Sri.P.B.Ahmed, Kasargode V. DCIT, Kannur

ITA 431/COCH/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4720 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 26-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 07-06-2013
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: N MURALEEDHARN NAIR
• Keywords: Unexplained investment; Source of fund; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO.431/COCH/2013 ASSESSMENT YEAR : 2005-06 SHRI P.B. AHAMED, PADINHARAMOOLA, ALAMPADY, KASARAGOD-671 123. [PAN: ADUPA 2552K] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, KANNUR. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI N. MURALEEDHARN NAIR, REVENUE BY SMT. LATHA V. KUMAR, JR. DR DATE OF HEARING 26/09/2013 DATE OF PRONOUNCEMENT 27/09/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 29-03-2013 PASSED BY THE LD. CIT(A), KOZHIKODE AND IT RELATES TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS RAISED TWO EFFECTIVE GROUNDS NA MELY: (I) ADDITION OF AGRICULTURAL INCOME RETURNED BY TH E ASSESSEE. (II) AD-HOC ADDITION OF RS. 25.00 LAKHS ON ACCOUNT OF UNEXPLAINED INVESTMENTS. 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS NOT PRESSING THE ADDITION RELATING TO AGRICULTURAL INCOME AND IN THIS REGARD, HE ALSO MADE NECESSARY ENDORSEMENT IN THE G ROUNDS OF APPEAL FILED BY THE ASSESSEE. ACCORDINGLY, THE SAID GROUND IS DISMISSED AS WITHDRAWN. 4. THE FACTS RELATING TO THE ADDITION PERTAINING TO UNEXPLAINED INVESTMENTS ARE STATED IN BRIEF. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER I.T.A. NO. 431/COCH/2013 2 NOTICED THAT THE ASSESSEE HAS CONSTRUCTED A COMMERC IAL COMPLEX NAMED EK NAYANAR MEMORIAL HOSPITAL BUILDING DURING THE PERIOD FROM 2 4-08-2002 TO 31-03-2006. WHEN THE ASSESSEE WAS ASKED FOR DETAILS OF BUILDING CONS TRUCTION, THE ASSESSEE FILED A VALUATION REPORT SHOWING THE COST OF CONSTRUCTION A T RS. 43.12 LAKHS. BY THAT TIME, ABOUT 12,148 SQ. FT. OF THE BUILDING HAD BEEN CONST RUCTED. IT WAS SUBMITTED THAT SUBSEQUENTLY ABOUT 7850 SQ. FT. WAS CONSTRUCTED DUR ING THE PERIOD FROM 24-10-2007 TO JANUARY, 2010. THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAS MADE CASH DEPOSITS IN THE SAVINGS ACCOUNT MAINTAINED WITH THE CORPORATION BANK. HOWEVER, THE ASSESSEE DID NOT FURNISH ANY EXPLANATION WITH REGAR D TO THE SOURCE OF FUNDS FOR MAKING THESE DEPOSITS. CONSIDERING ALL THESE FACTORS, THE ASSESSING OFFICER MADE A LUMP SUM ADDITION OF RS. 25.00 LAKHS ON ESTIMATED BASIS. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) ALSO CONFIRMED THIS ADDITION, SINCE THE ASSE SSEE HAS FAILED TO FURNISH ANY EXPLANATION TO CONTRADICT THE FINDINGS OF THE ASSES SING OFFICER. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ADDITION MADE BY THE ASSESSING OFFICER IS ON THE HIGHER SIDE. HE FURTHE R SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION OF RS. 25.00 LAKHS W ITHOUT REFERRING THE MATTER OF VALUATION TO THE DVO AND ACCORDINGLY, HE SUBMITTED THAT THERE IS NO BASIS FOR ARRIVING AT THE FIGURE OF RS. 25.00 LAKHS FOR MAKING THE IMPUGN ED ADDITION. 6. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE A SSESSEE HAS FAILED TO FURNISH ANY EXPLANATION WITH REGARD TO THE SOURCES AND HENCE, T HE ASSESSING OFFICER HAD NO OTHER OPTION BUT TO MAKE THE ADDITION ON ESTIMATED BASIS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS CONSTRUCTED A H OSPITAL BUILDING HAVING AN EXTENT OF ABOUT 20,000 SQ. FT. HOWEVER, THE VALUATION REPORT SUBMITTED BY THE ASSESSEE SHOWS THE COST OF CONSTRUCTION AT RS. 43.12 LAKHS WHICH I S HIGHLY DISPROPORTIONATE TO THE AREA OF CONSTRUCTION. WHEN THIS DISCREPANCY WAS POINTED OUT TO THE LD. AR, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE A SSESSEE HAS CONSTRUCTED THE I.T.A. NO. 431/COCH/2013 3 BUILDING OVER A PERIOD BY AVAILING LOAN FROM KFC AN D HE WOULD BE IN A POSITION TO GIVE THE DETAILS OF CONSTRUCTION. HOWEVER NO MATERIAL W AS FURNISHED SHOWING THE DETAILS OF COST OF CONSTRUCTION. WE ALSO NOTICE THAT THE ASSE SSING OFFICER HAS DETERMINED THE AMOUNT OF ADDITION OF RS. 25.00 LAKHS WITHOUT BRING ING ANY MATERIAL ON RECORD OR WITHOUT REFERRING THE MATTER OF VALUATION TO THE DV O. HENCE, WE ARE UNABLE TO EXPRESS ANY OPINION IN THE ABSENCE OF ANY TYPE OF MATERIAL FROM BOTH SIDES. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THIS ISSUE R EQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASID E THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF T HE AO WITH A DIRECTION TO EXAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER AFFORDIN G NECESSARY OPPORTUNITY TO THE ASSESSEE, AND MAY TAKE DECISION IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 27-09-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 27TH SEPTEMBER, 2013 GJ COPY TO: 1. SHRI P.B. AHAMED, PADINHARAMOOLA, ALAMPADY, KASA RAGOD-671 123. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, KANNUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), KOZHIKO DE. 4. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN I.T.A. NO. 431/COCH/2013 4