Smt. Sunita Bholaram Gadia, Surat V. The Income tax Officer,Ward-1(2), Surat

ITA 2831/AHD/2011

• Counselvise Citation: 283120514 RSA 2011
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 16-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Value adopted by valuation officer
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.2831/AHD/2011 ASSESSMENT YEAR:2008-09 SMT. SUNITA BHOLARAM GADIA 3001, J.J.A.C. MARKET, RING ROAD, SURAT-395002 PAN NO.AAPPG6013Q V/S . INCOME TAX OFFICER, WARD-1(2), SURAT (APPELLANT) .. (RESPONDENT) / BY APPELLANT SHRI RAMESH MALPANI, AR / BY RESPONDENT SHRI VINOD TANWANI, SR-DR / DATE OF HEARING 28-02-2012 / DATE OF PRONOUNCEMENT 16-03-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THE INSTANT APPEAL HAS BEEN FILED AGAINST THE ORDE R OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, SURAT FOR T HE ASSESSMENT YEAR 2008- 09, WHEREBY THE GROUNDS OF APPEAL OF THE ASSESSEE W ERE DISMISSED. THE FACTUAL MATRIX OF THIS CASE IN BRIEF IS STATED AS U NDER:- 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADI NG OF ART SILK CLOTH DURING THE FINANCIAL YEAR 01-04-2007 TO 31-03-2008. THE RETURN OF INCOME WAS FILED ON 08-09-2008 BY DECLARING A TOTAL INCOME OF RS.1,48,910/-. THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND NOTICE U /S.142(1) WAS ISSUED BY ITA NO.2831/AHD/2011 A.Y. 2008-09 SMT. SUNITA B GADIA V. ITO WD-1(2) SRT PAGE 2 THE ASSESSING OFFICER. THE ASSESSEE HAD SHOWN TOTAL TURNOVER AT RS.1,28,076/- WITH GROSS PROFIT OF RS.7,320/- WHICH COMES TO 5.75% AS AGAINST 5.03% SHOWN IN THE EARLIER YEAR ON TURNOVER OF RS.1 ,43,571/- WITH GP OF RS.7,610/-. DURING THE ASSESSMENT PROCEEDINGS THE A UTHORIZED REPRESENTATIVE OF THE ASSESSEE BEFORE THE ASSESSING OFFICER SUBMITTED THAT HOUSE PROPERTY BEARING NO. FLAT NO.204/A AND 204-B OF AMAR SWAPNA APARTMENT, ATHWA, WARD NO.13 WERE PURCHASED DURING THE YEAR UNDER CONSIDERATION AT VALUE OF RS.4,30,370/- INCLUDING T HE STAMP DUTY. THE ASSESSMENT PROCEEDINGS WERE COMPLETED VIDE ASSESSME NT ORDER DATED 31-12- 2010. THE AO DID NOT ACCEPT THE VALUATION OF AFOREM ENTIONED PROPERTIES AS GIVEN BY ASSESSEE. HE REFERRED THE MATTER TO DISTRI CT VALUATION OFFICER (DVO IN SHORT) AND SOUGHT HIS REPORT. THE DVO VALUED THE PR OPERTIES IN QUESTION AT RS.9.72 LAKH. HENCE, THERE WAS DIFFERENCE OF RS.5.7 2 LAKH IN THE VALUE DECLARED BY THE ASSESSEE AND VALUATION MADE BY DVO. THE DVO VALUED THE PROPERTY AT RS.9.72 LAKH. THE AO TREATED THE DIFFER ENCE AS UNEXPLAINED INVESTMENT AND ADDED BACK TO THE INCOME OF THE ASSE SSEE U/S.68B OF THE ACT. 3. THE ASSESSEE FEELING AGGRIEVED BY THE ORDER OF A SSESSING OFFICER AND PREFERRED APPEAL BEFORE LD. CIT(A) FOLLOWING GROUND S:- GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED A.O HAS ERRED IN REFERRING THE PURCHASE OF PROPERTY TO DVO U/S. 142A OF THE ACT WHICH IS BAD IN LAW AND BEYOND THE LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED A.O HAS ERRED IN MAKING ADDITION OF RS.5,72,000/- U /S. 69B OF THE ACT AS UNEXPLAINED INVESTMENTS ON BASIS OF DVO REPORT W ITHOUT ANY FINDING OF ANY UNEXPLAINED INVESTMENT ACTUALLY MADE . 3. WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPEAL, TH E APPELLANT SUBMITS THAT VALUATION MADE BY DVO IS VERY HIGH AND EXCESSI VE AND ADDITION MADE BY LD. AO ON BASIS OF SUCH VALUATION IS WRONG, INCORRECT AND UNJUSTIFIED. 4. THAT LD. AO HAS ERRED IN CHARGING INTEREST U/S. 234B AND 234C OF THE ACT. ITA NO.2831/AHD/2011 A.Y. 2008-09 SMT. SUNITA B GADIA V. ITO WD-1(2) SRT PAGE 3 4. IT IS NOTICED FROM THE IMPUGNED ORDER THAT SAME IS CRYPTIC THIS FACT IN ALL FAIRNESS IS ADMITTED BY LD. DR. THE RELEVANT CONTEN TS OF THE IMPUGNED ORDER ARE REPRODUCED AS HEREINBELOW:- 1. GROUND NO.1 HAVING CONSIDERED THE ARGUMENTS OF APPELLANT AS WEL L AS THE FACT MENTIONED BY A.O IN THE ASSESSMENT ORDER, IT IS HEL D THAT REFERENCE MADE TO THE DVO IS IN ORDER. THIS GROUND OF APPEAL IS DISMISSED. 2. GROUND NO.2 THE A.O HAS ADVANCED COGENT REASONS FOR MAKING ADDI TION OF RS.5,72,000/- TO THE INCOME OF APPELLANT. THE A.O H AS PROPERTY ANALYZED THE FACTS AND THEN MADE THE ADDITION BY GI VING COGENT REASONS. THEREFORE, ADDITION OF RS.5,72,000/- IS SU STAINED. THIS GROUND IS DISMISSED. 3. GROUND NO.3 RELEVANT ARGUMENTS HAVE BEEN CONSIDERED. AFTER CONS IDERING FACT OF THE CASE, IT IS HELD THAT VALUATION BY DVO IS NOT EXCES SIVE. THE VALUATION HAS BEEN PROPERLY DONE. THIS GROUND IS DISMISSED. 4. GROUND NO.4 THE ARGUMENTS HAVE BEEN CONSIDERED. THE A.O IS DIR ECTED TO CHARGE INTEREST AS PER LAW. THIS GROUND IS PARTLY ALLOWED. IN THE RESULT, APPEAL IS PARTLY ALLOWED. 5. HOWEVER, LD. COUNSEL FOR THE ASSESSEE ARGUED ON MERIT OF THE CASE AND RELIED UPON THE FOLLOWING JUDGMENTS:- (1) SARGAM CINEMA V. CIT (2010) 328 ITR 513 (SC) (2) CIT V. SURAJ DEVI (2010) 328 ITR 604 (DEL) (3) CIT V. PUNEET SABHARWAL (2011) 338 ITR 485 (DE L) (4) FOREMOST FINVEST PVT. LTD. V. ITO ITA NO.2826/AHD/2008 DT.18/6/10 LD. AR FOR THE ASSESSEE ARGUED THAT ADMITTEDLY HIS BOOKS OF ACCOUNT WERE NOT REJECTED BY THE ASSESSING OFFICER AND IN THE LIGHT OF JUDGMENTS AS RELIED ABOVE THE ORDER OF AO IS PATENTLY ERRONEOUS AND DESERVES TO BE QUASHED. ITA NO.2831/AHD/2011 A.Y. 2008-09 SMT. SUNITA B GADIA V. ITO WD-1(2) SRT PAGE 4 6. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE LD. AR FOR THE ASSESSEE PERUSED THE RECORDS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE JUDGMENTS CITED BY LD. AR . HAVING CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE FACT THAT ORDER OF LD. CIT(A) IS NOT A SPEAKING ORDER AND IS DEVOID OF REA SONING. WE ARE OF THE VIEW THAT IT WOULD SUBSERVE THE INTEREST OF JUSTICE IF T HE MATTER IS THE MATTER SHOULD BE REMITTED BACK TO THE FILE OF LD. CIT(A) FOR DE N OVO HEARING. THE PARTIES ARE AT LIBERTY TO MAKE THEIR SUBMISSIONS BEFORE THE LD. CIT(A). HENCE, THE ORDER OF LD. CIT(A) IS SET ASIDE THE MATTER IS REMITTED BACK TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO PASS A SPEAKING ORDER IN RESPECT OF ALL THE GROUNDS AS RAISED BY THE ASSESSEE AFTER GIVING OPPORTUNITY OF HEARING TO THE PARTIES. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 16/03 /2012 SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP - 16/03/2012 ()* + ,- ,- ,- ,- ../ ../ ../ ../ 0/ 0/ 0/ 0/ / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. *.2 , ,3 / CONCERNED CIT 4. , ,3- / CIT (A) 5. /67 ...2, , .2 , ()* / DR, ITAT, AHMEDABAD 6. 79: ;< / GUARD FILE. BY ORDER/ ,- , /TRUE COPY/ =/ ( > , .2 , ()* +