M/s. Ashadeep Developers, Navsari V. The Income tax Officer, Ward-1, Navsari

ITA 2520/AHD/2007

• Counselvise Citation: 252020514 RSA 2007
• Duration Of Justice: 4 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-01-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 08-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA SRDR
• Assessee Lawyers: MITISH S MODI
• Keywords: Opportunity of being heard; Principle of natural justice; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.2520/AHD/2007 ASSESSMENT YEAR: 1999-00 M/S ASHADEEP DEVELOPERS, C/O SHYAM NAGAR-4, NR. SEVENTH DAY HIGH SCHOOL, VIJALPORE, NAVSARI PAN NO.ABRPT3216F / V/S . INCOME TAX OFFICER, WARD-1, NAVSARI / APPELLANT .. / RESPONDENT / BY APPELLANT SHRI MITISH S MODI, AR / BY RESPONDENT SHRI RAJ MEHRA, SR-DR / DATE OF HEARING 19-01-2012 / DATE OF PRONOUNCEMENT 31-01-2012 !' !' !' !' / / / / ORDER PER B.P. JAIN, ACCOUNTANT MEMBER:- THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F LD. COMMISSIONER OF INC-TAX (APPEALS)-VALSAD DATED 26-12-2006 FOR TH E ASSESSMENT YEAR 1999- 00. THE ASSESSEE HAS ARGUED THE GROUND NO.3, WHICH IS REPRODUCED AS UNDER:- (3) THE LEARNED CIT(APPEALS), VALSAD OUGHT TO HAVE OBSERVED THAT THE ASSESSMENT COMPLETED BY THE AO U/S.144 R.W.S. 147 O F THE ACT WAS WITHOUT SUPPLYING THE REASONS RECORDED FOR REOPENIN G OF THE CASE AND THEREFORE, THE WHOLE ASSESSMENT AGAINST THE PROVISI ONS OF THE LAW, IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND HENCE DESERVES TO BE ANNULLED. ITA NO.2520/AHD/2007 A.Y. 1999-00 M/S ASHADEEP DEVELOPERS V. ITO WD-1, NAVSARI PAGE 2 2. THE BRIEF FACTS AS APPEARING IN THE ASSESSMENT O RDER AS UNDER:- THE DCIT, CIRCLE-1, NAVSARI VIDE HIS LETTER DTD. 6 .8.1999 HAS REFERRED THE CASE OF M/S. DEEP LAXMI APARTMENT, NAVSARI TO ASSIS TANT VALUATION OFFICER, BARODA U/S.131(1)(D) OF THE I.T. ACT TO EL UCIDATE THE CORRECTNESS OF THE COST OF LAND/BUNGALOW/PROPERTY, AND REQUIRIN G THE AVO TO INSPECT THE LAND/PROPERTY/BUNGALOW AND TO DETERMINE THE TRU E AND CORRECT COST OF LAND/PROPERTY/BUNGALOW ETC. ACCORDINGLY, THE DVO , AHMEDABAD VIDE HIS LETTER NO.2(32)/DVO/99/2000/27 DDTD. 29.11.2000 HAS FORWARDED A VALUATION REPORT DETERMINING THE COST OF CONSTRUCTI ON OF THE PROPERTY KNOWN AS M/S. DEEP LAXMI APTS. NAVSARI, AT RS.71,71,225/- AS AGAINST THE DECLARED COST OF CONSTRUCTION OF RS.36, 00,000/- BY THE ASSESSEE. THE DVO, IN HIS REPORT, HAS ALSO SATED TH AT THE ASSESSEE HAS NOT CO-OPERATED AND NO DETAILS WERE PROVIDED AT THE TIME OF INSPECTION OF THE PROPERTY. 4.ON THE BASIS OF ABOVE FACTS, THE PROCEEDINGS U/S. 147 OF THE I.T. ACT WERE INITIATED BY THE DEPARTMENT AND NOTICE U/S.148 WERE ISSUED TO DEEP LAXMI APPT. FOR CALLING RETURN OF INCOME FOR A .Y 1997-98 TO 2000- 01. HOWEVER, THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME. PROTECTIVE/ SUBSTANTIVE ASSESSMENT:- THE ASSESSMENT IN THE CASE OF DEEP LAXMI APARTMENT FOR A.Y. 1997- 098 HAS BEEN COMPLETED ON 29.03.2005. BUT ON THE BA SIS OF THE INFORMATION GATHERED DURING THE COURSE OF ASSESSMEN T PROCEEDINGS OF DEEP LAXMI APARTMENT, IT IS SEEN THAT THE PROJECT DEEP LAXMI APARTMENT WAS DEVELOPED BY M/S. ASHA DEEP DEVELOPE RS CONSISTING OF 3 MEMBERS AS MENTIONED ABOVE, (1) SHRI ASHOK DHIRUB HAI NAIK, (2) SHRI ISHWARBHAI DHIRUBHAI NAIK AND (3) SHRI KUNVARJIBHAI SHAMJI TANK. THEREFORE, TO PROTECT INTEREST OF THE REVENUE, NOTI CE U/S.148 OF THE I.T. ACT HAS BEEN ISSUED TO M/S. ASHA DEEP DEVELOPERS, O N 19.07.2005, ALONG WITH THE NOTICE U/S.142(1) TO MAKE ASSESSMENT ON SUBSTANTIVE BASES FOR A.Y. 1998-99, 1999-2000 AND 2000-01 AND O N PROTECTIVE BASIS IN THE CASE OF DEEP LAXMI APARTMENT FOR A.Y. 1998-99, 99-2000 AND 2000-01. BEFORE THE LD. CIT(A) THE ASSESSEE RAISED GROUND NO .4, WHICH IS REPRODUCED AS UNDER:- (4) THE ITO, WARD-1, NAVSARI HAS ERRED IN MAKING A SSESSMENT U/S.144 R.W.S 147 OF THE ACT, WITHOUT SUPPLY THE REASONS RE CORDED FOR RE-OPENING OF THE CASE IS AGAINST THE PROVISIONS OF LAW AND HE NCE NOT JUSTIFIED. 3. THE LD. CIT(A) DISMISSED THE GROUND OF THE ASSES SEE, WHICH IS REPRODUCED FOR THE SAKE OF CLARITY AS UNDER:- ITA NO.2520/AHD/2007 A.Y. 1999-00 M/S ASHADEEP DEVELOPERS V. ITO WD-1, NAVSARI PAGE 3 7.1 IN THIS CONNECTION, THE FACTS AS LAID DOWN BEF ORE ME REVELS THAT NO REQUEST TO OBTAIN THE COPY OF THE REASONS RECORDED WAS SEPARATELY MADE BY THE APPELLANT BEFORE THE AO. SECONDLY, THE ASSESSMENT PROCEEDINGS WERE CARRIED OUT IN THE CASE OF DEEPLAXMI APARTMENT ALSO AND THEREFORE, THE APPELLANT WAS ALREADY AWARE THAT THERE WERE DIFFERENCES IN THE COST OF CONSTRUCTION AS DECLARED AND AS DETERMINED BY THE DVO IN THE CASE OF THE APARTMENT CONSTRUCTED BY THE APPELLANT AND THEREFORE, THE AO HAD REASONS TO BELIEVE THAT CERTA IN INCOME IS ESCAPING ASSESSMENT IN THE CASE OF THE APPELLANT. T HE ASSESSMENT WAS FRAMED ON SUBSTANTIVE BASIS IN THE CASE OF DEEPLAXMI APARTMENT AND SUBSEQUENTLY, AFTER THE FACT HAVING COME ON SURFACE , THE ASSESSMENT WAS RE-OPENED IN THE CASE OF THE APPELLANT ON SUBST ANTIVE BASIS. THEREFORE, I FIND NO MERITS IN THE CONTENTION OF TH E APPELLANT. THE APPELLANTS GROUND NO.4 IS, THEREFORE, DISMISSED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE HAS INVITED OUR ATTENTION AT PAGE-5 OF THE PAPER BOOK, WHERE HE HAS REQUESTED THE ASSESSING OFFICER VIDE HIS LETTER DATED 06-06-2010 FOR PROVIDING THE REASONS FOR REOPENING THE CASE. THE S AME WERE NOT PROVIDED. IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT OF IN DIA IN CASE OF GKN DRIVESHAFTS (INDIA) LTD. V. ITO AND OTRS. (2003) AS REPORTED IN 259 ITR 19 (SC) THE AO IS DIRECTED TO SUPPLY THE COPY OF THE REASON S RECORDED FOR REOPENING THE ASSESSMENT. AFTER TAKING THE OBJECTIONS OF THE ASSESSEE, THE AO IS DIRECTED TO PASS A SPEAKING ORDER BEFORE PROCEEDING WITH THE ASSESSMENT, IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT OF IN DIA IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. (SUPRA). BEFORE CONCLUSION, IT IS WORTH TO MENTION THAT THE ASSESSEE HAD RAISED GROUNDS CHALLENGING THE QUA NTUM ADDITION, HOWEVER, SINCE THE ISSUE ON JURISDICTION HAS BEEN RESTORED B ACK AND THAT LEGAL ISSUE IS TO BE SETTLED FIRST THEREFORE AT PRESENT AT THIS ST AGE IT IS NOT VIABLE TO DECIDE THESE GROUNDS AS IT WAS SUGGESTED IN THE CASE OF RAHULKUMAR BAJAJ V. ITO (1999) 69 ITD 1 (SB) (NAG). THE OTHER GROUNDS ARE N OT ACCORDINGLY BEING DECIDED AND THE MATTER IS SENT TO THE FILE OF AO WH O WILL DECIDE THE OTHER ITA NO.2520/AHD/2007 A.Y. 1999-00 M/S ASHADEEP DEVELOPERS V. ITO WD-1, NAVSARI PAGE 4 ISSUES DE NOVO AFTER PASSING A SPEAKING ORDER AS DI RECTED ABOVE BUT BY AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. # !' $!%& 31 / 01 /201 2 * + , - THIS ORDER PRONOUNCED IN OPEN COURT ON 31/01/ 201 2. SD/- SD/- ( MUKUL KUMAR SHRAWAT ) ( B.P. JAIN ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) $!%&- 31/01/2012 /!! - DKP* !' !' !' !' 001 001 001 001 21 21 21 21 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. %%05 6 / CONCERNED CIT 4. 6- / CIT (A) 5. 19, 0005, 05, /!! / DR, ITAT, AHMEDABAD 6. ,<= ># / GUARD FILE. BY ORDER/ !' , /TRUE COPY/ ?// %@ 05, /!! -