Dy. Commissioner of Income Tax, Bareilly V. Purshottam Das Khandelwal, Bareilly

ITA 432/LKW/2013

• Counselvise Citation: 43223714 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-08-2014
• Assessment Year: misc
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISHRA
• Assessee Lawyers: H P SINGH
• Keywords: Document seized; Block assessment; Documents seized

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.432/LKW/2013 ASSESSMENT YEAR:1998 - 99 TO 2003 - 04 AND UP TO 09/05/2003 IN A.Y.2004 - 05 DY.C.I.T., CENTRAL CIRCLE, BAREILLY. VS. SHRI PURSHOTTAM DAS KHANDELWAL, PROP. M/S SURAJ BHAN PURSHOTTAM DAS, PACCA KATRA, AONLA, BAREILLY. PAN:AJFPK9054J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI VIVEK MISHRA, CIT, D. R. RESPONDENT BY SHRI H. P. SINGH , ADVOCATE DATE OF HEARING 04 /0 8 /2014 DATE OF PRONOUNCEMENT 1 7 /09/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A), BAREILLY, DATED 05 / 06 /201 3 FOR THE BLOCK PERIOD FROM 01.04.1997 TO 09.05.2003 . 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT LD. CIT(A), BAREILLY HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.13,08,7 6 5/ - MADE ON ACCOUNT OF INVESTMENT MADE IN CONSTRUCTION OF THE HOUSE PROPERTY WITHOUT APPRECIATING THE FACT THAT THE AO HAS MADE THE ADDITION ON T HE BASIS OF SEIZED MATERIALS, AS DIRECTED BY HON'BLE LTAT. 2. THAT THE ORDER OF THE LD. CIT(A), BAREILLY BEING ERRONEOUS I N LAW AND ON FACTS AND DESERVE S TO VACATED AND THE ORDER OF THE AO BE RESTORED. 2 3. IT WAS SUBMITTED BY LEARNED D.R. OF THE REVENUE THAT THE SPECIFIC OBJECTIONS RAISED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WERE NOT CONSIDERED BY THE CIT(A). IN PARTICULAR , OUR ATTENTION WAS DRAWN TO PAGE NO. 7 OF THE ASSESSMENT ORDER. 4. AS AGAINST THIS, LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT COPY OF THE TRIBUNAL DECISION IN ASSESSEES OWN CASE IN FIRST ROUND IS AVAILABLE ON PAGE NO. 27 TO 29 OF THE PAPER BOOK IN I.T.A. NO.520/LUC/07 AND C.O. NO.45/LUC/07 DATED 08/04/2008. HE POINTED OUT THAT IT IS HELD BY THE TRIBUNAL IN PARA 7 OF TH IS ORDER THAT IF THERE IS NO MATERIAL FOUND AS A RESULT OF SEARCH I.E. SEIZED DOCUMENT WHICH REFLECT S THAT ASSESSEE HAD MADE INVESTMENT OVER AND ABOVE THAN WHAT IS DECLARED BY HIM IN THE REGULAR BOOKS OF ACCOUNT THEN THE D.V.O.S REPORT CANNOT BE SAID TO BE LINKED WITH MATERIAL FOUND AS A RESULT OF SEARCH AND THEREFORE, IT WILL FALL BEYOND THE CONSIDERATION IN BLOCK ASSESSMENT BUT CAN BE UTILIZED FOR THE PURP OSE OF REGULAR ASSESSMENT ONLY. HE SUBMITTED THAT IN THE SECOND ROUND ALSO, THERE IS NO FINDING GIVEN BY THE ASSESSING OFFICER THAT ANY MATERIAL WAS FOUND IN THE COURSE OF SEARCH SUGGESTING EXTRA INVESTMENT BY THE ASSESSEE AND THEREFORE, THE ADDITION IS N OT JUSTIFIED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE WAS DECIDED BY CIT(A) AS PER THE FOLLOWING PARA ON PAGE NO. 17 OF HIS ORDER: I HAVE CAREFULLY CONSIDERED THE ISSUE. THE HON'BLE ITAT WHILE DECIDING THE ISSUE IN ITA NO. 520 / LUC/07 BLOCK PERIOD ENDING ON 9.5.2003, AND CO NO. 45 / LUC/07 FOR THE BLOCK PERIOD ENDING ON 9.5.2003 HAS DISCUSSED THE ISSUE IN DETAIL IN PARA 7 OF THE ORDER AND VIDE PARA 8 OF THE ORDER HAS RESTORED THE MATTER TO THE FILE OF THE AO FOR EXAMINING THE SEIZ ED DOCUMENTS RELATING TO COST OF CONSTRUCTION. THE HON'BLE TRIBUNAL SET ASIDE THE ASSESSMENT ORDER DATED. 30.05.2005 FOR MAKING IT DE NOVO WITH THE OBSERVATION THAT THE DIFFERENCE BETWEEN THE ESTIMATED COST OF CONSTRUCTION (BY THE DVO) AND THE COST OF CONS TRUCTION SHOWN 3 BY THE APPELLANT CANNOT BE ADDED IN THE BLOCK ASSESSMENT UNLESS THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH INDICATE COST OF CONSTRUCTION WHICH EXCEEDS WHAT HAS BEEN SHOWN BY THE APPELLANT. FURTHER FROM THE DETAILS AND SUBMISSIONS FURNI SHED BY THE AR FOR THE APPELLANT IT IS CLEAR THAT THE EXPENDITURE ON CONSTRUCTION AS PER SEIZED DOCUMENTS WORKS OUT TO RS.19,07,557 / - WHICH IS LESS THAN RS.22,78,787 / - SHOWN BY THE ASSESSEE. DIFFERENCE BETWEEN THE COST OF CONSTRUCTION ESTIMATED BY THE D.V. O. AND THAT SHOWN BY THE ASSESSEE COULD NOT BE TREATED AS UNDISCLOSED INCOME. HENCE THE ADDITION AS MADE BY THE AO IS DELETED. 5.1 FROM THE ABOVE PARA FROM THE ORDER OF CIT(A), WE FIND THAT A CLEAR FINDING IS GIVEN BY CIT(A) THAT AS PER THE SEIZED MATERI AL, THE EXPENDITURE ON CONSTRUCTION WORKS OUT TO RS.19,07,557/ - WHICH IS LESS THAN RS.22,78,787/ - SHOWN BY THE ASSESSEE. THIS FINDING OF CIT(A) COULD NOT BE CONTROVERTED BY LEARNED D.R. OF THE REVENUE. HENCE, IN OUR CONSIDERED OPINION, AS PER THE TRIBUNA L ORDER IN ASSESSEES OWN CASE IN FIRST ROUND, NO ADDITION CAN BE MADE IN BLOCK ASSESSMENT IN ABSENCE OF ANY MATERIAL HAVING BEEN FOUND SUGGESTING EXTRA INVESTMENT BY THE ASSESSEE OVER AND ABOVE WHAT IS DECLARED BY THE ASSESSEE IN THE REGULAR BOOKS OF ACCO UNT. 6. 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: 1 7 /09/2014. *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