Subash Kumar Patro, Rayagada V. ITO, Rayagada

ITA 255/CTK/2012

• Counselvise Citation: 25522114 RSA 2012
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 23-08-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 12-04-2012
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: D K SETH
• Keywords: Unexplained cash credit; Unexplained investment; Depreciation; Valuation report; Reassessment proceedings
• Section: 68; 69C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 255,256 AND 257/CTK/2012 / ASSESSMENT YEAR S 1998 - 99, 1999 - 2000 AND 2000 - 01 SUBAS IS KUMAR PATRO, GUNUPUR, RAYAGADA PAN: AIYPP 1255 C - - - VERSUS - INCOME - TAX OFFICER, RAYA GADA WARD, RAYAGADA. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI D.K.SETH, AR / FOR THE RESPONDENT: / SHRI A.BHATTACHARJEE, DR / DATE OF HEARING: 23.08.2012 / DATE OF PRONOUNCEMENT: 31.08.2012 / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER. THESE THREE APPEALS FOR THE ASSESSMENT YEARS 1998 - 99, 1999 - 2000 AND 2001 - 02 HAVE BEEN FILED BY THE ASSESSEE ON COMMON GROUNDS IN ALL THR EE AYS WHICH READ AS UNDER : 1. FOR THAT THE LEARNED A.O. IS NOT JUSTIFIED TO ESTIMATE THE COST OF CONSTRUCTION OF THE HOTEL PREMISES MORE SO THE COST AS ESTIMATED IS HIGHLY EXCESSIVE. 2. FOR THAT THE COMPUTATION OF ADDITION AS MADE IS INCORRECT, EXCESSI VE AND ILLOGICAL. 3. FOR THAT THE LEARNED COMMISSIONER IS NOT JUSTIFIED TO CONSIDER THE CONTENTION OF THE APPELLANT PARTLY AND TO SUSTAIN THE ADDITION SUBSTANTIALLY. 4. FOR THAT DISALLOWANCE OF LIABILITIES AND LOANS IS NOT JUSTIFIED. 5. FOR THAT THE LEA RNED A.O. AS - WELL - AS THE LEARNED COMMISSIONER FAILED TO CONSIDER THE CLAIM OF COST OF CONSTRUCTION INCURRED AND DISCLOSED BY THE APPELLANT . 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT THE ASSESSEE IS THE PROPRIETOR OF HOTEL RUKMINI, P.O.GU NUPUR, DISTRICT RAYAGADA AND FILED I.T.A.NO. 255,256 AND 257/CTK/2012 2 ITS RETURNS FOR THE IMPUGNED ASSESSMENT YEARS WHEN IT WAS OBSERVED THAT THE ASSESSEE HAD NOT FILED THE RETURN FOR THE ASSESSMENT YEAR 1999 - 2000 WHEN SUBSTANTIAL INVESTMENTS WERE MADE IN THE CONSTRUCTION OF A HOTEL BUILDIN G. IT WAS NOTICED THAT THE ASSESSEE DECLARED WRITTEN DOWN VALUE OF THE BUILDING AT 71,31,163 AND CLAIMED DEPRECIATION AT 10,69,874 FOR THE ASSESSMENT YEAR 2001 - 02. PROCEEDINGS U/S.147 WERE INITIATED FOR THE AYS UNDER CONSIDERATION. APPEALS FOR THE AYS 19 98 - 99 1999 - 2000 AND 2000 - 01WERE CONSIDERED BY THE TRIBUNAL WHEN THE REVENUE HAS BEEN THE APPELLANT BEFORE THE T RIBUNAL AND THE ORDERS OF THE LEARNED CIT(A) WERE SET SIDE AND WERE RESTORED TO HIM FOR FRESH ADJUDICATION BY AN ORDER DT.24.1.2008 IN ITA NOS.33 - 35/CTK/2007. 3. INITIATING HIS ARGUMENTS, THE LEARNED COUNSEL SUBMITTED THAT FOR THE IMPUGNED AYS THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT WHEN THE COST OF CONSTRUCTION WAS INSCRIBED IN THE BOOKS OF ACCOUNT WHEN THE ASSESSING OFFICER SOUGHT TO OBTAIN THE DVOS REPORT INSOFAR AS THE ISSUE WAS CONSIDERED BY THE LEARNED CIT(A) ON APPEAL BY THE ASSESSEE AND THE TOTAL INVESTMENT OF RS 78,44,859 WAS EXPLAINED. THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE COULD NOT PRODUCE THE CONSTRUCTION BOOKS OF ACCOUNT WHEN HE OBTAINED THE REPORT FROM THE VALUATION OFFICER ON HAVING CARRIED OUT INSPECTION ON 1.8.2005 AND REPORTED THE COST OF CONSTRUCTION YEAR WISE FOR THE AYS 1996 - 97 TO 1999 - 2000 AS UNDER : ASSESSMENT YEAR AMOUNT IN 1996 - 97 22,01,753 1997 - 98 33,02,594 1998 - 99 42,19,928 1999 - 2000 45,86,936 TOTAL: 1,43,11,212 THE REGISTERED VALUER INSPECTED THE PROPERTY ON 7.9.2005 BUT ESTIMATED THE VALUE OF THE PROPERTY AS PER THE REPORT NOTED BY THE DVO ATRS.76,50,000. I.T.A.NO. 255,256 AND 257/CTK/2012 3 THE L EARNED COUNSEL ALSO PRODUCED A CERTIFICATE FROM ORISSA STATE FINANCIAL CORPORATION (IN SHORT OSFC) WHO HAD ADVANCED LOAN AGAINST MO RTGAGE OF THE HOTEL A SUM OF 10 ,58,304 AT 74,89,930. IN OTHER WORDS, THE LEARNED COUNSEL EXPLAINED THAT THE REBUTTAL BY THE ASSESSEE ON THE ASSESSING OFFICERS CONFRONTING THE DVOS REPORT WAS ON ESTIMATION WHICH ESTIMATION COULD NOT BE CHALLENGED BY THE ASSESSEE IN VIEW OF THE LOAN HAVING BEEN GRANTED BY THE GOVERNMENT AUTHORITIES BEING OSFC AND IN FORM OF SUBSIDY BEING ADVAN CED FROM GIET AMOUNTING TO 5,25,600. IT WAS EXPLAINED TO THE AUTHORITIES BELOW THAT THE SOURCES HAVE BEEN EXPLAINED TO THE EXTENT OF THE VARIATION AS CERTIFIED BY THE OSFC AND THE REGISTERED VALUER FOR THE IMPUGNED AYS WHO HAD PHYSICALLY INSPECTED THE PRO PERTY AND HAD ASSIGNED THE VALUE FOR THE PURPOSE OF COST OF CONSTRUCTION WHICH COULD BE MORTGAGED TO THE FINANCIAL CORPORATION. THE LEARNED CIT(A) ON THE OTHER HAND TRIED TO EVALUATE THE PROPERTY IN HIS OWN WAY BY GIVING A BREAK UP WHEN THE ASSESSING OFFIC ER HIMSELF INCLUDED THE COST OF CONSTRUCTION BY REDUCING THE VALUE OF THE COST OF CONSTRUCTION AS ESTIMATED BY THE DVO AT 1,22,74,883 AS CAN BE PERUSED ON PAGE D.8 OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2000 - 01. THE LEARNED COUNSEL FOR THE ASSESS EE ALSO POINTED OUT THAT THIS VALUATION INCLUDED THE COST OF FURNITURE AMOUNTING TO 7,43,783 WHICH WAS NOT PART OF THE VALUE ASCERTAINED BY T HE DVO. THE LEARNED CIT(A) THEREFORE TRIED TO ANALYZE THE SITUATION OF THE VALUATION OF THE DVO WHETHER COULD BE G RANTED SELF SUPERVISION CHARGES, WHETHER COULD ALLOW PWD RATE VIS - - VIS CPWD RATE IN HIS LENGTHY ORDER INSOFAR AS WITHOUT GIVING A CLEAR FINDING THE MATTER WAS CONSIDERED APPROPRIATE FOR RESTORATION TO THE LEARNED CIT(A) BY THE TRIBUNAL . FOR THIS PROPOSITI ON THE LEARNED COUNSEL FOR THE ASSESSEE HAS ENCLOSED THE COPIES OF THE CIT(A)S ORDER DT.6.11.2006 IN THE PB. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FACTS AS I.T.A.NO. 255,256 AND 257/CTK/2012 4 EMERGING OUT OF RESTORATION BY THE TRIBUNAL AND THE LEARNED CIT(A) OBSERV ED IN HI S SIMILAR ORDER AS FOLLOWS : 4. SO FAR AS THE MERITS OF THE ASSESSMENT ARE CONCERNED, THE SAME S TAND DECIDED BY MY PREDECESSOR I N OFFICE VIDE HIS ORDER DTD.06 - 11 - 2006. THE LD. A/R DURING THE HEARING BEFORE ME HAS NOT POINTED OUT ANY ERROR OF PRIMA FA CI E N ATURE I N THE SAID ORDER. IN VIEW OF THE SAME, SINCE I HAVE NO JURISDICTION TO REVIEW OR RE - APPRECIATE THE ORDER OF MY PREDECESSOR, THE SAME SHALL HOLD GOOD. ACCORDINGLY, ON MER I TS THE DECISION OF MY PREDECESSOR IN OFFICE VIDE HIS ORDER REFERRED ABOVE, SHAL L CONTINU E. 3.1. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LEARNED CIT(A) HOLDING THE ABOVE VIEW HAS TRIED TO ADJUDICATE THE ISSUE OF VALIDITY FOR REASSESSMENT U/SS.147/148 AND ALSO THAT THE ADOPTION OF THE VALUE AS GIVEN BY THE DVO WAS AP PROPRIATE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THEREFORE THAT THE LEARNED CIT(A) PROCEEDED TO ACCEPT THE VALUATION OF THE DVO VIS - A - VIS CONCESSION GRANTED BY THE ASSESSING OFFICER INSOFAR AS THE SOURCE OF INVESTMENT IN THE SAID PROPERTY AT THE V ALUATION DECLARED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT DULY CERTIFIED BY THE REGISTERED VALUER AS WELL AS OSFC WHO HAD ADVANCED A SUM OF 10,58,304 AGAINST MORTGAGE OF THE HOTEL PROPERTY ASSIGN ED THE VALUE AT 74,81,930 TRICKLES DOWN TO THE FACT THAT WH ETHER THE ASSESSEE WAS TO EXPLAIN THE SOURCES OF FUND AVAILABLE TO IT ON THE ENHANCED VALUE OF THE PROPERTY FOR THE SPREAD OVER PERIOD BY WAY OF AN ARITHMETICAL ACCURACY WHEN THE TOTAL INVESTMENT IN THE PROPERTY WAS EXPLAINED AS FOLLOWS : I.T.A.NO. 255,256 AND 257/CTK/2012 5 HE SUBMITTED TH AT IN THE FIRST INNINGS AN EFFORT OF THE ASSESSING OFFICER AND THE LEARNED CIT(A) APPEARED TO INSIST UPON THE DVOS REPORT AND VALUE TO BE ADOPTED VIS - - VIS THE ASSESSEE JUSTIFYING THE VALUATION AS INSCRIBED IN ITS BOOKS OF ACCOUNT DULY CERTIFIED BY THE OS FC WHO HAD ADVANCED LOAN TO THE ASSESSEE FOR THE CONSTRUCTION THE PROPERTY WHEN THE LEARNED CIT(A) HAD CONSIDERED THE ASSESSEES INVESTMENT IN THE P ROPERTY FROM ITS OWN SOURCE 5,93,935 AND FROM UNSECURED LOANS AMOUNTING TO 46,43,000 WHICH WERE EXPLAINED AND WERE PARTLY ACCEPTED FOR THE AYS 1998 - 99 AMOUNTING TO 10,58,000, ASSESSMENT YEAR 1999 - 2000 AMOUNTING TO 16,55,000 AND FOR THE ASSESSMENT YEAR 2000 - 01 AMOUNTING TO 8,45,000 WERE ACCEPTED. FOR THIS PURPOSE HE FURNISHED THE COPIES OF THE ASSESSMENT ORDERS AND THE CIT(A)S ORDERS ACCEPTING AND CONFIRMING THE INVESTMENT WHICH SOURCE WAS TO BE EXPLAINED AND CONSIDERED BY THE ASSESSING OFFICER. HE SUB MITTED THAT SUCH PROPOSITION WOULD HAVE DEALT WITH TO LEAD TO THE FINDING THAT AFTER GIVING APPEAL EFFECT THE INCOMES WHICH HAVE BEEN NOW SOUGHT TO BE TAXED FOR THE IMPUGNED THREE AYS WOULD BOIL DOWN TO THE FACT THAT THE ADDITION HAS BEEN PURELY MADE ON TH E BASIS OF DVOS REPORT AND NOT BECAUSE THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF INVESTMENT FROM THE VARIOUS SOURCES WHICH HAVE BEEN BROUGHT ON RECORD BALANCED THE WRITTEN DOWN VALUE ON WHICH DEPRECIATION WAS CLAIMED . THE ADDITION BEING LESS THAN THE DIFFERENCE BETWEEN THE VALUATION AS GIVEN BY THE ASSESSEE V IS - A - VIS ON PARTLY GRANT RELIEF BY THE ASSESSING OFFICER ITSELF AND THE LEARNED CIT(A) THEREFORE LEADS TO A FINDING THAT THE ADDITIONS SUSTAINED IN THE IMPUGNED THREE AYS ARE LESS THAN TH E VALUATION WHICH WAS THE SOURCE OF CONTENTION FOR PROCEEDINGS U/S.147/148 AND FINDING NO CONTROVERTING MATERIAL FOR THE PURPOSE OF ENHANCING THE VALUATION WHEN THE SAME WAS CONFRONTED TO THE ASSESSING OFFICER AND LEARNED CIT(A) WHO AGREED TO GIVE SUBSTANT IAL RELIEF IN THE FORM I.T.A.NO. 255,256 AND 257/CTK/2012 6 ADOPTION OF PWD RATES AND SELF SUPERVISION CHARGES FORMING PART OF THE VALUATION TO BE ADOPTED. 3.2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS AN UPHILL TASK TO EXPLAIN PORTION OF CONSTRUCTION SPREAD OVER A PERIOD OF FOUR YEARS IN THREE YEARS WHEN THE SOURCES HAVE BEEN UTILIZED IN A PARTICULAR YEAR IN A DIFFERENT MANNER. THE VALUATION THEREFORE COULD NOT BE ARITHMETICALLY SPREAD OVER FOR THREE YEARS WHICH HAVE TO BE IDENTIFIED AND EXPLAINED PERTAINING TO THAT YEAR AS P ER THE DVOS REPORT. IT IS NOT THE CASE OF THE ASSESSEE TO INVEST IN THE HOTEL ANY UNDISCLOSED INCOME OR UNEXPLAINED CASH CREDITS. THE ASSESSING OFFICER IN HIS JURISDICTION PROCEEDED TO ADOPT A VALUE WHICH WAS TO BE EXPLAINED BY THE DVO NOT ON ESTIMATION B Y SPREADING THE SAME OVER A PERIOD OF FOUR YEARS. THIS BEING THE REASON, THE TRIBUNAL WAS JUSTIFIED IN RESTORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO ADJUDICATED THE ISSUE MORE ON THE LEGAL ASPECTS OF VALIDITY OF PROCEEDINGS U/S.147/148 AND W HETHER A BUSINESS ASSET COULD BE SUBJECTED TO VALUATION WHEN THE CLAIM OF DEPRECIATION ON THE WRITTEN DOWN VALUE ON THE ASSET WAS THE PRIME CONCERN FOR REASSESSMENT PROCEEDINGS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE OSFC IS A GOVERNMENT OF ORISSA UNDERTAKING WHO ASSIGNED VALUE BY THE INDEPENDENT VALUER WHO GRANTED LOANS AND THEREFORE ARE INCLINED TO EXCLUDE CERTAIN IMMOVABLE ITEMS SUCH AS ELECTRICAL INSTALLATIONS, FURNITURE AND FIXTURES, PLANT AND MACHINERIES WHICH ARE PART AND PARCEL OF THE HOTEL PROPERTY. IT WAS EXPLAINED TO THE LEARNED CIT(A) THAT THE ORDER DT.6.11.2006 SUFFERED MANY INFIRMITIES WHEN THE TRIBUNAL WAS APPRISED TO THE FACT THAT THE VALUE COULD NOT DEVIATE INSOFAR AS BY WRITING PAGES AFTER PAGES WHAT SHOULD TECHNICALLY BE THE VALUE OF THE PROPERTY IN A PARTICULAR YEAR SURPASSED THE ACTUAL INVESTMENT ON THE PARTICULAR TIME INSOFAR AS THE LEARNED CIT(A) ACKNOWLEDGES THE FACT THAT AT THE END OF THE I.T.A.NO. 255,256 AND 257/CTK/2012 7 VALUATION A SUM OF 10,23,920 WAS SHOWN IN THE BOOKS OF ACCOUNT PAYABLE WHICH ALREADY FORM PART OF THE COST OF THE BUILDING. THESE UNPAID EXPENSES HAVE ALSO NOT BEEN CONSIDERED IN A CCORDANCE WITH THE PROVISIONS OF LAW INSOFAR AS THE ASSESSMENT BRINGING TO TAX THE DIFFERENCE IN VALUATION HAS BEEN REJECTED WHEN THE SOURCES ARE TO BE EXPLAINED. THE DISALLOWANCE OF CAPITAL EXPENSES CANNOT DECREASE THE VALUE OF THE PROPERTY HAS BEEN MISIN TERPRETED BY THE AUTHORITIES BELOW. THE LEARNED CIT(A) THEREFORE IN HIS WISDOM CHOSE TO CONFIRM HIS PREDECESSORS ORDER WITHOUT ADJUDICATING THE ISSUE ON MERITS BEING THE QUANTUM NOT CORRELATED BY THE ASSESSING AUTHORITY WHETHER TO FIND UNEXPLAINED SOURCE S OF INVESTMENT OR TO FIND VALUATION NOT COMMENSURATE WITH THE VERY VALUATION DULY CERTIFIED INSCRIBED IN THE BOOKS OF ACCOUNT ALSO MORTGAGED WITH THE FINANCIAL INSTITUTION WHETHER COULD BE OPEN FOR RE - VALUATION ON THE BASIS OF ASSESSEES INABILITY TO EXPL AIN THE SOURCE WHICH VALUATION THE ASSESSEE HAD DISCLOSED. CONCLUDING HIS ARGUMENTS, HE SUBMITTED THAT THE ADDITIONS AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) THEREFORE COULD NOT BE ISOLATED BY WAY OF SPECIFIC GROUNDS WHEN COMMON GROUNDS HAVE BEEN RAISED AS MENTIONED EARLIER. THE AUTHORITIES BELOW HAVE NOT BEEN ABLE TO ESTABLISH THE INCOME HAVING ESCAPED ASSESSMENT WHETHER WAS TO BE BROUGHT TO TAX UNDER THE PROVISIONS OF SECTION 6 8 OR U/S.69C OR FOR THAT MATTER AS THE ISSUES NOW R EMAIN CONCLUSIVE U/S.69. 4. THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW FOR HIS PART SUBMISSIONS. HE SUBMITTED THAT THE LEARNED CIT(A) WAS JUSTIFIED IN CONFIRMING THE ORDERS OF HIS PREDECESSOR ON MERITS INSOFAR AS THE ASSESSEE HAS AGITATED THE ISSUE ON THE BASIS OF VALIDITY OF RE - ASSESSMENT PROCEEDINGS WHEN THE LEARNED CIT(A) CATEGORICALLY NOTED IN HIS ORDER THAT THE ASSESSEE WAS SUBJECTED TO REBUT THE VALUATION REPORT AS OBTAINED BY THE ASSESSING I.T.A.NO. 255,256 AND 257/CTK/2012 8 OFFICER. ON THE BASIS OF THE REBUTTAL THE LEARNED CIT(A) HAS GIVEN RELIEF AND HAS THEREFORE COMPLIED WITH THE DIRECTION OF THE TRIBUNAL ON MERITS. THE CONTENTION OF THE LEARNED COUNSEL AS OF NOW THAT WHETHER THE INVESTMENT WAS TO BE EXPLAINED ON THE BASIS OF BOOKS OF ACCOUNT INSCRIBED THE VALUATIO N ON UNSECURED LOANS AND OTHER SOURCES WERE VERIFIED BY THE ASSESSING OFFICER AND HAS GIVEN PART RELIEF THEREFORE LEAVES THE ASSESSEE TO BE TAXED ON THE AMOUNT OF VALUATION OF THE PROPERTY WHICH REMAINS ENHANCED AND ACCEPTED BY THE ASSESSEE NOT BECAUSE THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE UNSECURED LOANS AND OTHER SOURCES OF INVESTMENT TO THE ASSESSING OFFICERS SATISFACTION. HE PRAYED THAT THE ORDERS OF THE AUTHORITIES BELOW BE CONFIRMED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. ON CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO FIND THAT THE ISSUE RELATES TO THE VALUATION OF THE PROPERTY SPREAD OVER COST BY THE VALUATION OFFICER IN THE FYS AS FOLLOWS : THE EF FORTS OF THE ASSESSING OFFICER HAVE BEEN TO OBTAIN THE SOURCE OF INVESTMENT AMOUNTING TO 1,43,11,212 WHEN PART RELIEF WAS GRANTED BY THE ASSESSING OFFICER HIMSELF AND FURTHER MORE WAS GRANTED RELIEF BY THE LEARNED CIT(A). THE DIFFERENCE ULTIMATELY REMAIN BETWEEN THE VALUE RENDERED AND INSCRIBED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND THE ADDITION SUSTAINED BY THE AUTHORITIES AS PER THE FACTS BROUGHT ON RECORD BECOMES WHETHER I.T.A.NO. 255,256 AND 257/CTK/2012 9 DISALLOWABLE U/S.68 OR U/S.69INSOFAR AS THE DIFFERENCE BETWEEN THE DVOS REPORT DULY CONSIDERED BY THE ASSESSING AUTHORITIES GIVING SUBSTANTIAL RELIEF TRICKLES DOWN B EING THE DIFFERENCE LESS THAN THE UNSECURED LOANS AND OTHER FUNDS UTILIZED FOR THE PURPOSE OF INVESTMENT IN THE PROPERTY WHETHER COULD BE CORRELATED OR TELESCOPED TO THE DIFFERENCE ALONE. IF WE ARE TO ADJUDICATE THE ISSUE SIMULTANEOUSLY WE WILL HAVE TO VER IFY THAT THE OSFC HAD CERTIFIED THE PROPERTY IN DETAIL AND NOT AS PER THE DVO AT 74,81,930. THE ASSESSEE HAD EXPLAINED THE VALUATION OF THE PROPERTY WHEN UNPAID EXPENSES AMOUNTING TO 10,23,920 WERE PART OF THE COST OF THE PROPERTY WERE PAYABLE FROM WHICH THE LEARNED CIT(A) ALLOWED ONLY 50% THEREOF. THE COST THEREFORE REMAINED THE SAME IRRESPECTIVE OF THE CREDIT BEING DISALLOWED. THE ASSESSEE WAS ABLE TO EXPLAIN THE SOURCE AMOUNTING TO 78,44,859 WHEN THE AUTHORITIES PARTLY ACCEPTING THE SOURCES EXPLAINED WERE TO CORRELATE UNEXPLAINED SOURCES WITH THE ENHANCEMENT IN THE PROPERTY VALUE. WE HAVE PERUSED THE ORDERS OF THE ASSESSING AUTHORITIES CAREFULLY AND ON OUR CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO HOLD THAT TH E VALUATI ON IS SUBJECT TO ESTIMATION INSOFAR AS THE SOURCES STOOD TOTALLY EXPLAINED BY THE ASSESSEE. THE ASSESSEE COULD EXPLAIN THE SOURCES WHICH HAVE BEEN FULLY EXPLAINED AND COULD NOT BE TAXED U/S.69 OR SECTION 69C INSOFAR AS THE INVESTMENT VALUE BY THE ASSESSING AUTHORITIES WAS ON ESTIMATION. IT WAS THE CASE OF THE ASSESSEE TO CONFRONT THE DVO ON THE PART RELIEF GRANTED BY THE ASSESSING AUTHORITIES WHETHER COULD CONFRONT PART SUSTENANCE THEREOF LEADING TO A FINDING WHETHER THE SOURCE REMAINED UNEXPLAINED. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND WE DO NOT FI ND ANY CONTROVERTING MATERIAL FOR ESTABLISHING THE FACT THE DEVIATION OF THE VALUE OF THE PROPERTY AS SUBMITTED BY THE ASSESSEE AND DULY CERTIFIED BY THE FINANCIAL INSTITUTION TO BE BALANCED AGAI NST THE DVOS REPORT WHICH PART I.T.A.NO. 255,256 AND 257/CTK/2012 10 HAS BEEN REDUCED BY THE AUTHORITIES THEMSELVES TO HIGHLIGHT THE PORTION OF INVESTMENT MADE FROM UNDISCLOSED OR UNEXPLAINED CASH CREDITS. THE INVESTMENT THEREFORE COULD NOT BE TAXED UNDER THE PROVISIONS OF SECTION 69C INSOFAR AS THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE UNSECURED LOAN AND THE INCOME FROM ITS OWN SOURCES RENDERING INVESTMENT IN THE HOTEL PROPERTY. FURTHERMORE THE RESIDUAL AMOUNT OF INVESTMENT AS PER DVOS REPORT WHETHER COULD BE REDUCED TO THE EXTENT THAT THE C OST OF CONSTRUCTION WAS SPREAD OVER BY THE DVO FOR FOUR YEARS WHETHER COULD BE ISOLATED BY THE ASSESSING OFFICER IDENTIFYING THE SOURCES OF A PARTICULAR ASSESSMENT YEAR WHETHER THE COST OF CONSTRUCTION ALSO BE REDUCED BY THE ASSESSING OFFICER SIMULTANEOUSL Y. WITHOUT PROVIDING THE NATURE OF SUSTENANCE OF THE ADDITION EITHER AS INVESTMENT U/S.69 OR THE SOURCE WHICH COULD LED FOR THIS INVESTMENT WAS WARRANTING UNDER THE PROVISIONS OF SECTION 147/148 COULD BE ADDED IN THE HANDS WHEN THE ASSESSEE EXPLAINED THE S OURCES OF INVESTMENT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. AS MENTIONED EARLIER, WE HAVE OBSERVED THAT THE DIFFERENCE BETWEEN THE TWO HAS NARROWED DOWN AND IT WAS NOT THE CASE OF THE ASSESSING OFFICER TO MAKE A DOUBLE ADDITION AS UNEXPLAINED CASH C REDIT U/S.69C OR UNEXPLAINED INVESTMENT IN THE PROPERTY U/S.69 HAVING ACCEPTED THE SOURCE U/S.68 . THE LEARNED COUNSEL FOR THE ASSESSEE HAS FURNISHED THE PAPER BOOK IN HIS COMPUTATION OF THE SOURCES OF INVESTMENT AND THE ULTIMATE INVESTMENT AS PER BOOKS OF AC COUNT REMAINED EXPLAINED WAS PRIMA FACIE BY THE TRIBUNAL IN AN EARLIER ORDER DT.24.1.2008 WHICH WAS TO BE COMPLIED WITH. WE DO NOT FIND ANY INFIRMITY IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE AS OF NOW INSOFAR AS THE LEARNED CIT(A) HAS SE CONDED THE PREDECESSORS APPEAL ORDERS WHICH WAS BEFORE THE TRIBUNAL. WE, THEREFORE, ON THE BASIS OF SUBMISSIONS AND ON THE BASIS OF FACTS BROUGHT ON RECORD, ARE INCLINED TO HOLD THAT THE ADDITIONS MADE I.T.A.NO. 255,256 AND 257/CTK/2012 11 BY THE ASSESSING OFFICER IN THESE THREE AYS UNDER CON SIDERATION AS UNEXPLAINED INVESTMENT CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE WHEN THE ADDITIONS ARE MORE THAN THE DIFFERENCE BETWEEN THE DEPRECIATED ASSET AND THE RELIEF GRANTED AND THE DVOS REPORT WHICH LEAD S TO THE FINDING THAT NO CONTROVERTING MAT ERIAL HAS BEEN FOUND BY THE ASSESSING AUTHORITIES TO BE TAXED AS UNEXPLAINED INVESTMENT U/S.69 WHEN OBVIOUSLY A PORTION OF SECTION 68 ADDITION HAS BEEN SUSTAINED WOULD BE DOUBLE TAXATION IN THE HANDS OF THE ASSESSEE. FOR THE REASONS DISCUSSED ABOVE, WE SET ASIDE THE IMPUGNED ORDERS OF THE LEARNED CIT(A) AND DELETE THE ADDITIONS MADE OF ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN THE PROPERTY IN QUESTION IN ALL THE THREE AYS UNDER CONSIDERATION . 6. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWE D. S D/ - S D/ - ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DATE: 31.08.2012 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : SUBASH KUMAR PATRO, GUNUPUR, RAYAGADA 2 / THE RESPONDENT: INCOME - TAX OFFICER, RAYAGADA WARD, RAYAGADA. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY. I.T.A.NO. 255,256 AND 257/CTK/2012 12 APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 30.08.2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER 30.08.2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 31.08.2012 . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.08.2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER ..