Income Tax Officer, 2(2), Lucknow V. M/s Mangalam Cold Storage and Allied Industries, Lucknow

ITA 313/LKW/2013

• Counselvise Citation: 31323714 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 01-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Depreciation; Valuation report
• Section: 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.313/LKW/2013 ASSESSMENT YEAR:2005 - 06 M/S MANGLAM COLD STORAGE AND ALLIED INDUSTRIES, 4 GANPATI HOUSE, MADAN MOHAN MALVIYA MARG, LUCKNOW. PAN:AAOFM2066N VS INCOME TAX OFFICER - 2(2), LUCKNOW. (RESPONDENT) (APPELLANT) SHRI AMIT NIGAM, D. R. APPELLANT BY SHRI SHUBHAM RASTOGI, C. A. RESPONDENT BY 08/01/2015 DATE OF HEARING 24 /02/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I, LUCKNOW DATED 06/02/2013 FOR THE ASSESSMENT YEAR 2005 - 2006. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ANNULLING THE ASSESSMENT FRAMED BY THE AO U/S 143(3)/148 WITHOUT APPRECIATING THE FACT THAT THE AO HAD REOPENED THE ASSESSMENT ON THE BASIS OF DIFFERENCE NOTICED BY HIM IN THE BOOKS OF A/C OF THE ASSESSEE VIS - A - VIS REPORT OF THE APPROVED VALUER SUBMITTED BY THE ASSESSEE ITSELF AND HAD DULY APPLIED HIS MIND ON THE ISSUE AS WELL AS ANALYZED THE DIFFERENCE WHILE REOPENING THE CASE U/S 147 OF THE ACT. 2 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. HE ALSO SUBMITTED THAT IT IS NOTED BY THE ASSESSING OFFICER IN FIRST PARA OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS FURNISHED VALUATION REPORT OF THE VALUER SHRI ANIL KUMAR DINESH DATED 12/04/2005 IN RESPE CT OF COLD STORAGE BUILDING WHEREIN THE VALUE OF BUILDING CONSTRUCTION IS SHOWN AT RS.1,15,01,478/ - BUT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, THE INVESTMENT HAS BEEN SHOWN AT RS.84,11,889/ - , WHICH IS WITHOUT CLAIMING ANY DEPRECIATION AS ON 31/03/2004. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS WORKED OUT THE DIFFERENCE IN BOTH THESE VALUES AT RS.30,89,589/ - . HE SUBMITTED THAT SINCE THE VALUE AS PER VALUATION REPORT SUBMITTED BY THE ASSESSEE IS ALSO HIGHER THAN THE VALUE AS PER BOOKS, IT CANNOT BE SAID THAT THE REOPENING IS NOT VALID. 4. LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE SUBMITTED THAT SINCE THE ONLY BASIS OF REOPENING IS A VALUERS REPORT, THE REOPENING IS NOT VALID AS PER THE JUDGMENT OF HON'BLE APEX COUR T RENDERED IN THE CASE OF ACIT VS. DHARIYA CONSTRUCTION CO. [2010] 328 ITR 515 (SC). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE REPORT OF THE REGISTERED VALUER SHRI ANIL KUMAR DINESH IS AVAILABLE ON RECORD, AS PER WHICH HE HAS REPORT ED THE VALUE AT RS.1,15,01,478/ - AND AS PER THE ASSESSEES BOOKS, THE VALUE WAS SHOWN AT RS.84,11,889/ - AND HENCE, THE VALUE AS PER THE VALUER IS HIGHER BY RS.30,89,589/ - . THIS WAS THE CON CL USION OF THE ASSESSING OFFICER THAT THIS DIFFERENCE IS NOTHING BU T IT REPRESENTS UNEXPLAINED INVESTMENT IN CONSTRUCTION OF COLD STORAGE BUILDING WHICH IS CHARGEABLE TO TAX. REGARDING THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF DHARIYA CONSTRUCTION CO. (SUPRA), WE FIND THAT IN THIS CASE , 3 THE VALUATION REPORT WAS OF THE D.V.O. AND IT WAS HELD BY HON'BLE APEX COURT THAT THE OPINION OF THE D.V.O. PER SE IS NOT INFORMATION FOR THE PURPOSE OF REOPENING AN ASSESSMENT UNDER SECTION 147 OF THE INCOME - TAX ACT . HON'BLE APEX COURT HELD THAT THE ASS ESSING OFFICER HAS TO APPLY HIS MIND TO THE INFORMATION, IF ANY, COLLECTED AND MUST FORM A BELIEF THEREON. IN THE PRESENT CASE, THE REPORT OF THE VALUER IS NOT OF D.V.O. BUT OF A REGISTERED VALUER AND THIS REPORT HAS BEEN SUBMITTED BY THE ASSESSEE ITSELF. HENCE, IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT AWARE ABOUT THE DIFFERENCE IN THE VALUE AS PER VALUATION REPORT AND AS PER THE BOOKS. THE ASSESSING OFFICER HAS NOT ACTED SIMPLY ON THE BASIS OF VALUATION REPORT BUT HAS APPLIED HIS MIND AND HAS COMPARE D THE FIGURES OF INVESTMENT IN COLD STORAGE AS PER THE VALUATION REPORT OF THE REGISTERED VALUER AND BOOKS AND FOUND THAT THE VALUATION AS PER VALUATION IS HIGHER TO ABOUT 35% OF THE VALUE SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNT AND THEREAFTER THE AS SESSING OFFICER HAS FORMED A BELIEF THAT THERE IS ESCAPEMENT OF INCOME BECAUSE IN SPITE OF THE FACT THAT THE ASSESSEE ITSELF SUBMITTED THE REPORT OF THE REGISTERED VALUER SHOWING HIGH VALUE AS COMPARED TO VALUE AS PER BOOKS, NO EXPLANATION WAS FURNISHED BY THE ASSESSEE ALONG WITH THE VALUATION REPORT TO SHOW THAT THERE IS NO EXTRA INVESTMENT BY THE ASSESSEE AND EXTRA VALUE SHOWN BY THE VALUER IS FOR REASONS OTHER THAN EXTRA INVESTMENT BY THE ASSESSEE OUT OF UNDISCLOSED INCOME . IN THE FACTS OF THE PRESENT CASE, WE ARE OF THE OPINION THAT THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF DHARIYA CONSTRUCTION CO. (SUPRA) IS NOT RENDERING ANY HELP TO THE ASSESSEE BECAUSE THE FACTS ARE DIFFERENT. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT ACTED UPON ME RELY ON THE BASIS OF VALUATION REPORT BUT HAS APPLIED HIS MIND AND MOREOVER , THE VALUATION REPORT IS NOT A REPORT OF D.V.O. OBTAINED BY THE ASSESSING OFFICER BUT OBTAINED AND SUBMITTED BY THE ASSESSEE WITHOUT SUBMITTING ANY EXPLANATION IN RESPECT 4 OF EXTRA VALUE SHOWN BY THE REGISTERED VALUER . HENCE, IN THE PRESENT CASE, WE ARE OF THE CONSIDERED OPINION, THAT THE REOPENING IS VALID IN THE FACTS OF THE PRESENT CASE AND THEREFORE, ON THIS ISSUE , WE REVERSE THE ORDER OF CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER. 6. SINCE THE CIT(A) HAS NOT DECIDED THE ISSUE ON MERIT, WE FEEL IT PROPER THAT THIS ISSUE SHOULD GO TO CIT(A) FOR DECIDING THE ISSUE ON MERIT. ACCORDINGLY, WE RESTORE THIS MATTER BACK TO THE FILE OF CIT(A) FOR DECISION ON MERIT AFTER HOLDING T HAT THE REOPENING I S VALID. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED IN THE TERMS INDICATED ABOVE. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24 /02/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR