Dy. Commissioner of Income Tax, Kanpur V. M/s. Gopi Apartments, Kanpur

ITA 409/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75165 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 20-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: P K KAPOOR
• Keywords: Valuation report

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.409/LKW/2012 A.Y.:2008 - 09 DY.C.I.T., CENTRAL CIRCLE - 2, KANPUR. VS. M/S GOPI APARTMENTS, 2664/2,BEADONPURA, KAROL BAGH, NEW DELHI. PAN:AAGEG3611D (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. P. SRIVASTAVA, D.R. RESPONDENT BY SHRI P. K. KAPOOR, C.A. DATE OF HEARING 18/12/2013 DATE OF PRONOUNCEMENT 3 0 / 01/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - I, KANPUR DATED 01/03/2012 FOR ASSESSMENT YEAR 2008 - 2009. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THAT LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE ASSESSEE'S APPEAL BY HOLDING THE REFERENCE TO THE DVO INVALID AS NO PROCEEDINGS WERE PENDING, WITHOUT APPRECIATING THE FACT THAT VALID AND LAWFUL REFERENCE FOR VALUATION WAS MADE U/S 142A OF THE IT ACT 1961 ON 04/11/2010, AFTER INITIA TING THE ASSESSMENT PROCEEDINGS VIDE ISSUE OF NOTICE UNDER SECTION 143(2) OF THE IT ACT 1961. 2. THAT LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE ASSESSEE'S APPEAL, WITHOUT APPRECIATING THE FACT THAT THE DVO HAD SUBMITTED VALUATION REPORT IN RESPECT OF THE 2 INVESTMENT IN PROPERTY FOR THE PERIOD OF FINANCIAL YEAR 2006 - 07, 2007 - 08 & 2008 - 09 , WHICH WAS PART OF RECORD OF THIS OFFICE. 3. THAT LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN WRONGLY APPLYING THE RATIO OF CASE OF SARGUM CINEMA VS. CIT REPORTED IN [20111 241 - CTR - 179 (SC), WITHOUT APPRECIATING THE FACT THAT THE FACTS OF THIS CASE ARE DISTINGUISHABLE. THE ASSESSEE, IN THIS CASE, WAS INFORMED VIDE SHOW CAUSE NOTICE DATED 27/12/2010 THAT THE INVESTMENT IN BUILDING CONSTRUCTION AS SHOWN IN THE BALANCE SHEET AS ON 31/03/2008 WAS FAR LESS THAN IT SHOULD BE AS PER THE DVO'S REPORT. THUS THE A SSESSEE'S BOOKS OF ACCOUNTS WERE HELD TO BE NOT RELIABLE AS FAR AS THE INVESTMENT IN THE BUILDING WAS CONCERNED. 4. THAT LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT IF REFERENCE IS INVALID, THE ADDITION CANNOT SURVIVE AND THUS IGNORING THE W ELL LAID PRINCIPLE ENVISAGED BY THE COURT THAT EVIDENCE EVEN IF OBTAINED THROUGH INVALID METHOD CAN STILL BE VALID EVIDENCE FOR ASSESSMENT PROCEEDINGS. THE DVO'S REPORT IS AN EVIDENCE THAT THE ASSESSEE HAD NOT FULLY DISCLOSED THE AMOUNT OF INVESTMENT IN IT S BOOKS OF ACCOUNT AND ACCORDINGLY PROVISIONS OF SECTION 69B OF THE IT ACT 1961 WERE ATTRACTED. 5. THAT THE ORDER OF THE LD. CIT (A) DESERVES TO BE VACATED AND THE ASSESSMENT ORDER PASSED BY THE A.O. BE RESTORE D . 6. THAT THE APPELLANT CRAVES LEAVE TO AME ND ANY ONE OR MORE OF THE GROUNDS OF THE APPEAL AS STATED ABOVE AS AND WHEN NEED FOR DOING SO MAY ARISE. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT ( A). HE ALSO SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF SARGAM CINEMA VS. CIT 241 CTR 149. 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW THIS ISSUE WAS DECIDED BY LEARNED CIT(A) AS PER PARA 4.6 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 4.6 IT IS AN ADMITTED FACT THAT IN THE APPELLANT'S CASE, THE BOOKS WERE NEVER REJECTED BEFORE AND REFERENCE WAS MADE TO THE DVO. IN VIEW OF THE BINDING DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SARGAM CINEMA (SUPRA), I HOLD THAT TH E AO COULD NOT HAVE REFERRED THE MATTER TO DVO WITHOUT THE BOOKS OF ACCOUNTS BEING REJECTED. UNDER THESE CIRCUMSTANCES, RELIANCE PLACED BY THE ASSESSING OFFICER ON THE REPORT OF THE DVO WAS MISCONCEIVED. SINCE THE ADDITION OF RS.2,51,03,27 8 / - HAS BEEN MAD E SOLELY ON THE BASIS OF THE REPORT OF THE DVO, THE SAID ADDITION CANNOT SURVIVE AS TH E REFERENCE TO THE DVO ITSELF HAS BEEN HELD TO BE INVALID. REFERENCE IS MADE TO TH E DECISION OF HON'BLE ITAT IN THE APPELLANT'S OWN CASE FOR THE A.Y. 2007 - 08 (SUPRA). 4 .1 AS PER ABOVE PARA OF THE ORDER OF LEARNED CIT(A), WE FIND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) BY FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF SARGAM CINEMA (SUPRA). IT HAS BEEN STATED BY THE REVENUE IN GROUND NO. 3 THAT CIT(A) HAS WRONGLY APPLIED THE RATI O OF THE CASE OF SARGAM CINEMA (SUPRA) WITHOUT APPRECIATING THE FACT THAT THE FACTS OF THIS CASE ARE DISTINGUISHABLE BUT IT COULD NOT BE SHOWN BY LEARNED D.R. THAT HOW THE FACTS OF THAT CASE ARE DISTINGUISHABLE WITH THE FACTS OF THE PRESENT CASE. A CLEAR FINDING IS GIVEN BY LEARNED CIT(A) IN THE PARA REPRODUCED ABOVE THAT IN THE ASSESSEES CASE, THE BOOKS WERE NEVER REJECTED BEFORE REFERENCE WAS MADE TO D.V.O. THIS FINDING OF FACT GIVEN BY LEARNED CIT(A) COULD NOT BE CONTROVERTED BY LEARNED D.R. OF THE RE VENUE. IT WAS HELD BY HON'BLE APEX COURT IN THIS CASE THAT ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO D.V.O. WITHOUT REJECTING THE BOOKS OF ACCOUNT AND, THEREFORE, RELIANCE PLACED ON THE REPORT OF D.V.O. WAS MISCONCEIVED. IN THE PRESENT CA SE ALSO, IT 4 IS ADMITTED POSITION THAT THE BOOKS WERE NOT REJECTED BY THE ASSESSING OFFICER AND WITHOUT REJECTING THE BOOKS, THE MATTER WAS REFERRED TO D.V.O. AND, THEREFORE, IN OUR CONSIDERED OPINION, THIS JUDGMENT OF HON'BLE APEX COURT IS SQUARELY APPLICA BLE IN THE FACTS OF THE PRESENT CASE. THEREFORE, WE DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT(A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (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: 3 0 T H JANUARY, 2014. *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