ITO, Bijapur V. Shri. Sadashiv kattimani, Bijapur

ITA 364/BANG/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2057 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 01-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZINIK VASHAI
• Assessee Lawyers: NITYA
• Keywords: Unexplained investment; Opportunity of being heard

Judgement Text

ITA.364/BANG/2006 PAGE - 1 IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A' BEFORE SHRI. GEORGE GEORGE K, JUDICIAL MEMBER AND SHRI. A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.A.NO.364/BANG/2006 (ASSESSMENT YEAR : 2001-02 ) INCOME TAX OFFICER, WARD-1, BANGALORE .. APPELLANT V. SHRI SADASHIV KATTIMANI, 1581, NEHRU ROAD, BIJAPUR .. RESPONDENT APPELLANT BY : SMT. JACINTA ZINIK VASHAI RESPONDENT BY : SMT. NITYA O R D E R PER GEORGE GEORGE K, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A), DT.9.1.06 FOR THE AS SESSMENT YEAR 2001-02. 2. THE SOLITARY ISSUE THAT IS RAISED IN THIS APPEAL IS WHETHER THE COMMISSIONER OF INCOME-TAX(A) JUSTIFIED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CO NSTRUCTION OF BUILDING. ITA.364/BANG/2006 PAGE - 2 3. BRIEFLY STATED, THE FACTS ARE AS FOLLOWS. ASSES SEE IS A DEALER IN CEMENT SHEETS DOING RETAIL BUSINESS. RETURN OF INC OME FOR THE CONCERNED ASSESSMENT YEAR WAS FILED ON 21.11.2001 D ECLARING INCOME OF RS.77,000/-. A SURVEY U/S.133A WAS CONDUCTED I N THE PREMISES OF ASSESSEE ON 6.1.2003. THE ASSESSEE HAD CONSTRUCTED A COMMERCIAL AND RESIDENTIAL BUILDING DURING OCTOBER, 1998 TO FEBRUA RY, 2002. THE COST OF CONSTRUCTION OF SAID BUILDING WAS STATED BY ASSESSEE AT RS.15,00,000/-. THE ASSESSING OFFICER WAS OF THE V IEW THE COST OF CONSTRUCTION SHOWN BY ASSESSEE WAS ON THE LOWER SID E AND ISSUED NOTICE U/S.148 ON 3.2.2003. THEREAFTER MATTER WAS REFERRED TO DVO FOR VALUATION WHO FIXED THE VALUE AT RS.25,38,000/- . THE ASSESSEE OBJECTED TO THE VALUATION OF THE DVO AND SUBMITTED A VALUATION FROM AN INDEPENDENT APPROVED VALUER. THE OBJECTIONS OF THE ASSESSEE WAS REJECTED AND THE DIFFERENCE BETWEEN THE VALUE FIXED BY THE DVO AND THE COST OF CONSTRUCTION DISCLOSED BY ASSESSEE (RS. 25,38,000 - RS.15,00,000 = RS.10,38,000/-) WAS ASSESSED BETWEEN ASSESSMENT YEARS 2001-02 AND 2002-03 AT RS.5,00,000/- AND RS.5 ,38,000/- RESPECTIVELY. 4. THE ASSESSING OFFICER ALSO DETERMINED THE FUND A VAILABLE WITH ASSESSEE FOR CONSTRUCTION OF THE BUILDING AT RS.11, 88,000/- AND SINCE RS.15,00,000/- WAS DISCLOSED BY THE ASSESSEE, THE D IFFERENCE OF ITA.364/BANG/2006 PAGE - 3 RS.3,12,000/- WAS ASSESSED AS UNEXPLAINED INVESTMEN T U/S.69 OF INCOME TAX ACT, 1961 AT THE RATE OF RS.1,56,000/- E ACH FOR THE ASSESSMENT YEAR 2001-02 AND 2002-03. 5. BEFORE THE COMMISSIONER OF INCOME-TAX(A) IT WAS SUBMITTED, THE ADDITION OF RS.5,00,000/- AND RS.1,56,000/- TOW ARDS UNEXPLAINED INVESTMENT IN BUILDING ON THE BASIS OF VALUATION FR OM DVO IS NOT JUSTIFIED, SINCE DVO HAS NOT GIVEN ANY OPPORTUNITY OF BEING HEARD BEFORE FINALIZATION OF VALUATION. THE ASSESSEE HAS ALSO CHALLENGED THE VALUATION BY THE DVO. THE COMMISSIONER OF INCOME-T AX(A) GRANTED VARIOUS REDUCTION/REBATE TO THE VALUE FIXED BY THE DVO AND ESTIMATED THE COST OF CONSTRUCTION AT RS.19,86,653/-. THEREF ORE, THE DIFFERENCE BETWEEN THE COST OF CONSTRUCTION ESTIMATED AT RS.1 9,86,653/- MINUS COST OF CONSTRUCTION SHOWN BY THE ASSESSEE AT RS.15 ,00,000/- CAME TO RS.4,86,658/-. THE COMMISSIONER OF INCOME-TAX(A) A LSO CONSIDERED THE FUNDS AVAILABLE WITH THE ASSESSEE FOR CONSTRUCT ION OF BUILDING AND CONCLUDED THAT THE ASSESSEE HAS ADEQUATE SOURCE. H ENCE, THE ADDITION OF RS.5,00,000/- AND RS.1,56,000/- WAS DELETED BY T HE LEARNED COMMISSIONER OF INCOME-TAX(A). 6. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US RAISING THE FOLLOWING EFFECTIVE GROUNDS : ITA.364/BANG/2006 PAGE - 4 I) THE ORDER OF COMMISSIONER OF INCOME-TAX(A) IN RE SPECT OF DELETION OF ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CONSTRUCTION OF BUILDING, IS OPPOSED TO LAW AND FACTS OF THE CASE. II) THE COMMISSIONER OF INCOME-TAX(A) OUGHT TO HAVE OBTAINED DVO'S COMMENTS, WHICH HE HAS FAILED TO DO. III) THE VALUE OF THE BUILDING WORKED OUT BY THE COMMISSIONER OF INCOME-TAX(A) IS NOT SUPPORTED BY A NY COMPARABLE CASES AND AS SUCH IS NOT ACCEPTABLE. IV) AS THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACC OUNT, THE COMMISSIONER OF INCOME-TAX(A) SHOULD NOT HAVE H ELD THAT THE SOURCES OF INVESTMENT AS EXPLAINED. 7. AT THE VERY OUTSET IT WAS POINTED BY THE LEARNED AR THE ISSUE IN QUESTION IS COVERED BY THE DECISION THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2002-03 (ITA.365/BANG/06, DT.13.6.2008. A COPY OF THE TRIBUNAL ORDER CITED SUPRA IS PLACED ON RECORD. THE LEARNED DR FAIRLY CONCEDED THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL (SUPRA). 8. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THE MATTER WHICH IS IN DISPUTE BEF ORE US HAS ALREADY BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEE'S OWN C ASE FOR ITA.364/BANG/2006 PAGE - 5 ASSESSMENT YEAR 2001-02, WHEREIN THE TRIBUNAL HAS C ATEGORICALLY FOUND THAT ASSESSEE HAD ADEQUATE FUND AVAILABLE FOR CONSTRUCTION OF THE IMPUGNED BUILDING AND DELETED THE ADDITION MADE U/S.69 OF THE ACT. THEREFORE, RESPECTFULLY FOLLOWING THE COORDIN ATE BENCH DECISION OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR ASSESSME NT YEAR 2001-02, WE HOLD THAT THE COMMISSIONER OF INCOME-TAX(A)'S OR DER IS CORRECT AND NO INTERFERENCE IS CALLED FOR. 8. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 23RD DECEMBER, 2009. SD/- SD/- (A. MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED : 23RD DECEMBER, 2009 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, NEW DELHI 7. GF, ITAT, BANGALORE