ITO, Cuddalore V. Smt. P.Archanabai, Pennadam

ITA 2459/CHNY/2006

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7457 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-01-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 21-12-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR I VIJAYAKUMAR
• Keywords: Unexplained investment; Depreciation; Valuation report; Revised return
• Section: 133A

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI C BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 2459/MDS/2006 ASSESSMENT YEAR: 2000-01 THE INCOME TAX OFFICER, WARD I(4), CUDDALORE. VS. SMT. P. ARCHANABAI, NO. 33, EAST RAJA STREET, PENNADAM [PAN: ACYPA2853K] (APPELLANT) (RESPONDENT) REVENUE BY : DR. I. VIJAYAKUMAR, CIT - DR ASSESSEE BY : NONE DATE OF HEARING : 19.01.2012 DATE OF PRONOUNCEMENT : 19.01.2012 ORDER PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) XI, CHENNAI DATED 28.08.2006 IN ASSESSMENT Y EAR 2000-00. DR. I. VIJAYAKUMAR, CIT - DR REPRESENTED ON BEHALF OF THE REVENUE AND NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE ISSUE OF NOTICE [AD ON RECORD]. HENCE, WE PROCEEDED TO DECIDE THE APPEAL AFTER HEAR ING THE LD. LEARNED DEPARTMENTAL REPRESENTATIVE AND MATERIAL AVAILABLE ON RECORD. 2. IN THIS APPEAL, THE REVENUE HAS TAKEN 3 GROUNDS OF APPEAL AND THE ONLY ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD. LEARNED COMMISSIONER OF INCOME TAX(A) WAS NOT JUSTIFIED IN DELETING THE ADD ITION OF RS.18,09,720/- I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.2459 2459 2459 2459/ // /M/ M/M/ M/06 0606 06 2 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCL OSED/UNACCOUNTED INCOME. 3. WE HAVE HEARD THE LD. LEARNED DEPARTMENTAL REPR ESENTATIVE, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILA BLE ON RECORD. 4. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY U NDER SECTION 133A OF THE ACT WAS CARRIED OUT ON 26.06.2002 IN THE BUSINESS P REMISES OF THE HUSBAND OF THE ASSESSEE SHRI S.S.K. PURUSHOTHAMAN CHETTIAR, WHO WAS CARRYING ON THE BUSINESS IN THE NAME OF M/S. SRI KRISHNA MAHAL KALYANAMANDAPAM AS A PROPRIETARY CONCERN. DURING THE SURVEY OPERATION, T HE SON OF THE ASSESSEE SHRI P. GOPALAKRISHNAN WAS EXAMINED ON OATH, WHO DE POSED THAT AN AMOUNT OF RS.3,78,191/- WAS THE COST OF CONSTRUCTIO N INCURRED OVER AND ABOVE WHAT WAS DECLARED FOR THE KALYANAMANDAPAM. TH E ASSESSEE FILED REVISED RETURN ON 03.09.2002 AT A REVISED LOSS OF R S.1,61,610/- BY INCLUDING A SUM OF RS.1.00 LAKH AS ADDITIONAL INCOME TOWARDS EXCESSIVE COST OF CONSTRUCTION OF THE KALYANAMANDAPAM. 5. THE ASSESSING OFFICER OBSERVED THAT THE KALYANA MANDAPAM WAS CONSTRUCTED BETWEEN APRIL, 1998 AND SEPTEMBER, 1999 AND A SUM OF RS.29,21,331/- WAS SHOWN TOWARDS THE COST OF CONSTR UCTION. IN SUPPORT OF THIS COST OF CONSTRUCTION, VALUATION REPORT WAS OBT AINED FROM THE GOVERNMENT VALUER, WHO DETERMINED THE COST AT RS.29,50,000/- A ND THE DIFFERENCE AMOUNT OF RS.28,669/- WAS OFFERED TO TAX IN THE RET URN ORIGINALLY FILED BY THE ASSESSEE. PURSUANT TO THE SURVEY, A FURTHER ADDITIO NAL SUM OF RS.1,00,000/- I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.2459 2459 2459 2459/ // /M/ M/M/ M/06 0606 06 3 WAS ADMITTED TOWARDS THE COST OF CONSTRUCTION OF KA LYANAMANDAPAM. THE ASSESSING OFFICER MADE A REFERENCE TO THE DVO, WHO, VIDE HIS REPORT DATED 16.03.2005 ESTIMATED THE COST AT RS..50,60,800/-. I N RESPONSE TO THE SHOW- CAUSE NOTICE, THE ASSESSEE PRODUCED THE BOOKS OF AC COUNT FOR VERIFICATION FROM WHICH THE ASSESSING OFFICER OBSERVED THAT THE EXPENSES CLAIMED BY THE ASSESSEE FOR PURCHASE OF SAND, BRICKS, ROOF-TILES A ND LABOUR CHARGES ARE NOT SUPPORTED BY ACCEPTABLE EVIDENCE AND TO A CERTAIN E XTENT REMAINED UNVERIFIABLE. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE COST OF CONSTRUCTION WAS TO BE ESTIMATED. HE, THEREFORE, AD OPTED THE COST OF CONSTRUCTION ESTIMATED BY THE DVO AT RS.50,60,800/- AGAINST RS.30,50,000/- SHOWN BY THE ASSESSEE AND CONSEQUENTLY ADDITION OF RS.18,09,720/- WAS MADE AFTER ALLOWING DEPRECIATION ON THE REVISED VAL UE AT RS.2,01,080/-. 6. THE LD. LEARNED COMMISSIONER OF INCOME TAX(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS HELD AS UNDER: 8. I HAVE CAREFULLY CONSIDERED THE FACTUAL MATRIX OF THE CASE, THE REASONS BASED ON WHICH ADDITIONS HAVE BEEN PREF ERRED BY THE AO AND OTHER MATERIAL ON RECORD. AS A MATTER OF FACT, THERE IS NOT A SHRED WHICH HAS BEEN BROUGHT ON RECORD IN THE FORM OF ASSESSMENT ORDER WHICH SUPPORTS THE HYPOTHESIS ARRI VED AT BY THE AO WITH REGARD TO THE UNDISCLOSED COST OF CONST RUCTION ON ACCOUNT OF WHICH ADDITION HAS BEEN MADE BY THE AO. THE SURVEY OPERATIONS CARRIED OUT DID NOT YIELD IN RECOVERY OF ANY EVIDENCE WITH REGARD TO THE COST OF CONSTRUCTION. ON THE CON TRARY, THE APPELLANT WAS FOUND TO HAVE MAINTAINED REGULAR BOOK S OF ACCOUNT AND DETAILS WITH REGARD TO THE COST OF CONSTRUCTION WHICH COULD NOT BE FAULTED BY THE AO. IN SPITE OF THE SAME, A S UM OF RS.1,00,000/- HAS BEEN OFFERED AS ADDITIONAL INCOME TOWARDS THE COST OF CONSTRUCTION IN THE KALYANAMANDAPAM. THE AO ALSO HAS NOT FAULTED THE VALUERS REPORT FILED BY THE APPELL ANT ESTIMATING I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.2459 2459 2459 2459/ // /M/ M/M/ M/06 0606 06 4 THE COST OF CONSTRUCTION OF THE KALYANAMANDAPAM ON THE BASIS OF WHICH THE ORIGINAL RETURN WAS FILED. THIS VALUE WAS AT RS.29,50,000/-. IN THE CIRCUMSTANCES, THERE IS NOTH ING ON RECORD TO SUPPORT THE ASSESSMENT MADE BY THE AO BRINGING T O TAX AN ADDITIONAL INCOME AS HAS BEEN DONE IN THIS CASE. TH E APPELLANT HAD DISCHARGED THE ONUS OF PROVING THE COST OF CONS TRUCTION BY FILING THE RETURN ON THE BASIS OF APPROVED VALUERS REPORT BACKED BY REGULAR ACCOUNTS MAINTAINED IN THIS REGARD. THIS SHIFTED THE ONUS OF PROVING FROM THE APPELLANT TO THE AO WHICH HAS NOT BEEN DONE. IN APPRECIATION OF SUM TOTALITY OF FACTS BEFO RE ME, FOR THE REASONS DISCUSSED ABOVE AS ALSO HAVING REGARD TO TH E ORDERS ON SIMILAR ISSUE OF THE LD. CIT(A)-VIII, CHENNAI MENTI ONED (SUPRA), I HAVE NO HESITATION IN DIRECTING THE AO TO DELETE TH E ADDITION MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN THE KALYANAMANDAPAM. THIS GROUND OF APPEAL IS ALLOWED. 7. THE LD. LEARNED DEPARTMENTAL REPRESENTATIVE MER ELY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 8. WE FIND THAT THE ASSESSEE HAD MAINTAINED BOOKS OF ACCOUNTS, WHEREIN THE EXPENDITURE INCURRED IN CONSTRUCTION OF KALYANA MANDAPAM WAS REFLECTED. THE ASSESSING OFFICER HAS NOT FOUND ANY DEFECT IN T HE REGULARLY MAINTAINED BOOKS OF ACCOUNTS, IN OUR CONSIDERED OPINION WITHOU T POINTING OUT ANY DEFECT IN THE BOOKS OF ACCOUNT, IT WAS NOT OPEN TO THE ASS ESSING OFFICER TO REJECT THE RESULT REFLECTED FROM SUCH BOOKS OF ACCOUNT. FURTHE R, WE FIND THAT THE COST OF CONSTRUCTION OF KALYANAMANDAPAM REFLECTED IN THE AS SESSEES BOOKS OF ACCOUNT AT RS.29,50,000/- IS ALSO CORROBORATED BY R EGISTERED VALUERS REPORT. IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. LEARNED COMMISSIONER OF INCOME TAX(A) IN HO LDING THAT IN THE ABSENCE OF ANY DEFECT IN THE REGULARLY MAINTAINED B OOKS OF ACCOUNT, ADDITION CANNOT BE MADE MERELY ON THE BASIS OF THE DVOS REP ORT. WE, THEREFORE, I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.2459 2459 2459 2459/ // /M/ M/M/ M/06 0606 06 5 CONFIRM THE ORDER OF THE LD. LEARNED COMMISSIONER O F INCOME TAX(A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 9. NO OTHER POINTS URGED BY THE LD. LEARNED DEPART MENTAL REPRESENTATIVE EXCEPT THE ABOVE POINT. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON THE CLOSE OF HEARI NG ON 19.01.2012. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER CHENNAI, DATED, THE 19.01.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.