. IN GROUND NOS.4 & 5, ASSESSEE ONLY PRAYS FOR CONSEQUENTIAL RELIEF. NO ADJUDICATION IS THUS CALLED FOR. 11. IN THE RESU LT, THE APPEAL IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON THE 2 6 TH DAY OF SEPTEMBER , 2017. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: AHMEDABAD, THE 26 TH DAY OF SEPTEMBER , 2017. PBN/* COPIES TO: (1) THE APPE LLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLANT TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD