Immaculate Judith, Neyveli V. ACIT Cuddalore Circle, Cuddalore

ITA 2992/CHNY/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7057 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 06-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: J PRABHAKAR
• Keywords: Reopening of assessment; Additional evidence; Valuation report
• Section: 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , , ' BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2992/CHNY/2017 /ASSESSMENT YEAR: 2012-13 SMT.IMMACULATE JUDITH, C/O. SHRI J.PRABHAKAR, CHARTERED ACCOUNTANT, RESIDENCY APARTMENTS, 245, T.T.K.ROAD, ALWARPET, CHENNAI-600 018. VS. THE ASST. COMMISSIONER- OF INCOME TAX, CUDDALORE CIRCLE, CUDDALORE. [PAN: AAJPI 9414 P ] ( ) /APPELLANT) ( *+) /RESPONDENT) ) , / APPELLANT BY : MR.J.PRABHAKAR, FCA *+) , /RESPONDENT BY : MR. R.CLEMENT RAMESH- KUMAR, ADDL.CIT , /DATE OF HEARING : 25.07.2019 , /DATE OF PRONOUNCEMENT : 25.07.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, I N ITA NO.73/CIT(A)- PDY/2016-17 DATED 24.10.2017 FOR THE AY 2012-13. ITA NO.2992/CHNY/2017 :- 2 -: 2. MR. R.CLEMENT RAMESH KUMAR, ADDL.CIT, REPRESENTED ON BEHALF OF THE REVENUE AND MR.J.PRABHAKAR, FCA, REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING CONCISE GROUNDS OF APPEAL: 1. THE HON'BLE C.I.T.(A) IS NOT JUSTIFIED IN UPHOLD ING THE REOPENING OF ASSESSMENT WHEN NO SPEAKING ORDER WAS PASSED ON OBJECTIONS THE RETO VIOLATING THE DECISION OF APEX COURT IN [2003] 259 ITR 19 (SC) AND THE JURISD ICTIONAL HIGH COURT IN [2018] 401 ITR 215 (MAD). 2. THE HON'BLE C.I.T.(A) IS NOT JUSTIFIED IN SUSTAI NING THE REOPENED ASSESSMENT BASED ON FLIMSY GROUNDS WITHOUT ESTABLISHING THE LI VE LINK BETWEEN THE BASIS FOR REOPENING AND THE MATERIALS AVAILABLE ON RECORD FOR FORMATION OF CREDIBLE BELIEF OF INCOME ESCAPING ASSESSMENT. 3.. THE HONBLE C.I.T.(A) IS NOT JUSTIFIED IN SUSTA INING THE DISALLOWANCE OF COST OF CONSTRUCTION FOR COMPOUND WALLS AT RS.17.30 LAKHS , BOREWELL FOR 3.5 LAKHS, CAR SHED FOR RS.1,71,882/- AND COST OF IMPROVEMENTS FOR RS.20.50 LAKHS WITHOUT DUE REGARD THE MAINTENANCE OF ACCOUNTS ONLY FOR A 6 YEA RS WINDOW IN TERMS OF RULE 6P OF THE INCOME TAX RULES. 4. THE HON'BLE C.L.T.(A) IS NOT JUSTIFIED IN APPROV ING AN INCHOATE AND ILLEGAL VALUATION REPORT FOR DETERMINING COST OF CONSTRUCTI ON AND DISREGARDING THE VALUATION REPORT FURNISHED BY THE APPELLANT, ON FRI VOLOUS GROUNDS. 5. THE HON'BLE C.I.T.(A) IS NOT JUSTIFIED IN SUSTAI NING THE VALUE ADOPTED UNDER SECTION 50 C IN UTTER DISREGARD TO THE VALID OBJECT IONS RAISED ON PRIORS REFERENCE TO S.R.O. AS WELL AS ILLEGAL VALUATION THREAT ON THE A PUDANT ON THE PENULTIMATE DATA OF TIME BAR. 6. THE HON'BLE C.I.T.(A) HAS NO BASIS TO APPROVE TH E VALUATION REPORT UNDER SECTION 50 C WORKING OUT GUIDELINE VALUE POST 1/4/2 012 WHEN GUIDELINE VALUE AS ON DATE OF TRANSFER IS STARING EX-FACIE IN THE SAID REPORT ITSELF AT RS.42.15 PER SQ FEET WHOSE VALUE TRANSLATES TO RS.91,80,270/- ONLY AS AGAINST THE EXAGGERATED VERSION OF RS.2,99,10,923/-. 7. IN ANY EVENT, THE ORDER OF THE C.I.T (APPEAL) IS ILLEGAL, ARBITRARY AND MADE WITHOUT DUE REGARD TO PROVISIONS ON REOPENING OF AS SESSMENTS AND RENDERED AT EXAGGERATED VALUES WITHOUT LEGAL STANDING. 8. YOUR APPELLANT CRAVES THE INDULGENCE OF THE HON' BLE I.T.A.T TO FURNISH ADDITIONAL EVIDENCE AS WELL AS SUPPLEMENTAL AND ADDITIONAL GRO UNDS OF APPEAL ON ACCOUNT OF THE RENDITION OF ASSESSMENT CLOSE TO TIME BAR WITHO UT PROPER OPPORTUNITY AND UNILATERAL DECISIONS ON EVIDENCES COLLECTED/ FURNIS HED DURING THE COURSE OF RE- ASSESSMENT PROCEEDINGS. ITA NO.2992/CHNY/2017 :- 3 -: 9. FOR THESE GROUNDS AND FOR SUCH OTHER GROUNDS THA T MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE ASSE SSING OFFICER AND THAT OF THE C.L.T( APPEAL) BE CANCELLED. 4. THE LD.AR DREW OUR ATTENTION TO PAGE NO.15 OF THE PAPER BOOK, WHICH WAS A COPY OF THE REASONS RECORDED FOR THE PU RPOSE OF RE-OPENING. THE SAME IS EXTRACTED HEREIN BELOW: GOVERNMENT OF INDIA INCOME TAX DEPARTMENT OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CUDDALORE CIRCLE S.N CHAVADY. CUDDALORE-607 002 AAJPI 9414 P/148/REASON/2014-15 DATE: 0 3.02.2015 TO SMT. IMMACULATE JUDITH, D-12, BLOCK-13, RABINDRANATH TAGORE ROAD, NEYVELI-607 803. SIR, SUB: INCOME TAX ASSESSMENT- YOUR OWN - AY 2012-20 13 - REASONS FOR REOPENING OF ASSESSMENT - FURNISHING OF REGA RDING. REF: I) NOTICE U/S. 148 DATED 26-11-2014. II) YOUR LETTER DT. 30-12-2014 RECEIVED ON 29-01 -2015. ***** KINDLY REFER TO THE ABOVE. THE REASONS FOR REOPENING YOUR CASE FOR THE ASSESS MENT YEAR 2012-13 IS FURNISHED HEREUNDER AS REQUESTED. ON PERUSAL OF RECORDS, IT IS SEEN THAT YOU HAD CLA IMED LONG TERM CAPITAL GAINS OF RS.47,69,249/- ON THE SALE OF IMMOVABLE PR OPERTY WORTH RS.2.01 CRORES. BUT IT IS NOTED THAT THERE ARE SOME DISCREPANCIES I N DECLARING THE LONG TERM CAPITAL GAIN. IN VIEW OF THE ABOVE, INCOME IS CONSIDERED TO HAVE ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 AND NOTICE U/S.14 8 WAS ISSUED. YOURS FAITHFULLY, SD/- (G. SHOBA. I.R.S.) ASSISTANT COMMISSIONER OF INCOME TAX CUDDALORE CIRCLE, CUDDALORE ITA NO.2992/CHNY/2017 :- 4 -: 5. IT WAS A SUBMISSION THAT THE REASONS RECORDED WERE BALD AND FLIMSY AND THE RE-OPENING AS DONE BY THE AO WAS INVALID. IT WAS A SUBMISSION THAT THE RE-OPENING OF THE ASSESSMENT IS LIABLE TO BE QUASHED. 6. IN REPLY, THE LD.DR SUBMITTED THAT THE ASSESSEE HA D FILED HER RETURN OF INCOME FOR THE RELEVANT AY ON 14.11.2012. IT WA S A SUBMISSION THAT THE SAME WAS PROCESSED U/S.143(1). IT WAS A SUBMIS SION THAT AS THERE WAS AN ERROR IN COMPUTATION OF THE CAPITAL GAINS AS DISCLOSED BY THE ASSESSEE, THE AO HAD RECORDED REASONS FOR THE RELEV ANT AY AND HAD ISSUED THE NOTICE U/S.148 ON 26.11.2014. IT WAS A SUBMISS ION THAT THE ASSESSEE HAD REPLIED TO THE REASONS RECORDED AND HAD OBJECTE D VIDE A LETTER DATED 23.02.2015 AND THE SAME HAD ALSO BEEN REJECTED BY T HE AO. IT WAS A SUBMISSION THAT THE FACT IS THAT THE ADDITIONS IN T HE ASSESSMENT ORDER CLEARLY SHOWS THAT THE RE-ASSESSMENT NOTICE AND THE REASONS RECORDED WERE VALID. IT WAS A SUBMISSION THAT THE RE-OPENIN G OF THE ASSESSMENT WAS LIABLE TO BE UPHELD. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 8. A PERUSAL OF THE REASONS RECORDED CLEARLY SHOWS TH AT THERE IS NOTHING COMING OUT OF THE REASONS TO SHOW WHY THE RE-OPENIN G HAS BEEN PROPOSED. THE AO USES THE WORD SOME DISCREPANCIES . THIS IS VERY VAGUE. THERE HAS TO BE LIVE LINK BETWEEN THE REASO NS RECORDED AND THE ISSUE ON WHICH RE-OPENING IS ACTUALLY DONE. THIS I S ALSO ABSOLUTELY ITA NO.2992/CHNY/2017 :- 5 -: MISSING. THE RE-OPENING CANNOT BE DONE FOR THE PUR POSE OF MAKING FISHING AND ROVING ENQUIRIES. A PERUSAL OF THE REASONS REC ORDED CLEARLY SHOWS THAT THE RE-OPENING HAS BEEN DONE MERELY ON SUSPICION AN D THERE IS NO REFERENCE TO ANY SPECIFIC ISSUE, ON ACCOUNT OF WHIC H, THE AO IS OF THE OPINION THAT THERE IS A DISCREPANCY IN THE DECLARAT ION OF THE LONG TERM CAPITAL GAINS. THIS BEING SO, WE ARE OF THE VIEW T HAT THE RE-OPENING OF THE ASSESSMENT BY RECORDING THE REASONS EXTRACTED ABOVE BY THE AO IS UNSUSTAINABLE AND CONSEQUENTLY, THE RE-OPENING OF T HE ASSESSMENT STANDS QUASHED. NO OTHER GROUNDS HAVE BEEN ARGUED. CONSE QUENTLY, WE ARE NOT ADJUDICATING THE OTHER ISSUES AS RAISED IN THE GROU NDS OF APPEAL. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON THE 25 TH DAY OF JULY, 2019 IN CHENNAI. SD/- SD/- ( ) ( INTURI RAMA RAO ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 3 /DATED: 25 TH JULY, 2019. TLN , *45 65 /COPY TO: 1. ) /APPELLANT 4. 7 /CIT 2. *+) /RESPONDENT 5. 5 * /DR 3. 7 ( ) /CIT(A) 6. /GF