The DCIT, Central Circle-4, Surat V. Ess En Organisors Pvt.Ltd., Surat

ITA 2683/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94696 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-11-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 27-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Keywords: Value adopted by valuation officer; Valuation report; Reassessment proceedings
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO: 2683/AHD/2011 (ASSESSMENT YEAR: 2003-04) THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-4, SURAT V/S ESS EN. ORGANISORS PVT. LTD. HOUSE NO. 1, RATHI PALACE, RING ROAD, SURAT (APPELLANT) (RESPONDENT) PAN: AABCE 1069K APPELLANT BY : SHRI DINESH SINGH, SR. D.R RESPONDENT BY : NONE (WRITTEN SUBMIS SIONS) ( )/ ORDER DATE OF HEARING : 04-11-2015 DATE OF PRONOUNCEMENT : 17 -11-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-II, AHMEDABAD DATED 09.08.2011 FOR A.Y. 2003-04. ITA NO 2683/ AHD/2011 . A.Y. 2003-04 2 2. IN THIS CASE, NONE APPEARED ON BEHALF OF ASSESSEE B UT HOWEVER WRITTEN SUBMISSIONS WERE FILED BY THE ASSESSEE. WE THEREFOR E PROCEED TO DECIDE THE APPEAL, EX PARTE QUA THE ASSESSEE ON THE BASIS OF M ATERIAL ON RECORD AND WRITTEN SUBMISSIONS. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 4. ASSESSEE IS A COMPANY STATED TO BE ENGAGED AS BUILD ERS. ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME FOR A.Y. 2003-04 ON 31.10 .2005 DECLARING LOSS OF RS. 1,25,353/-. THE ASSESSMENT WAS FRAMED UNDER SEC TION 143(3). LATER DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y . 06-07 REFERENCE WAS MADE TO THE DVO FOR ESTIMATING THE COST OF CONSTRUC TION INCURRED BY THE ASSESSEE IN THE PROJECT KNOWN AS RATHI PALACE AT SURAT. ON THE BASIS OF DVO REPORT DATED 15.12.2007 AN ADDITION OF RS. 15,9 5,695/- (BEING THE DIFFERENCE BETWEEN THE COST ESTIMATED BY THE DVO AN D THAT REFLECTED IN THE RETURN) WAS MADE IN THE ORDER PASSED U/S. 143(3) IN A.Y. 06-07. IT WAS NOTICED BY A.O THAT IN THE VALUATION REPORT DVO HAS ALSO ESTIMATED THE COST OF CONSTRUCTION AS ON 31.03.2003 AT RS. 2,70,49,608 /- AS AGAINST THE COST DECLARED BY THE ASSESSEE IN THE RETURN AT RS. 2,21, 66,871/- RESULTING IN DIFFERENCE OF RS. 48,82,737/-. IN VIEW OF THE AFORE SAID FACT, THE CASE WAS REOPENED BY ISSUING NOTICE U/S. 148 AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) R.W.S. 147 VIDE ORDER DATED 31.1 2.2010 AND THE TOTAL INCOME WAS DETERMINED AT RS. 47,57,390/-. AGGRIEV ED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO V IDE ORDER DATED 9.08.2011 ALLOWED THE APPEAL OF THE ASSESSEE BY HOL DING AS UNDER:- 4.I HAVE CONSIDERED THE REASONS MENTIONED BY THE A. O. IN THE RE-ASSESSMENT ORDER AND ALSO GONE THROUGH THE DETAILED ARGUMENTS AND PAPER BOOK PRESENTED ITA NO 2683/ AHD/2011 . A.Y. 2003-04 3 ON BEHALF OF THE APPELLANT. FROM THE COPY OF DVO'S VALUATION REPORT DATED 15-12- 2007 IT IS CLEAR THAT THE REFERENCE WAS MADE TO HIM -BY THE ADIT(LNV)-LLL, SURAT U/S. 142A OF THE ACT. I FIND THAT THE ISSUE OF VALIDITY OF DVO'S VALUATION REPORT IN THIS CASE HAS ALREADY BEEN DECIDED BY HON'BLE ITAT, 'C'- BENCH, AHMEDABAD, IN ASSESSEE OWN CASE FOR A.Y. 2006-07 IN ITAT NO. 1551 /AHD/2010 IN WHICH HON'BLE ITAT HAS HELD AS UNDER; '6. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE T HAT THE ADIT (INV.) MADE THE REFERENCE TO DVO UNDER SECTION 142A ON 24.3.200 6. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF UMIYA COOPERATIVE HOUSING SOCIETY LTD. (SUPRA) REPORTED IN 314 ITR 272 HELD THAT WHEN NO A SSESSMENT AND/OR RE- ASSESSMENT PROCEEDINGS ARE PENDING, THE AO CANNOT R EFER ANY MATTER FOR VALUATION OF PROPERTY OF AN ASSESSEE UNDER SECTION 142A. ADMITTEDLY, IN THIS CASE, WHEN REFERENCE TO DVO BY THE ADIT (INV.) WAS MADE ON 24.03.2006, NO ASSESSMENT WAS PENDING AS THE PREVIO US YEAR ENDED ON 31.03.200.6. THE ITAT, LUCKNOW 'A' BENCH, IN THE CA SE OF GOPI APARTMENTS-VS-ACIT REPORTED IN 132 TTJ 249 (LUCKNOW ) ALSO HELD THAT REFERENCE TO VALUATION CELL UNDER SECTION 142A CAN BE MADE ONLY WHEN THE PROCEEDINGS OF ASSESSMENT OR ASSESSMENT ARE PENDING BEFORE THE AO AND NOT OTHERWISE. 6.1 FOR THE AFORESAID REASON, WE HOLD THAT REFERENC E, MADE BY THE ADIT (INV.) TO DVO, WHEN NO ASSESSMENT FOR THE ASSESSMEN T YEAR WAS PENDING ON 24.03.2006, IS BAD IN LAW AND ON THIS GROUND WE DELETE THE ADDITION OF RS. 15,96,695/-MADE BY THE AO AND CONFIRMED BY THE ID. CIT(A), IN THE IMPUGNED ORDER. THEREFORE, THE APPEAL OF THE ASSESS ES IS ALLOWED. ' 5. RESPECTFULLY FOLLOWING THE. AFORESAID ORDER OF H ON'BLE ITAT IN ASSESSEE'S OWN CASE, I HOLD THAT THE DVO'S VALUATION REPORT WAS BA D-IN-LAW AND CONSEQUENTLY NO ACTION COULD BE TAKEN ON THE BASIS OF SAID REPORT O F DVO, CONSEQUENTLY, THE RE- ASSESSMENT PROCEEDINGS ARE ALSO HELD TO BE BAD-IN-L AW AND ARE HEREBY QUASHED AND ADDITION MADE OF RS.48,82,737/- ON THE BASIS OF THIS REPORT OF DVO IS HEREBY DELETED. ITA NO 2683/ AHD/2011 . A.Y. 2003-04 4 5. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), RE VENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN H OLDING THAT THE REASSESSMENT PROCEEDINGS U/S.147 OF THE I.T. ACT WERE BAD IN LAW AND IN QUASHING THE SAME AS A RESULT OF WHICH THE ADDITION OF RS.48,82,737/- ON ACCOUNT OF EXCESS INVESTMENT NOT RECORDED IN THE BOOKS OF ACCOUNT HAS BEEN DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT (A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 6. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF A.O. 7. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE ALLOWING THE APPEAL OF THE ASSESS EE HAS NOTED THAT THE ISSUE OF VALIDITY OF DVOS VALUATION REPORT IN ASSE SSEES OWN CASE WAS DECIDED BY THE HONBLE TRIBUNAL FOR A.Y. 06-07 IN I TA NO. 1551/A/2010 IN ASSESSEES FAVOUR AND HE FOLLOWING THE AFORESAID OR DER OF HONBLE TRIBUNAL HELD HAT NO ACTION COULD BE TAKEN ON THE BASIS OF D VOS REPORT AND HELD THE RE-ASSESSMENT PROCEEDINGS TO BE BAD IN LAW AND QUAS HED THE SAME. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD T O DEMONSTRATE ANY FALLACY IN THE CONCLUSION OF LD. CIT(A). IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH ORDER OF LD. CIT(A ) AND THUS THE GROUND OF REVENUE IS DISMISSED. ITA NO 2683/ AHD/2011 . A.Y. 2003-04 5 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 17 - 11 - 2015. SD/- SD/- (RAJPAL YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: 17/11/2015 TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD