The Income-tax Officer, Srinagar V. Shri Manzoor Ahmed Burza, Srinagar

ITA 421/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0795 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-05-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 23-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Keywords: Opportunity of being heard; Valuation report
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.421(ASR)/2014 ASSESSMENT YEAR:2005-06 PAN: AIQPB3711K INCOME TAX OFFICER, VS. SH. MANZOOR AHMED BURZA, WARD 3(2), DEEWAN EXCHANGE COLONY, SRINAGAR. ISHBER NISHAT, SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. S.S. KANWAL, DR RESPONDENT BY: NONE DATE OF HEARING: 03/05/2016 DATE OF PRONOUNCEMENT: 04/05/2016 ORDER PER A.D. JAIN, JM: THIS IS THE DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2005-06, AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING TH E ADDITION OF RS. 35 LAKHS MADE BY THE AO ON ACCOUNT OF INVESTMENT MADE BY THE ASSESSEE IN THE CONSTRUCTION OF HOUSE PROPERTY AT ISHBER NISHAT, SR INAGAR. 2. THE RPAD NOTICE ISSUED TO THE ASSESSEE ON 08.04. 2016 FOR HEARING ON 02.05.2016, HAS NOT BEEN RECEIVED BACK UNSERVED. HOWEVER, NONE HAS PUT APPEARANCE ON BEHALF OF THE ASSESSEE. FINDING T HAT THE MATTER CAN BE PROCEEDED WITH IN THE ABSENCE OF THE ASSESSEE, WE ARE DOING SO. ITA NO.421(ASR)/2014 A.Y. 2005-06 2 3. THE REGISTRY HAS INFORMED THAT THERE IS DELAY OF 9 DAYS IN FILING THE APPEAL. THIS DELAY HAS NOT BEEN EXPLAINED BY THE DE PARTMENT, THOUGH THE APPEAL WAS FILED ON 23.06.2014 AND A YEAR AND A HAL F HAS SINCE EXPIRED. 4. EVEN ON MERITS, AS WILL BE PRESENTLY SEEN, THE D EPARTMENT DOES NOT HAVE ANY CASE. 5. THE AO MADE AN ADDITION OF RS.37 LAKHS ON ACCOUN T OF INVESTMENT IN HOUSE PROPERTY. THE LD. CIT(A) DECIDED THE MATTE R IN FAVOUR OF THE ASSESSEE. BEFORE THE TRIBUNAL, THE DEPARTMENT CONTE NDED THAT AN OPPORTUNITY BE GIVEN TO THE AO TO MAKE HIS POINT, W HICH OPPORTUNITY HAD NOT BEEN AFFORDED BY THE LD. CIT(A) TO THE AO. THE TRIBUNAL RESTORED THE MATTER TO THE LD. CIT(A) WITH A DIRECTION TO DECIDE THE CASE ON AFFORDING OPPORTUNITY OF BEING HEARD TO THE PARTIES. 6. IN THE SECOND ROUND BEFORE THE LD. CIT(A), THE A SSESSEE CONTENDED THAT THE ADDITION MADE BY THE AO WAS BASED ON MERE ESTIMATION WITHOUT TAKING THE OPINION OF ANY EXPERT, WITHOUT VISITING THE HOUSE PROPERTY AND WITHOUT MAKING ANY MARKET ENQUIRY, DUE TO WHICH, T HE ESTIMATE MADE BY THE AO WAS UNREALISTIC AND MISCONCEIVED; THAT T HE AO IS NOT A TECHNICAL PERSON HAVING ANY EXPERTISE FOR VALUATION OF THE PROPERTY AND AS SUCH, THE VALUATION MADE BY THE AO WAS NOT LEGAL LY CORRECT. IT WAS CONTENDED THAT THE CONSTRUCTION OF THE HOUSE PROPER TY WAS STARTED IN THE ASSESSMENT YEAR 2005-06 AND IT WAS COMPLETED IN THE ASSESSMENT YEAR 2007-08, THEREBY SPANNING A PERIOD OF THREE YEARS; THAT ON THE OTHER ITA NO.421(ASR)/2014 A.Y. 2005-06 3 HAND, THE AO MADE THE WHOLE ADDITION IN THE YEAR U NDER CONSIDERATION, I.E., ASSESSMENT YEAR 2005-06. 7. THE LD. CIT(A) FORWARDED THE SUBMISSIONS OF THE ASSESSEE AND THE SUPPORTING DOCUMENTS TO THE AO FOR HIS VERIFICATION AND COMMENTS THEREON. THE AO REPORTED THAT THE ASSESSEE HAD BEEN PROVIDED AN OPPORTUNITY TO FURNISH THE VALUATION REPORT OF THE APPROVED VALUER IN RESPECT OF THE HOUSE PROPERTY, BUT THE ASSESSEE HAV ING FAILED TO DO SO, THE ASSESSMENT WAS COMPLETED U/S 144 OF THE I.T.ACT, 19 61. 8. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) ALLOWED THE ASSESSEES APPEAL AND DELETED THE ADDITION MADE BY THE AO, OBSERVING AS FOLLOWS: FROM THE PERUSAL OF THE ASSESSMENT ORDER AND REMA ND REPORT, IT IS OBSERVED THAT THE ESTIMATE MADE BY THE AO IS WITHOU T ANY VALID BASIS OR MATERIAL ON RECORD. THE AO HAD SUFFICIENT TIME TO REFER THE MATTER TO THE VALUATION CELL AS ALSO OBSERVED BY TH E THEN CIT(APPEAL), BUT INSTEAD OF FOLLOWING THE PROPER PROCEDURE PRESC RIBED UNDER THE PROVISIONS OF INCOME TAX ACT AND RULES, THE AO DECI DED TO ADOPT VALUE OF THE PROPERTY ON HIS OWN WITHOUT ANY TECH NICAL EXPERTISE AND WITHOUT ANY EVIDENCE OR MATERIAL ON RECORD. SUC H AN ADDITION BASED ON WHIMS AND WISHES OF THE AO IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE/MATERIAL ON RECORD COULD NOT BE SUSTAINED IN LAW. EVEN IF THE APPELLANT HAD NOT PROVIDED THE INF ORMATION, IT WAS THE DUTY OF THE AO TO GATHER INFORMATION USING HIS POWERS UNDER THE ACT AND MADE ESTIMATES BASED ON MATERIAL/EVIDENCE C OLLECTED OR REFER THE MATTER TO THE VALUATION CELL. THE ESTIMA TED ADDITION MADE BY THE AO IS VERY VAGUE AND IS MERELY A GUESS WORK. THUS, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE AND IS A CCORDINGLY DELETED. 9. IT REMAINS UNDISPUTED THAT THE ESTIMATE MADE BY THE AO WAS WITHOUT ANY BASIS, MUCH LESS ON ANY MATERIAL ON REC ORD. THE MATTER WAS NOT REFERRED TO THE VALUATION CELL AND EVEN IN THE SECOND ROUND OF ITA NO.421(ASR)/2014 A.Y. 2005-06 4 LITIGATION, IN THE REMAND REPORT, THE AO OBSERVED T HAT IT WAS THE ASSESSEE WHO DID NOT FILE ANY VALUATION REPORT, DESPITE HAVI NG BEEN PROVIDED AN OPPORTUNITY TO DO SO. OBVIOUSLY, THE AO IS NOT A T ECHNICAL EXPERT AND HE UNDISPUTEDLY HAD SUFFICIENT TIME TO REFER THE MATTE R TO THE VALUATION CELL, WHICH WAS NOT DONE. IT WAS, THEREFORE, THAT THE ADO PTION OF THE VALUE OF THE PROPERTY BY THE AO WAS WITHOUT ANY BASIS OR MAT ERIAL ON RECORD. THE LD. CIT(A) HAS CORRECTLY DELETED THE ADDITION MADE BY THE AO MERELY ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS, WITHOUT ANY BASIS OR MATERIAL ON RECORD, WITHOUT GATHERING ANY INFORMATI ON/EVIDENCE/MATERIAL FOR THE ESTIMATE MADE. IT IS TRITE THAT EVERY ESTIM ATE HAS TO HAVE SOME RATIONAL BASIS, WHICH IS ABSENT HEREIN. 10. THE ORDER OF THE LD. CIT(A) IS ACCORDINGLY SUST AINED. 11. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/05/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 04/05/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: MANZUR AHMED BURZA, SRINAGAR. 2. THE ITO WARD 3(2), SRINAGAR. 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.