T Mina Kumari, Berhampur V. ITO, Berhampur

ITA 383/CTK/2013

• Counselvise Citation: 38322114 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 01-07-2013
• Court: TRIBUNAL
• Assessee Lawyers: D K SHETH
• Keywords: Unexplained investment
• Section: 32; 6; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK , . . , BEFORE SHRI SUNIL KUMAR YADAV , J M & SHRI B.P.JAIN , A M ./ ITA NO S . 382 &383 / CTK /20 1 3 ( / ASSESSMENT YEAR S : 200 5 - 0 6 & 2006 - 07 ) SMT. T.MINA KUMAR I , PROP. PARVATI TRADERS, MILITARY LANE, BERHAMPUR - 760001 VS. ITO, WARD - 2, BERHAMPUR ./ ./ PAN/GIR NO. : A AKPT 1650 M ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI D.K.SHETH /REVENUE BY : SHRI K.K.NATH / DATE OF HEARING : 2 1 ST MAY , 201 5 / DATE OF PRONOUNCEMENT 22 ND MA Y ,2015 / O R D E R PER SUNIL KUMAR YADAV (J.M) : TH ESE APPEAL S ARE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDER S OF CIT (A ) , ON COMMON GROUNDS WITH REGARD TO ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE HOUSE PROPERTY. 2. THE CONCISE FACTS BORNE OUT FROM THE RECORD THAT DURING THE COURSE OF RE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS MADE INVESTMENT IN THE HOUSE PROPERTY CONSTRUCTED AT BERHAMPUR. THE CONSTRUCTION WAS SPREAD OVER TWO YEARS I.E. 2004 - 05 & 2005 - 06. THE A SSESSEE HAS DISCLOSED THE INVESTMENT OF RS.5,75,000(RS.2,75,000/ - + RS.3,00,000/ - ) IN THE SAID PROPERTY OVER THESE TWO YEARS. THE AO REFERRED THE MATTER TO DVO, WHO ESTIMATED THE COST OF CONSTRUCTION AT RS.9,74,327/ - . ON BEING ASKED TO EXPLAIN THE DIFFER ENCE, THE ASSESSEE FILED REGISTERED VALUERS REPORT WHERE THE ITA NO S . 382&383 /1 3 2 COST OF CONSTRUCTION WAS ESTIMATED AT RS.5,25,000 / - , WHICH IS LESS THAN THE DISCLOSED INVESTMENT BY THE ASSESSEE. IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT THE VALUATION WAS MADE BY T HE DVO FOLLOWING THE RATES ADOPTED BY THE CPWD AND THE RATES OF CPWD IS APPLICABLE FOR CONSTRUCTION AT NEW DELHI, WHEREAS THE ASSESSEE HAS CONSTRUCTED THE HOUSE PROPERTY AT A REMOTE PLACE BERHAMPUR IN ODISHA. IT WAS FURTHER CONTENDED THAT EVEN THE CPWD ITS ELF DOES NOT USE THIS PLINTH AREA RATES TO ASSESS THE COST OF CONSTRUCTION FOR AWARDING A CONSTRUCTION CONTRACT TO THE CONTRACTOR OR WHILE MAKING PAYMENT TO THE CONTRACTOR FOR THE CONSTRUCTION . 3. IT WAS FURTHER CONTENDED THAT NO CREDIT WAS GIVEN BY THE AO WITH RESPECT TO SELF SUPERVISION MADE BY THE ASSESSEE. PARTLY CONVINCED WITH THE CONTENTION OF THE ASSESSEE, THE AO ALLOWED 10% TOWARDS PERSONAL SUPERVISION FROM THE ESTIMATE MADE BY THE DVO. HE ACCORDINGLY ESTIMATED THE ENTIRE VALUE OF CONSTRUCTION AT RS . 8,76,895/ - . THE INVESTMENT DURING THE ASSESSMENT YEAR 2005 - 06 AS ESTIMATED BY THE A O CAME TO RS. 4,59,326/ - AS AGAINST RS.2,75, 000/ - DISCLOSED BY THE ASSESSEE RESULTING INTO ADDITION OF RS. 1,84,326/ - . SIMILARLY, IN THE ASSESSMENT YEAR 2006 - 07 , THE AO HAS E STIMATED THE INVESTMENT IN CONSTRUCTION AT RS. 4 ,17, 569/ - AS AGAINST RS.3 LAKHS DISCLOSED BY THE ASSESSEE RESULTING INTO ADDITION OF RS.1,17,569/ - . 4. AGGRIEVED BY THE ACTION OF THE AO, THE ASSESSEE PREFERRED APPEAL S BEFORE THE CIT(A) AND REITERATED ITS CO NTENTIONS. THE CIT(A) AGAIN PARTLY ACCEPTED THE CONTENTION OF THE ASSESSEE AND HE HAS REDUCED THE ADDITION ITA NO S . 382&383 /1 3 3 FURTHER BY 10% OF THE COST ESTIMATED BY THE AO . ACCORDINGLY A RELIEF OF RS. 51,036/ - WAS GIVEN IN ASSESSMENT YEAR 2005 - 06 AND A RELIEF OF RS.46,396/ - WAS GIVEN IN ASSESSMENT YEAR 2006 - 07. 5. THE ASSESSEE BEING FURTHER AGGRIEVED BY THE ORDER OF CIT(A) , PREFERRED APPEAL S BEFORE THE TRIBUNAL WITH THE SUBMISSIONS THAT THE DVO HAS ADOPTED THE RATE OF CPWD WHICH IS NOT AT ALL APPLICABLE IN BERHAMPUR, A REMOT E PLACE IN ODISHA. THE CONSTRUCTION WAS MADE UNDER THE SELF SUPERVISION OF THE ASSESSEE AND THE MATERIAL FOR CONSTRUCTION WAS PURCHASED AT A CHEAPER RATE WITHOUT ANY INVOLVEMENT OF THE MIDDLEMAN. IT WAS FURTHER CONTENDED THAT THE REGISTERED VALUER HAS TAKE N THE QUALITY OF CONSTRUCTION AND MATERIAL INVOLVED AND THE CONSTRUCTED PORTION WHILE ESTIMATING THE COST OF INVESTMENT IN THE PROPERTY, WHEREAS THE DVO HAS ESTIMATED THE COST OF INVESTMENT FOLLOWING THE CPWD RATE WITHOUT IDENTIFYING THE NATURE OF CONSTRUC TION. IN THE LIGHT OF THESE FACTS THE VALUATION ADOPTED BY THE VALUER SHOULD BE ADOPTED AGAINST THE DVOS REPORT, THEREFORE, NO ADDITION IS CALLED FOR. AFTER ALLOWING THE RELIEF GRANTED BY THE CIT(A), THE DIFFERENCE BETWEEN THE COST ESTIMATED BY THE AO AN D DECLARED BY THE REGISTERED VALUER BECOMES NEGLIGIBLE, THEREFORE, THE SAME SHOULD BE IGNORED AND ACCORDINGLY, THE ADDITION IS NOT CALLED FOR. 6. LD. DR PLACED RELIANCE UPON THE ORDER OF CIT(A). 7. HAVING CAREFULLY EXAMINED THE ORDER S OF THE AUTHORITIES B ELOW, IN THE LIGHT OF THE VALUER AND DVOS REPORT AND ALSO THE FACT THAT THE PROPERTY WAS CONSTRUCTED AT A REMOTE PLACE IN ODISHA I.E. BERHAMPUR, WHERE THE ITA NO S . 382&383 /1 3 4 RATE OF CPWD , AS ADOPTED BY THE DVO, CANNOT BE APPLIED. THE CONTENTION OF ASSESSEE THAT THE BUILDING WAS CONSTRUCTED UNDER THE SELF SUPERVISION OF THE ASSESSEE AND THEY HAVE PROCURED THE CHEAPEST MATERIAL, CANNOT BE OUTRIGHTLY IGNORED. WE HAVE ALSO TAKE N INTO ACCOUNT THE DIFFERENCE LEFT OUT AFTER GRANTING THE RELIEF BY THE CIT(A). KEEPING IN VIEW THE TOT ALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT SINCE THE DIFFERENCE WAS NOT SO MUCH , NO FURTHER ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY IS CALLED FOR. WE ACCORDINGLY, SET ASIDE THE ORDER OF CIT(A) AN D DELETE THE ADDITION SO MADE ON ACCOUNT OF INVESTMENT IN THE PROPERTY IN BOTH THE ASSESSMENT YEARS . 8 . IN THE RESULT, BOTH APPEAL S OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22/05 / 201 5 . SD/ - SD/ - ( . . ) ( B. P. JAIN ) ( ) ( SUNIL KUMAR YADAV) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 22/05 /2015 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT , CUTTACK 6. / GUARD FILE. //TRUE COPY//