Shri Balwant Singh, Haryana V. ACIT, Haryana

ITA 4104/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2888 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 22-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Valuation report
• Section: 133A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.4104/DEL/2016 ASSESSMENT YEAR : 2008-09 BALWANT SINGH, H.NO.2178, URBAN ESTATE, JIND, HARYANA. PAN : ATUPS0483Q VS. ACIT, SCO NO.222, HUD COMPLEX CITY CENTRE, SECTOR-15, BHIWANI, HARYANA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.R. SINGLA, CA DEPTT. BY : SHRI AMRIT LAL, SR.DR DATE OF HEARING : 05.06.2017 DATE OF PRONOUNCEMENT: 06.06.2017 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 17.03.2016 IN RELATION TO ASSESSMENT YEAR 2008-09. 2. THE FIRST ISSUE RAISED IN THIS APPEAL IS AGAI NST THE CONFIRMATION OF ADDITION OF RS.5,15,578/- MADE BY THE ASSESSING OFF ICER ON THE BASIS OF REPORT OF VALUATION OFFICER. THE FACTS APROPOS THI S ISSUE ARE THAT THE ITA NO.4104/DEL/2016 2 ASSESSEE FILED RETURN DECLARING INCOME OF RS.1,03,8 90/- AND ALSO CLAIMING AGRICULTURAL INCOME AT RS.8,18,430/-. THE CASE WAS SUBSEQUENTLY REOPENED BY MEANS OF NOTICE U/S 148 ON THE PREMISE THAT A SU RVEY U/S 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E ON 28.03.2012 AND CERTAIN IMPOUNDED DOCUMENTS REVEALED THAT THE ASSES SEE, ALONG WITH HIS WIFE SMT. NIRMALA DEVI, HAD PURCHASED LAND MEASURI NG 43 KANALS 2 MARLAS ON WHICH A HOTEL WAS CONSTRUCTED. THE ASSESSING OF FICER REFERRED THE MATTER OF DETERMINATION OF THE VALUE OF CONSTRUCTIO N OF THIS HOTEL/BANQUET TO THE DVO. AS PER THE DVOS REPORT DATED JULY, 2013, THE ASSESSEE SPENT A SUM OF RS.5,15,578/-ON CONSTRUCTION OF THIS HOTEL D URING THE YEAR UNDER CONSIDERATION, THAT IS FINANCIAL YEAR 2007-08. THE ASSESSING OFFICER MADE AN ADDITION OF RS.5,15,578/-, WHICH CAME TO BE SUST AINED IN THE FIRST APPEAL. THE ASSESSEE IS AGGRIEVED AGAINST THIS ADDITION. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER HAS MADE AN ADDITI ON OF RS.5,15,578/- ON THE BASIS OF THE REPORT OF DVO WHICH INDICATED THAT THE ASSESSEE HAS SPENT THIS MUCH AMOUNT ON CONSTRUCTION OF HOTEL/BANQUET D URING THE YEAR. IT CAN BE SEEN FROM THE VALUATION REPORT ITSELF THAT THE A SSESSEE DECLARED AN INVESTMENT OF RS.4,92,380/- IN THE PREVIOUS YEAR RE LEVANT TO THE ASSESSMENT ITA NO.4104/DEL/2016 3 YEAR UNDER CONSIDERATION. THE TOTAL INVESTMENT SPR EADING OVER FIVE YEARS DECLARED BY THE ASSESSEE, AS MENTIONED IN THE VALUA TION REPORT, STANDS AT RS.3,65,47,888/- AS AGAINST THE ESTIMATE MADE BY TH E DVO FOR A TOTAL SUM OF RS.3,97,48,433/-. THE ASSESSING OFFICER HAS NOT ED THIS FACT IN HIS ORDER FOR THE ASSESSMENT YEAR 2011-12, WHOSE COPY HAS BEE N PLACED ON RECORD. PARA 3 OF SUCH ORDER DISCUSSES ABOUT THE TOTAL INVE STMENT MADE BY THE ASSESSEE AND THE ESTIMATE MADE BY THE DVO AT RS.3.9 7 CRORE DIVIDED IN FIVE YEARS FROM FINANCIAL YEAR 2007-08 TO 2011-12. NO AD DITION HAS BEEN MADE ON THIS COUNT BY SPECIFICALLY MENTIONING IN THE ORD ER: NO ADDITION IS CALLED FOR ON THIS POINT. THUS IT IS APPARENT THAT THE AO HAS ACCEPTED THE GENUINENESS OF INVESTMENT MADE IN THE CONSTRUCTION. I FAIL TO SEE ANY REASON FOR SUSTAINING ANY ADDITION IN THE YEAR UNDE R CONSIDERATION AS THE DVOS REPORT IS DATED JULY, 2013 AND THE DVO HAS RE CORDED THAT THE ASSESSEE HAS DECLARED INVESTMENT OF RS.4.92 LAC AGA INST HIS ESTIMATE OF COST OF CONSTRUCTION AT RS.5.15 LAC FOR THE YEAR, WHICH IS LESS THAN 10%. THE HON'BLE J & K HIGH COURT IN HONEST GROUP OF HOTEL (P) LTD. VS. CIT (2002) 177 CTR J&K) 232, HAS HELD THAT DIFFERENCE UPTO 10% IN THE DVOS REP ORT AND THE AMOUNT SHOWN BY THE ASSESSEE IS LIABLE TO BE IGNORED. IN THE FACTS OF THE INSTANT CASE, IT IS SEEN THAT THE OVERALL DI FFERENCE BETWEEN THE ITA NO.4104/DEL/2016 4 INVESTMENT DECLARED BY THE ASSESSEE AT RS.3.65 CROR E AND AS ESTIMATED BY THE DVO AT RS.3.97 CRORE IS LESS THAN 10% OF THE DV OS ESTIMATE. AS SUCH, NO ADDITION IS CALLED FOR. I ORDER FOR THE DELETION OF ADDITION. 4. THE SECOND ISSUE RAISED IN THIS APPEAL IS AGAINS T THE CONFIRMATION OF ADDITION OF RS.4,40,865/-, BEING INVESTMENT MADE IN SOME AGRICULTURAL LAND. THE FACTS RELATING TO THIS GROUND ARE THAT THE ASSE SSEE PURCHASED AN AGRICULTURAL LAND FOR A SUM OF RS.8,84,000/-. THE SOURCE OF SUCH INVESTMENT WAS EXPLAINED AS RECEIPT OF AGRICULTURAL INCOME ALO NG WITH PAST SAVINGS. THE ASSESSEE CLAIMED THAT HE SOLD AGRICULTURAL PROD UCE TO THE TUNE OF RS.13,84,295/- AND, AFTER INCURRING 41% AS EXPENSES , NET AGRICULTURAL INCOME WAS SHOWN AT RS.8,18,430/-. IN SUPPORT OF T HE RECEIPT OF RS.13.84 LAC, THE ASSESSEE FURNISHED COPIES OF FORM J. THE ASSESSING OFFICER OBSERVED THAT THESE J FORMS WERE ISSUED FROM DIFFE RENT PLACES RANGING FROM NARNAD, HISAR, ANAJ MANDI, JIND TO NEW ANAJ MANDI, PILLUKHERA (JIND). BELYING THE TRUTHFULNESS OF THE FORMS NO. J, THE AS SESSING OFFICER ESTIMATED AGRICULTURAL PRODUCE TO BE NOT MORE THAN RS.5,75,000/-. AFTER ALLOWING DEDUCTION AT THE RATE OF 41% TOWARDS EXPE NDITURE AND FURTHER ALLOWING SOME RELIEF, TOTAL AGRICULTURAL INCOME WAS COMPUTED AT ITA NO.4104/DEL/2016 5 RS.3,29,250/-. GIVING CREDIT OF RS.1,03,885/- ALSO , BEING THE INCOME SHOWN BY THE ASSESSEE IN THE RETURN AS ALSO CONTRIBUTING TOWARDS THE INVESTMENT MADE BY THE ASSESSEE IN AGRICULTURAL LAND, THE ASSE SSING OFFICER MADE AN ADDITION OF RS.4,40,865/- [RS.8,84,000/- MINUS RS.4 ,43,135 (RS.3,39,250 PLUS RS.1,03,885)]. THE LD. CIT(A) CONFIRMED THE A DDITION. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, I FIND THAT THE ASSESSING OFFIC ER HAS SIMPLY REJECTED THE ASSESSEES CLAIM OF HAVING EARNED AGRICULTURAL INCO ME OF RS.8.18 LAC, WHICH WAS DULY BACKED BY EVIDENCE IN THE FORM OF FORMS NO . J. REJECTING THE VERACITY OF FORMS NO. J, THE ASSESSING OFFICER PROC EEDED TO ESTIMATE AGRICULTURAL INCOME IN A WHIMSICAL MANNER AT RS.3,2 9,250/-. NO EFFORT WHATSOEVER WAS MADE TO EXAMINE THE COMMISSION AGENT S, WHO ISSUED FORM NOS. J. UNDER SUCH CIRCUMSTANCES, THE VIEW POINT C ANVASSED BY THE ASSESSING OFFICER IN NOT ADMITTING THE AGRICULTURAL INCOME AT THE STATED LEVEL, DULY BACKED BY UNCONTROVERTED FORMS NO. J, C ANNOT BE COUNTENANCED. IF THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE VERACITY OF FORMS NO. J, IT WAS FOR HIM TO MAKE INVESTIGATION AND PROVE THAT SUCH FORMS WERE FICTITIOUS OR NOT GENUINELY OBTAINED BY THE ASSESSE E. IN THE ABSENCE OF ANY ITA NO.4104/DEL/2016 6 EXERCISE HAVING BEEN DONE, I CANNOT UPHOLD THE SUST ENANCE OF ADDITION MADE BY THE LD. CIT(A) ON SUCH UNFOUNDED BASIS. 6. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 6 TH JUNE, 2017. SD/- (R.S. SYAL) VICE PRESIDENT DATED: 06 TH JUNE, 2017. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI