Lakhi Ram, V. ITO, Ward-2,

ITA 2624/DEL/2003

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52698 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 20-09-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 20-05-2003
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR SENIOR
• Keywords: Question of law; Valuation report
• Section: 131; 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I : NEW DELHI) SMT. DIVA SINGH, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2624/DEL./2003 (ASSESSMENT YEAR : 1998-99) SHRI LAKHI RAM, VS. ITO, WARD 2, PROP. M/S. BHARAT TEXTILE INDUSTRIES, PANIPAT. 416/9, PANIPAT. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : DR. B.R.R. KUMAR, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDE R OF CIT (APPEALS), KARNAL DATED 19.02.2003 FOR THE ASSESSMENT YEAR 199 8-99. THE GROUNDS OF APPEAL READ AS UNDER :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED C.I.T. (APPEALS) ERRED IN CONFIRMING THE ADDITION O F RS.50827/- ON ACCOUNT OF DIFFERENCE IN THE ESTIMATED COST OF C ONSTRUCTION IN THE FACTORY BUILDING, WHERE AS COMPLETE BOOKS OF AC COUNT WERE MAINTAINED BY THE ASSESSEE. THE ASSESSEE RELIED UP ON JUDGMENT OF HON'BLE DELHI/RAJASTHAN HIGH COURT IN THE CASE O F (1) C.I.T. VS. PARTAP SINGH 200-I.T.R.-788 (RAJ) (2) C.I.T. VS. VINOD DAN CHAND GHODAWAT 247-ITR 448 (BOM.) (3) C.I.T. VS. DR. S. BHARTI (2002) 254-ITR 261 ( DEL.) ITA NO.2624/DEL./2003 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. C.I.T. (APPEALS) HAS NOT APPRAISED THE FACTS OF THE CASE F ULLY AND ALLOWED A RELIEF OF RS.5000/- ONLY OUT OF THE ADDIT ION MADE IN THE TRADING ACCOUNT AT RS.25,000/-; THEREBY, CONFIRMING THE ADDITION OF RS.20000/-. THE ADDITION IN TRADING ACCOUNT HAS BEEN MADE BY THE A.O. ON ESTIMATED BASIS TO PLUG THE LEAKAGE OF PROFIT WITHOUT SPECIFYING ANY DEFECTS IN THE BOOKS OF ACCO UNT. 3. THE ASSESSEE CRAVES LEAVE TO ADD ANY GROUND OF A PPEAL AT THE TIME OF HEARING. 2. THE ISSUE INVOLVED IN THE APPEAL IS CONFIRMING T HE ADDITION OF RS.50,827/- ON ACCOUNT OF DIFFERENCE IN THE COST OF CONSTRUCTION IN THE FACTORY BUILDING. 3. THE ITAT DELETED THE ADDITION BY HOLDING THAT TH E REFERENCE TO THE VALUATION OFFICER U/S 131(1)(D) OF THE ACT IS INVAL ID IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF AMIYA BALA PAU L, 262 ITR 385. AGAINST THIS ORDER, THE REVENUE WENT IN APPEAL BEFO RE THE HON'BLE PUNJAB & HARYANA HIGH COURT WHEREIN THE SUBSTANTIAL QUESTION OF LAW RAISED WAS AS UNDER :- I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT THE CASE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE JUDGM ENT OF HONBLE SUPREME COURT IN THE CASE OF SMT.AMIYA BALA PAUL V. CIT (2003) 262 ITR 407 (SC) ESPECIALLY WHEN THE REF ERENCE WITH REGARD TO THE CONSTRUCTION OF HOUSE BUILDING W AS MADE TO THE VALUATION OFFICER UNDER SECTION 131 (1) (D) AND NOT UNDER SECTION 55A OF THE INCOME TAX ACT, 1961 AND ALSO NE WLY ADDED PROVISIONS OF SECTION 142A IN THE INCOME TAX ACT, 1961? ITA NO.2624/DEL./2003 3 THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS DECIDED THE QUESTION OF LAW AS UNDER : 5. LEARNED COUNSEL FOR THE REVENUE SUBMITTED THAT SECTION 142A BEING RETROSPECTIVE FROM 15.4.1972 APPLIED FOR THE ASSESSMENT YEAR IN QUESTION AND THE ASSESSING OFFICER WAS JUSTIFIED IN ACTING UPON A VALUATION REPORT AND THE TRIBUNAL HAS BASED ITS DEC ISION ON JUDGMENT IN SMT.AMIYA BALA PAUL WHICH DECISION HAS BEEN SUPERSEDED BY THE AMENDMENT. THE PROVISO WAS NOT APPLICABLE AS THE AS SESSMENT HAD NOT BECOME FINAL AND CONCLUSIVE IN VIEW OF PENDENCY OF APPEAL IN THIS COURT. RELIANCE HAS BEEN PLACED ON JUDGMENT OF MADHYA PRAD ESH HIGH COURT IN CIT V. OMPARKASH BAGRIA (HUF), (2006) 287 ITR 523, WHEREIN IT WAS HELD THAT PENDENCY OF APPEAL UNDER SECTION 260A OF THE ACT BEFORE HIGH COURT WOULD EXCLUDE THE APPLICABILITY OF THE PROVIS O. APPEAL WAS CONTINUATION OF ASSESSMENT PROCEEDINGS AS HELD IN GARIKAPATI V. SUBBIAH CHOUDHRY, AIR 1957 SC 540, SIEMENS INDIA LIMITED V. STATE OF MAHARASHTRA (1986) 62 STC 40 (BOM) AND CIT V. BENGAL CARD BOARD INDUSTRIES AND PRINTERS(P) LIMITED , (1989) 176 ITR 193 (CAL). 6. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT PR OVISO WAS APPLICABLE AS PENDENCY OF APPEAL IN THIS COURT DID NOT AFFECT THE FINALITY OF PROCEEDINGS AS APPEAL TO THIS COURT WAS ONLY ON A S UBSTANTIAL QUESTION OF LAW WHICH SHOULD BE SEEN INDEPENDENTLY OF THE AMEND ING PROVISION. RELIANCE HAS BEEN PLACED ON FOLLOWING JUDGMENTS:- I) CIT V. SMT.SHASHI AGARWAL , (2007) 210 CTR (ALL) 205; II) CIT V. SUDHISH KUMAR, (2005) 276 ITR 563 (DEL) III) CIT V. NAVEEN GERA, (2010) 328 ITR 516 (DEL) IV) CIT V. KRISHAN LAL DUA , (2005) 277 ITR 477 (P&H) V) CIT (CENTRAL) LUDHIANA V. NABHA SOLVEX (P) LIMITED, ITR NO.48 OF 1994, DECIDED ON 7.7.2010 (P&H). VI) INCOME TAX OFFICER AND OTHERS V. KAJARIA INVESTMENT AND PROPERTIES P.LIMITED , (2008) 297 ITR 45 (CAL). 7. THUS, THE QUESTION FOR CONSIDERATION IS WHETHER PROVISO WOULD APPLY WHEN BEFORE SEPTEMBER 30, 2004, APPEAL UNDER SECTION 260A WAS PENDING IN THE HIGH COURT. 8. WE ARE OF THE VIEW THAT PENDENCY OF APPEAL IN TH IS COURT UNDER SECTION 260A WOULD EXCLUDE THE APPLICABILITY OF THE PROVISO. THE PROVISO CAN APPLY ONLY IF ASSESSMENT HAS BECOME FINAL AND C ONCLUSIVE BEFORE SEPTEMBER 30, 2004. IF APPEAL IS PENDING IN THIS CO URT, IT CANNOT BE SAID THAT THE ASSESSMENT HAD BECOME FINAL AND CONCLUSIVE . APART FROM THE FACT THAT APPEAL IS CONTINUATION OF THE PROCEEDINGS AS H ELD BY THE MADHYA PRADESH HIGH COURT, SECTION 254(4) SPECIFICALLY PRO VIDES THAT FINALITY TO THE ORDER OF THE TRIBUNAL WILL BE ONLY SUBJECT TO S ECTION 256 OR 260A. IN THE JUDGMENTS RELIED UPON ON BEHALF OF THE ASSESSEE EXCEPT IN SMT.SHASHI ITA NO.2624/DEL./2003 4 AGARWAL , THERE IS NO DISCUSSION ON THE ISSUE WHETHER INSPI TE OF PENDENCY OF AN APPEAL UNDER SECTION 260A ON THE CUT OFF DATE , THE PROVISO WILL APPLY. IN NABHA SOLVEX , SECTION 254(4) WAS NOT CONSIDERED AND THE MATTER WAS CONSIDERED ON A REFERENCE. IN SMT. SHASHI AGARWAL , THE ALLAHABAD HIGH COURT HELD THAT PENDENCY OF APPEAL I N THE HIGH COURT UNDER SECTION 260A OF THE ACT WILL NOT AFFECT FINAL ITY OF THE ASSESSMENT AS APPEAL UNDER SECTION 260A WAS ONLY ON A SUBSTANTIAL QUESTION OF LAW AND WAS NOT CONTINUATION OF ASSESSMENT PROCEEDINGS. WE RESPECTFULLY DISAGREE WITH THE SAID VIEW AND AGREE WITH THE VIEW TAKEN BY THE MADHYA PRADESH HIGH COURT HOLDING THAT APPEAL UNDER SECTIO N 260A IS ALSO CONTINUATION OF PROCEEDINGS. AS ALREADY OBSERVED, S ECTION 254(4) SPECIFICALLY PROVIDES THAT FINALITY OF ORDER OF THE TRIBUNAL IS SUBJECT TO APPEAL UNDER SECTION 260A OF THE ACT. 9. IN VIEW OF ABOVE, WE ANSWER THE QUESTIONS RAISED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. 10. SINCE THE TRIBUNAL HAS NOT CONSIDERED THE MERIT S OF THE VALUATION REPORT, THE MATTERS ARE REMITTED TO THE TRIBUNAL FO R FRESH DECISION IN ACCORDANCE WITH LAW. THUS, THE MATTER WAS REMANDED TO THE ITAT FOR FRESH DECISION ON MERITS OF THE VALUATION REPORT. FOR THIS PURPOSE, THIS CASE WAS FIXED FOR HEARING FOR 20 TH SEPTEMBER, 2011 BY ISSUING A NOTICE AT THE FOLLOWIN G ADDRESS :- SHRI LAKHI RAM, PROP. M/S. BHARAT TEXTILE INDUSTRIES, 416/9, PANIPAT (HARYANA). 4. TODAY I.E. ON 20.09.2011 WHEN THE CASE WAS CALLE D ON BOARD, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY REQUEST FOR ADJOURNMENT HAS BEEN FILED BEFORE THE TRIBUNAL. IT SEEMS THAT THE ASSE SSEE IS NOT INTERESTED IN PROSECUTING THE APPEAL; HENCE, THE APPEAL FILED BY THE ASSESSEE IS LIABLE TO BE UNADMITTED AND DISMISSED, FOR NON-PROSECUTION. THE LAWS ASSIST THOSE WHO ARE VIGILANT AND NOT THOSE WHO SLEEP OVER THEIR RIGHTS. CONSIDERING THESE FACTS AND KEEPING IN MIND THE PROVISIONS OF RULE 19 (2) OF THE ITAT RULES, AS ITA NO.2624/DEL./2003 5 WERE CONSIDERED IN THE CASE OF MULTIPLAN INDIA, REP ORTED IN 38 ITD 320 (DEL) AND IN VIEW OF THE DECISION OF THE MADHYA PRADESH H IGH COURT IN THE CASE OF ESTATE OF LATE TUKOJI RAO HOLKAR, REPORTED IN 223 I TR 480, WE DISMISS THIS APPEAL IN LIMINE. THE ASSESSEE, IF SO ADVISED, SHA LL BE FREE TO MOVE THIS TRIBUNAL PRAYING FOR RECALLING OF THE ORDER AND EXP LAINING THE REASONS ETC. FOR NON-COMPLIANCE AND IF THE BENCH IS SO SATISFIED ABO UT THE REASONS ETC., THEN THIS ORDER MAY BE RECALLED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 20 TH DAY OF SEPTEMBER, 2011 AFTER CONCLUSION OF THE HEARING. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 20 TH DAY OF SEPTEMBER, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), KARNAL. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.