Smt. Subhas Bhalla, Aligarh V. A.C.I.T., Circle-1, Aligarh

ITA 40/AGR/2013

• Counselvise Citation: 4020314 RSA 2013
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-12-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 04-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: PANKAJ GARGH
• Keywords: Reopening of assessment; Period of limitation; Valuation report; Reason to believe; Reassessment proceedings
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO. 40/AGRA/2013 ASSTT. YEAR : 2006-07 SMT. SUBHASH BHALLA, VS. A.C.I.T., CIRCLE -1, C/O. M/S. RASOOL SINGHAL & CO., ALIGARH. CHARTERED ACCOUNTANTS, RAILWAY ROAD, ABOVE KWALITY RESTAURANT, ALIGARH (PAN:AARPB 7660 E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARGH, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 16.12.2013 DATE OF PRONOUNCEMENT OF ORDER : 20.12.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), MUZAFFARNAGAR DATED 17.10.2012 FOR THE ASSESSMENT Y EAR 2006-07. 2. THE ASSESSEE IN ALL THE GROUNDS OF APPEAL CHALLE NGED THE REOPENING OF ASSESSMENT U/S. 147 OF THE IT ACT. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS INDIVIDUAL. THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S. 143(3) O F THE IT ACT BY MAKING ADDITION ITA NO. 40/AGRA/2013 2 OF RS.8400/- WHICH WAS SUO MOTO OFFERED BY THE ASSE SSEE FOR THE RENT REALIZED OF RANJEET NAGAR PROPERTY, NEW DELHI. THE ASSESSMENT W AS MADE ON A FIGURE OF RS.9,36,660/- AGAINST RETURNED FIGURE OF RS.9,28,26 0/-. WHILE MAKING ASSESSMENT U/S. 143(3), ALL THE IMMOVABLE PROPERTIES EITHER BE LONGING TO ASSESSEE OR JOINTLY SHARED WITH HER HUSBAND WERE REFERRED FOR VALUATION U/S. 142A OF THE ACT. THE APPROVED VALUERS REPORTS WERE ALSO RECEIVED AND PR OVIDED TO THE ASSESSEE. HOWEVER, THE AO REALIZED HIS MISTAKE IN MAKING REFE RENCE TO THE VALUATION OFFICER U/S. 142A OF THE IT ACT INSTEAD OF SECTION 55A OF T HE ACT, HENCE, HE CANNOT ACT UPON THEM. SAME PROPERTIES WERE AGAIN REFERRED TO T HE GOVERNMENT APPROVED VALUER U/S. 55A OF THE ACT DURING THE PENDENCY OF A SSESSMENT ITSELF AND ON THE BASIS OF SUBSEQUENT VALUATION, THE AO INITIATED RE- ASSESSMENT PROCEEDINGS U/S. 147/148 OF THE IT ACT. THE ASSESSEE APPRISED THE AO OF THE FACT THAT AS THE PROPERTIES ARE SAME AND VALUATION AS PER SUBSEQUENT VALUATION REPORTS WAS LESSER, HENCE, THE ASSESSEE RAISED OBJECTION AGAINST THE RE -ASSESSMENT PROCEEDINGS BUT THE OBJECTIONS OF THE ASSESSEE WERE NOT CONSIDERED FAVO URABLY. THE ASSESSEE FILED RETURN U/S. 148 UNDER PROTEST. THE AO THOUGH DROPPE D THE PROCEEDINGS RELATING TO ALL OTHER PROPERTIES INCLUDING THAT OF JOINT PROPER TIES OF HER HUSBAND, BUT IGNORED THE SUBMISSIONS MADE IN RESPECT OF RANJEET NAGAR PR OPERTY. THE AO DETERMINED TOTAL INCOME OF ASSESSEE AT RS.16,26,462/- INCLUDIN G LONG TERM CAPITAL GAINS AT RS.7,73,563/- AND SHORT TERM CAPITAL GAIN AT RS.8,6 9,800/-. THE ASSESSEE CHALLENGED THE REASSESSMENT PROCEEDINGS BEFORE THE LD. CIT(A) AND SEVERAL DECISIONS WERE ITA NO. 40/AGRA/2013 3 RELIED UPON BUT THE LD. CIT(A) DID NOT ACCEPT THE C ONTENTION OF THE ASSESSEE AND NOTED THAT SINCE THE AO DID NOT TAKE COGNIZANCE OF THE VALUATION REPORTS U/S. 142A OF THE ACT, THEREFORE, THE MATTER WAS REFERRED AGAI N FOR VALUATION U/S. 55A OF THE ACT. THEREFORE, RE-ASSESSMENT PROCEEDINGS WERE HELD JUSTIFIED AND THE APPEAL OF THE ASSESSEE WAS DISMISSED. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 5. THE LD. COUNSEL FOR THE ASSESSEE FILED COPY OF R EASONS RECORDED BY THE AO FOR REOPENING OF ASSESSMENT U/S. 147/148 OF THE IT ACT. THE SAME IS ALSO REPRODUCED IN THE ASSESSMENT ORDER (DATED 09.08.2009). THE SAME I S REPRODUCED AS UNDER : ORDER SHEET OF SMT SUBHASH BHALLA D/O BABA SEWAK S INGH, 7/87, SORAI NAWAB, ALIGARH, A.Y. 2006-07 09.08.2009 ASSESSEE HAS FILED A RETURN OF INCOME OF RS.9,28,2 60/- ON 31.03.2007. ASSESSMENT U/S 143(3) OF THE IT ACT, 19 61 WAS COMPLETE ON 31.12.2008 AT RS.9,36,660/-. A LETTER WAS WRITTE N TO DVO AGRA ON 29.12.2008 FOR VALUATION U/S 55A OF THE IT ACT 1961 OF PROPERLY SHARE OF LAND SITUATED AT TALASPUR KALA, KHATA NO.1 28, KHET NO.219, RAM GHAT ROAD, ALIGARH. THE DVO VIDE HIS REPORT F.NO.01/INV/AVO/AGRA.2008-09/17/4666 DATED 05.03.20 09 HAS DETERMINED THE VALUE OF SAID LAND OF RS.9,94,800/- AGAINST THE VALUE OF RS.6,00,000/-(1/4 TH SHARE). (9,94,800-6,00,000=3,94,800/-. THE OTHER PROPERLY AT XVII/1978/A2, RANJEET NAGAR, NEW DELHI. A LETTER WAS WRITTEN TO AVO, NEW DELHI ON 29 .12.2008 FOR VALUATION U/S 55A OF THE IT ACT, 1961.THE DVO VIDE HIS REPORT ITA NO. 40/AGRA/2013 4 F.NO.AVO-II/ND/CG/ND-01/2008-09/23 DATED 13.02.2009 HAS DETERMINED THE VALUE OF SAID LAND AT RS.10,89,800/- AS AGAINST THE DECLARED VALUE OF RS.4,00,000/- AS ON 18.01.2006. T HUS THERE IS DIFFERENCE OF ADDITION OF LAND WAS RS.(10,89,800-4, 00,000)=6,89,800/- . I HAVE THEREFORE REASON TO BELIEVE THAT THE ASSES SEE HAS SHOWN LESS VALUE OF LAND AND THUS INCOME TO THE EXTENT OF RS.6 ,89,800/- +3,94,800/- HAS ESCAPED ASSESSMENT WITHIN THE MEANI NG OF SECTION 147 AND IS LIABLE TO BE TAXED ACCORDINGLY IN ASSESS MENT YEAR 2006-07. THE TOTAL DIFFERENCE IN BOTH THE LAND/PROPERTY WORK ED OUT AT RS.3,94,800+6,89,800=10,84,600/-. NOTICE UNDER SECT ION 148 IS BEING ISSUED. SD/- (DR. BALWAN CHAUHAN) ADDL. COMMISSIONER OF INCOME-TAX RANGE-1, ALIGARH. 5.1 HE HAS ALSO RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ACIT VS. DHARIYA CONSTRUCTION CO., 328 ITR 515, IN WHICH IT WAS HELD THAT THE OPINION GIVEN BY THE DISTRICT VALUATION OFFICE R IS NOT PER SE INFORMATION FOR THE PURPOSE OF REOPENING AN ASSESSMENT UNDER SECTIO N 147 OF THE INCOME-TAX ACT, 1961. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS AND TH E ABOVE DECISION, WE ARE OF THE VIEW, THE INITIATION OF RE-ASSESSMENT PROCEEDIN GS IS NOT JUSTIFIED IN THE MATTER. IT IS ADMITTED FACT THAT REFERENCE U/S. 142A WAS MADE FOR VALUATION OF THE SAME PROPERTY AT THE ASSESSMENT STAGE, BUT THE AO DID NO T TAKE ANY ACTION ON THE SAME. FRESH REFERENCE WAS MADE U/S. 55A DURING THE PENDEN CY OF ORIGINAL PROCEEDINGS ON 29.12.2008 AND THE AO PASSED THE ORIGINAL ASSESSMEN T ORDER ON 31.12.2008 AND VIRTUALLY EXTENDED PERIOD OF LIMITATION OF PASSING THE ORIGINAL ASSESSMENT ORDER. ITA NO. 40/AGRA/2013 5 SUCH AN ACTION OF THE AO CANNOT BE APPROVED UNDER L AW. FURTHER, IT IS ADMITTED FACT THAT REOPENING OF ASSESSMENT WAS MADE ONLY ON THE B ASIS OF THE INFORMATION GIVEN BY THE DVO, WHICH WAS NOT CONSIDERED AS INFORMATION FOR THE PURPOSE OF REOPENING OF ASSESSMENT BY HONBLE SUPREME COURT IN THE CASE OF ACIT V. DHARIYA CONSTRUCTION CO. THERE WAS NO OTHER MATERIA L WITH THE AO TO JUSTIFY THE INITIATION OF RE-ASSESSMENT PROCEEDING. CONSIDERING THE ABOVE DISCUSSION, WE DO NOT FIND ANY JUSTIFICATION FOR REOPENING OF ASSESSM ENT IN THIS CASE. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND Q UASH THE REASSESSMENT PROCEEDINGS. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY