ITO, Kurukshetra V. M/s Kansal Cold Storage & Ice Factory, Ishmailabad

ITA 366/CHANDI/2001

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2437 (ITAT-CHANDIGARH)
• Duration Of Justice: 12 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-03-2013
• Assessment Year: 1996-1997
• Appeal Filed On: 15-05-2001
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: PERMIL KUMA R GOEL
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 366/CHD/2001 ASSESSMENT YEAR : 1996-97 THE INCOME TAX OFFICER, V M/S KANSAL COLD STORAGE WARD-2, KURUKSHETRA. & ICE FACTORY, ISMAILABAD. PAN: ------ (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI N.K. SAINI ASSESSEE BY : SHRI PERMIL KUMAR GOEL DATE OF HEARING : 25.06.2013 DATE OF PRONOUNCEMENT : 27.6.2013 ORDER PER T.R.SOOD, AM THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER O F CIT(APPEALS) SHIMLA DATED 09.02.2001 PASSED U/S 250(6) OF THE IN COME-TAX ACT,1961 (IN SHORT THE ACT ). 2. IN THIS APPEAL FOLLOWING GROUNDS HAVE BEEN RAIS ED BY THE REVENUE : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. AR HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.4,74,899/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE BUILDING. 2. IT IS PRAYED THAT THE ORDER OF THE CIT(APPEALS) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY G ROUND OF APPEAL AT THE TIME OF HEARING. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT ORI GINALLY THE APPEAL OF THE REVENUE WAS DISMISSED BY THE TRIBUNAL AND TH E MATTER WAS TAKEN BY THE REVENUE TO THE HON'BLE PUNJAB & HARYANA HIGH COURT. THE 2 HON'BLE HIGH COURT OBSERVED THAT APPEAL WAS DISMISS ED ON THE BASIS OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F SMT.AMIYA BALA PAUL VS CIT 262 ITR 407 (S.C). IT WAS FURTHER OBSE RVED THAT LATER ON, SECTION 142A WAS AMENDED AND THE AMENDMENT HAS NOT BEEN NOTICED BY THE TRIBUNAL. THEREFORE, THE MATTER WAS REMITTED B ACK TO THE TRIBUNAL WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCO RDANCE WITH THE LAW. 4. IT WAS FIRST YEAR OF THE BUSINESS OF THE ASSESSE E AND A FACTORY BUILDING HAS BEEN CONSTRUCTED DURING THE YEAR ON WH ICH ASSESSEE HAD SHOWN THE COST OF CONSTRUCTION OF RS.25,03,832/-. THE ASSESSING OFFICER REFERRED THE MATTER TO THE VALUATION CELL F OR DETERMINATION OF COST OF CONSTRUCTION. THE DVO VALUED THE COST OF C ONSTRUCTION AT RS.38,68,000/- WHICH WAS LATER ON REVISED TO RS.30, 05,100/-. THE ASSESSEE RAISED CERTAIN OBJECTIONS AND THE SAME WER E REJECTED AND ULTIMATELY AN ADDITION OF RS.4,77,899/- WAS MADE BY ASSESSING OFFICER. 5. ON APPEAL THE ADDITION WAS DELETED BY LD. CIT(AP PEALS) BY OBSERVING THAT NO ADDITION IS CALLED FOR ON TECHNIC AL GROUNDS AND FURTHER, IF DIFFERENCE IN PWD AND CPWD RATES IS TAK EN, THE DIFFERENCE IN COST OF CONSTRUCTION OFFERED BY THE ASSESSEE AND VA LUATION MADE BY THE VALUATION CELL WOULD REMAIN LESS THAN 10%. 6. BEFORE US, LD. DR SUBMITTED THAT TRIBUNAL IS DUT Y BOUND TO DECIDE THE MATTER ON MERITS AS PER THE DIRECTIONS OF THE H ON'BLE HIGH COURT AND CAN NOT RELY MERELY ON THE DECISION OF HON'BLE SUPREME COURT IN CASE OF SARGAM CINEMA VS CIT 328 ITR 513 (S.C). HE FURTHER SUBMITTED THAT CIT(APPEALS) HAS NOT CORRECTLY ADJUD ICATED THE ISSUE BECAUSE NO EVIDENCE WAS FILED BEFORE HIM TO SHOW TH AT THERE WAS ANY DIFFERENCE BETWEEN PWD RATES AND CPWD RATES. IN TH IS CASE DVO HAS FOLLOWED THE CPWD RATES WHICH WERE BASED ON THE AMB ALA CITY. 3 7. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT CAREFUL PERUSAL OF THE ASSESSMENT ORDER WOULD SHOW THAT ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNT AND W ITHOUT SUCH REJECTION THE MATTER COULD NOT HAVE BEEN REFERRED T O THE DVO IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN CASE OF SA RGAM CINEMA V CIT (SUPRA). HE FURTHER STRONGLY RELIED ON THE OBSERVA TION MADE BY THE CIT(APPEALS). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND FIND THA T PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT ASSESSING OFFIC ER HAS NOT REJECTED THE BOOKS OF ACCOUNT. HON'BLE SUPREME COURT IN THE CASE OF SARGAM CINEMA V CIT (SUPRA) HAS HELD AS UNDER : HELD, THAT THE ASSESSING AUTHORITY COULD NOT REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER IN A CASE WHE RE THERE WAS A CATEGORICAL FINDING RECORDED BY THE TRIBUNAL THAT THE BOOKS OF ACCOUNT WERE NEVER REJECTED. DECISION OF THE UTTRANCHAL HIGH COURT REVERSED. 9. IN THE ABSENCE OF REJECTION OF BOOKS OF ACCOUNT THE MATTER MAY NOT HAVE BEEN REFERRED TO DVO. THEREFORE, REFEREN CE TO VALUATION ITSELF IS WRONG AND ADDITION IS NOT JUSTIFIED. IN ANY CASE, LD. CIT(APPEALS) HAS DECIDED THE ISSUE VIDE PARA 2.1 WH ICH IS AS UNDER : 2.1 THE SUBMISSIONS FILED HAVE BEEN CAREFULLY CONS IDERED. LOOKING FROM ALL THE ANGLES DISCUSSED ABOVE, NO ADD ITION ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION WAS C ALLED FOR, BOTH ON TECHNICAL GROUNDS AS WELL AS ON MERITS, SPECIALL Y ON MERITS, IF THE COST OF RACKS WHICH IS ACTUALLY PART OF PLANT & MACHINERY FOR COLD STORAGE IS EXCLUDED, THERE WILL BE NO DIFFEREN CE AS THE VALUE OF WOOD USED FROM OWN SOURCES COULD BE EXTENDED IF NO VALUE OF RACKS AS INCREASED BY THE VC. FURTHERMORE THE TOTAL DIFFERENCE IN THE COST DECLARED AND ESTIMATION IS ABOUT 16% (COST DETERMINED RS.29,75,800/- DIFFERENCE RS.4,74,000/-). IF DIFFE RENCE IN PWD AND CPWD RATES IS TAKEN AT 10% THE DIFFERENCE WOULD BE LESS THAN 10% WHICH IS IGNORABLE. THEREFORE THE ADDITIO N IS HELD UNWARRANTED AND IS DELETED. 10. WE ARE OF THE OPINION THAT VALUATION IS A MATTE R OF ESTIMATE AND NO TWO VALUERS WOULD EVER REACH THE SAME ESTIMATE. FURTHER, IF THE DIFFERENCE IS ONLY 16%, EVEN IF CPWD RATES ARE CONS IDERED, THE SAME 4 IS NOT A BIG DIFFERENCE AND IF PWD RATES ARE CONSID ERED, DIFFERENCE REMAIN LESS THAN 10% AS OBSERVED BY THE LD. CIT(APP EALS). VARIOUS BENCHES OF THE TRIBUNAL ARE CONSISTENTLY HOLDING TH AT DIFFERENCE OF LESS 10% HAS TO BE IGNORED. IN THESE CIRCUMSTANCES, WE FIND NOTHING WRONG WITH THE ORDER OF CIT(APPEALS) AND CONFIRM THE SAME . 11. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JUNE, 2013. SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH JUNE, 2013. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR ITAT,CHD.