Mahadeo Nagar, JODHPUR V. ITO, JODHPUR

ITA 45/JODH/2008

• Counselvise Citation: 4523314 RSA 2008
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-07-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 09-01-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NA JODHI
• Assessee Lawyers: ADITYA GA NG ARS; SSH SUREGH GANG
• Keywords: Charitable institution; Valuation report
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (JODH[PUR BENCH: JODHPUR) BEFORE SHRI RAJPAL YADAV AND SHRI K.D. RANJAN ITA NO. 45/JDP/2008 ASSESSMENT YEAR: 2004-05 MAHADEO NAGAR, VS. INCOME-TAX OFFICER, 8-SURYA COLONY, WARD 3(4), JODHPUR. JODHPUR. (PAN: AAAAM5483G) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH. SUREGH GANG & ADITYA GA NG, ARS RESPONDENT BY: SHRI NA JODHI , DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 23 RD OCTOBER,2007 PASSED FOR ASSESSMENT YEAR 2004-05. THE ASSESSEE HAS TAKEN SEVEN GROUNDS WHICH ARE NOT IN CONSONANCE WITH RULE 8 OF THE ITAT'S RULES, THEY ARE DESCRIPTIVE AN D ARGUMENTATIVE IN NATURE. IN BRIEF, ITS GRIEVANCE REVOLVES AROUND TWO ISSUES, NAMELY, DISALLOWANCE OF RS.18,04,906 OUT OF DEVELOPMENT CHARGES OF RS.22,06 ,076 AND CHARGING OF INTEREST UNDER SEC. 234C AND 234B OF THE INCOME-TAX ACT, 1961. IN GROUND NO.1, ASSESSEE HAS PLEADED THAT ASSESSING OFFICER H AS NO JURISDICTION TO FRAME THE ASSESSMENT ORDER, HOWEVER, THIS GROUND OF APPEAL WAS NOT PRESSED BY THE ASSESSEE HENCE IT IS REJECTED. 2 2. THE NEXT ISSUE RELATES TO DISALLOWANCE OF RS. 18 ,04,906 OUT OF DEVELOPMENT EXPENSES INCURRED BY THE ASSESSEE TOWAR DS CONSTRUCTION OF ROAD ETC. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN AOP. IT HAS FILED ITS RETURN OF INCOME ON 28.10.2004 DECLARING TOTAL INCOME OF RS.20,86,166. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) DATED IST OF SEPTEMBER 2005 WAS I SSUED WHICH WAS DULY SERVED UPON THE ASSESSEE. A QUESTIONNAIRE UNDER SEC . 142 DATED 19 TH APRIL 2006 WAS ISSUED. DURING THE SCRUTINY OF THE ACCOUNT S, IT REVEALED THAT THE ASSESSEE HAS PURCHASED AGRICULTURAL LAND IN THE ACC OUNTING PERIOD RELEVANT TO THE ASSESSMENT YEAR 2003-04. THIS LAND WAS SOLD BY THE ASSESSEE AFTER CARVING OUT PLOTS. THE SITE WAS GIVEN A NAME AS MA HADEV NAGAR YOJNA. THE ASSESSEE HAD CLAIMED DEVELOPMENT EXPENDITURE OF RS.22,06,076. THE ASSESSEE HAS ALLEGED THAT IT HAS CONSTRUCTED A ROAD BY INCURRING A SUM OF RS.16,41,170. IT HAS MADE A PAYMENT TO THE CONTRACT OR OF RS.2,50,000 ON 9.5.2003, FOR BITUMEN RS.96,170 ON 13.6.2003. THE A SSESSEE CLAIMED THAT E- EXPENSES INCURRED BETWEEN 19.11.2003 UP TO 30.3.200 4 ARE RS.12,95,000. ASSESSING OFFICER HAS EXAMINED THE DETAILS. HE RECO RDED THE STATEMENT OF THE MEMBERS OF THE AOP. ON AN ANALYSIS OF THE DETAILS, HE FOUND THAT A CONTRACT FOR CONSTRUCTION OF THE ROAD WAS GIVEN TO ONE SHRI SUBHASH CHANDER JAIN, HUF. A PAYMENT OF RS.3,51,170 WAS MADE TO SHRI SUBH ASH CHANDER JAIN. 3 ACCORDING TO THE ASSESSEE, IT REPRESENTS LABOUR CHA RGES ONLY WHEREAS ACCORDING TO THE ASSESSING OFFICER, THE CONTRACT WA S FOR MATERIAL ALSO. IN THIS CONNECTION, ASSESSING OFFICER MADE A REFERENCE TO THE CONFIRMATION GIVEN BY SHRI SUBHASH CHANDER JAIN. THEREFORE, ASSESSING OFFICER HAS ALLOWED RS.3,51,170 ONLY ON ACCOUNT OF ROAD CONSTRUCTION. T HE SECOND ITEM CLAIMED BY THE ASSESSEE IS LAYING DOWN OF PIPE LINE AND THE COST OF PIPE LINE. IT EMERGES OUT FROM THE RECORD THAT SUM OF RS.96,813 W AS CLAIMED TOWARDS THE COST OF PIPE AND RS.50,000 FOR LABOUR CHARGES TOWAR DS LAYING DOWN WATER PIPE LINE. ASSESSING OFFICER HAS ALLOWED RS.50,000 REPRESENTING LABOUR CHARGES TOWARDS LAYING DOWN WATER PIPE LINE BUT DID NOT ALLOW RS.96,183 ON THE GROUND THAT PIPES WERE PURCHASED IN ASSESSMENT YEAR 2003-04 AND THE DEDUCTION IN ASSESSMENT YEAR 2004-05 IS NOT ADMISSI BLE. 3. THE NEXT ITEM IN DISPUTE RELATES TO THE CONSTRUC TION OF A COMMUNITY HALL. ASSESSEE HAD CLAIMED SUM OF RS.12,95,000 TOWA RDS CONSTRUCTION OF A COMMUNITY HALL. ASSESSING OFFICER CONDUCTED SPOT IN QUIRY AND FOUND THAT NO COMMUNITY HALL WAS CONSTRUCTED BY THE ASSESSEE. IN THIS WAY, A DISALLOWANCE OF RS.18,04,906 OUT OF THE DEVELOPMENT EXPENSES HAS BEEN MADE. 4 4. LEARNED FIRST APPELLATE AUTHORITY HAS MADE A LUC ID ANALYSIS OF ALL THE FACTS AND THE ARGUMENTS MADE BY THE ASSESSEE IN THE WELL REASONED IMPUGNED ORDER. IT IS WORTH TO TAKE NOTE OF HIS FINDING WHIC H READ AS UNDER: I HAVE GIVEN A CAREFUL CONSIDERATION TO THE ENTIR E MATERIAL FACTS ON RECORDS AS ALSO THE SUBMISSIONS MADE BEFORE ME A ND IN MY VIEW, THE LD A.O. WAS WELL JUSTIFIED IN MAKING THE IMPUGN ED DISALLOWANCE OF RS.18,04,906 FOR REASONS DISCUSSED AS BELOW: IN RESPECT OF CONSTRUCTION OF ROAD, IT IS THE ARGUM ENT OF THE APPELLANT THAT ENTIRE MATERIALS FOR ROAD CONSTRUCTI ON WERE PURCHASED BY HIM WHEREAS ONLY LABOUR WAS SUPPLIED BY SH. SUBHASH CHANDRA JAIN HUF. ON THE CONTRARY SH. SUBHASH CHANDRA JAIN IN HI S STATEMENT DEPOSED THAT HE EXECUTED THE ENTIRE CONTRACT WORK I NCLUDING MATERIAL AND LABOUR. THE APPELLANT COULD NOT PRODUCE EVEN A SINGLE BILL OF MATERIAL PURCHASE TO PROVE HIS CONTENTION THAT ENTI RE MATERIALS FOR ROAD CONSTRUCTION WERE PURCHASED AND SUPPLIED BY HIM. TH E APPELLANT ALSO COULD NOT GIVE NAME AND ADDRESS OF ANY SINGLE PARTY FROM WHOM THE MATERIALS FOR ROAD CONSTRUCTION WERE PURCHASED. IT MAY BE STATED THAT ALL THE ALLEGED PAYMENTS FOR MATERIAL PURCHASES WER E MADE IN CASH BY THE APPELLANT. IN NUT SHELL, THERE IS NOT AN IOTA O F EVIDENCE ON THE BASIS OF WHICH THE CLAIM OF THE APPELLANT CAN BE ACCEPTED THAT ONLY LABOUR CONTRACT WAS GIVEN FOR ROAD CONSTRUCTION WHEREAS EN TIRE MATERIALS WERE SUPPLIED BY IT. IT MAY BE MENTIONED HERE THAT IN ROAD CONSTRUCTION, BITUMEN IS REQUIRED WHICH IS NOT AVAI LABLE IN OPEN MARKET. NO BILL FOR BITUMEN PURCHASE COULD BE PRODU CED BY THE APPELLANT. THE APPELLANT ALSO COULD NOT PRODUCE ANY EVIDENCE IN THE SHAPE OF CONTRACT WITH SH SUBHASH CHANDRA JAIN HUF TO PROVE HIS 5 CONTENTION THAT ONLY LABOUR CONTRACT WAS GIVEN TO H IM. THE APPELLANT ALSO COULD NOT GET AND PRODUCE ANY LETTER OR AFFIDA VIT OR CONFIRMATION FROM SH. JAIN IN THE MATTER TO PROVE HIS CONTENTION . ON THE CONTRARY EVIDENCE EXISTS ON RECORD IN THE SHAPE OF STATEMENT OF SH. JAIN THAT THE CONSTRUCTED THE ROAD FOR A TOTAL SUM OF RS. 3,51,17 0/- WHICH INCLUDED LABOUR AND MATERIAL, BOTH. IT MAY ALSO BE PLACED ON RECORD THAT SH. JAIN FILED THE RETURN WHEREIN HE DECLARED NP RATE OF 8% ON THE CONTRACT WORK RECEIPTS AS ABOVE. IT IS FURTHER NOTE WORTHY T HAT THE APPELLANT DID NOT PRODUCE ANY CASH BOOK BEFORE THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS ALSO OBSERVED THAT AS PER THE EXPENDITURES VOUCHERS (SELF MADE) RELATING TO ROAD CONSTRUCTION, THE ROAD WAS CONSTRUCTED FINALLY IN THE MONTH OF MARCH, 2004 WHEREAS IN THE STATEMENT RECORDED, THE MEMBER OF THE AOP STATE D THAT WORK WAS COMPLETED SOME WHERE IN AUGUST- SEPTEMBER, 2003. BE SIDES THAT, IN THE STATEMENT, IT WAS DEPOSED THAT THE TOTAL COST W AS AROUND RS. 8.25 LACS WHEREAS IN THE RETURN, THE SAME WAS CLAIMED AT RS. 16,41,170/-. THE ABOVE CONTRADICTIONS WHICH ARE QUITE MATERIAL H AVE REMAINED TOTALLY UNRESOLVED. IN THE LIGHT OF THE ENTIRE FACTS AS ABOVE, IT REQUI RES TO BE HELD THAT THE APPELLANT COMPLETELY FAILED IN DISCHARGING THE ONUS WHICH LAY ON HIM TO PROVE THAT HE INCURRED A SUM OF RS. 16,41 ,170/- TOWARDS ROAD CONSTRUCTION. IN THE LIGHT OF THE ENTIRE DISCUSSION AS ABOVE, I H OLD THAT THE LD. AO WAS JUSTIFIED IN ACCEPTING ROAD CONSTRUCTION COS T AT RS. 3,51,170/- ONLY. 6 IN RESPECT OF CLAIM OF EXPENDITURE ON COMMUNITY HAL L, THE ENTIRE FACTS, WHEN LOOKED IN TOTALITY, LEADS TO ONLY ONE C ONCLUSION THAT THE APPELLANT AOP DID NOT CONSTRUCT ANY COMMUNITY HALL AND THE ENTIRE CLAIM IS ADMITTEDLY FALSE. IT REQUIRES TO BE NOTED THAT EACH AND EVERY CONSTRUCTION AND MORE SPECIFICALLY A COMMUNITY HALL CAN ONLY BE CONSTRUCTED AND BUILT WITH THE PRIOR PERMISSION OF THE UIT OR THE CONCERNED MUNICIPALITY. THE APPELLANT COULD NOT GIV E ANY EVIDENCE TO THIS EFFECT THAT IT SUBMITTED A PLAN TO THE UIT/MUN ICIPALITY FOR CONSTRUCTION OF A COMMUNITY HALL. HOWEVER, IT IS AL SO TRUE THAT UNAUTHORIZED CONSTRUCTIONS DO TAKE PLACE BUT UNDER SUCH CIRCUMSTANCES, THE ONUS LIES HEAVILY ON THE APPELLA NT TO PROVE THAT IT ADMITTEDLY CONSTRUCTED THE UNAUTHORIZED STRUCTURE. SUCH ONUS CAN BE DISCHARGED TO SOME EXTENT BY PRODUCING THE BILLS FO R MATERIAL PURCHASES AND AFFIDAVITS OF THE PERSONS LIVING IN T HE VICINITY OF THE UNAUTHORIZED STRUCTURE AND ALSO BY PRODUCING PHOTOG RAPH OF THE STRUCTURE. IN THE INSTANT CASE, THE APPELLANT MISER ABLY FAILED IN DISCHARGING EVEN THE PRELIMINARILY ONUS WHICH LAY O N HIM. THE APPELLANT COULD NOT PRODUCE EVEN A SINGLE BILL FOR MATERIAL PURCHASE OR LABOUR ETC. NO MUSTER ROLL REGISTER COULD BE PRODUC ED IN THE MATTER. NO AFFIDAVITS OR LETTER ETC, OF THE PERSONS RESIDING I N THE VICINITY OF THE COMMUNITY HALL WERE PRODUCED ON THE BASIS OF WHICH THE EXISTENCE OF THE COMMUNITY HALL COULD BE ESTABLISHED. EVEN THE A PPELLANT FAILED TO PROVIDE A PHOTOGRAPH OF THE COMMUNITY HALL EITHER T O THE LD. AO OR TO THE UNDERSIGNED. ON THE TOP IT, THE SPOT INQUIRES M ADE BY THE LD. AO CLEARLY POINTED OUT THAT AT THE GIVEN SITE, NO COMM UNITY HALL EXISTS AND ON THE CONTRARY THERE IS A DURGA MATA JI MANDIR WHI CH WAS ALSO NOT 7 CONSTRUCTED BY THE APPELLANT. SH. MANMOHAN CHADDA, PUJARI OF THE MANDIR DEPOSED BEFORE THE LD. AO THAT HE IS WORKING AS PUJARI IN THE TEMPLE SINCE MARCH, 2004. IN THE LIGHT OF AMPLE EVI DENCES ON RECORD, NO CREDENCE CAN BE GIVEN TO THE ARGUMENT OF THE APP ELLANT THAT IT CONSTRUCTED COMMUNITY HALL AND LATER SOME ONE PLACE D IDOL OF THE DURGA MATA JI IN THE COMMUNITY HALL AND CONVERTED T HE SAME IN A TEMPLE. IT IS OBSERVED THAT IN THE VARIOUS AGREEMENTS FOR S ALE OF PLOTS, THERE IS REFERENCE FOR ROADS BUT THERE IS ABSOLUTEL Y NO REFERENCE TO THE COMMUNITY HALL. HAD THERE BEEN ANY PROVISION FOR A COMMUNITY HALL, REFERENCE FOR THE SAME SHOULD HAVE BEEN FOUND IN TH E AGREEMENTS. THIS ALSO SHOWS THAT NO COMMUNITY HALL EXISTED AT THE GI VEN SITE. BESIDES THAT, SUBSTANTIAL PUBLICITY IS DONE FOR SALE OF PLO TS AND WHILE DOING SUCH PUBLICITY, REFERENCE IS INVARIABLY MADE TO VAR IOUS FACILITIES SUCH PARK, COMMUNITY HALL, ROADS, DRAINAGE FACILITIES, R OAD LIGHTS ETC. TO ATTRACT THE PROSPECTIVE BUYERS. IN THE INSTANT CASE , NO EVIDENCE COULD BE FURNISHED IN THE SHAPE OF PUBLICITY MATERIAL ETC ., ON THE BASIS OF WHICH THE EXISTENCE OF COMMUNITY HALL COULD BE PROV ED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE FILED VALUATION REPORT DATED 24-12-06 OF THE SAID COMMUNI TY HALL VALUING THE SAME AT RS. 12,95,000/-. THE RECORD FURTHER REV EALS THAT THE ASSESSEE FILED LETTER DATED 21-12-06 BEFORE THE LD. AO WHEREIN THE MEASUREMENT OF THE COMMUNITY HALL WAS AS BELOW: 8 COMMUNITY HALL WITH BOUNDARY WALL 60 FEET X 60 FEET =3600 SQ. FEET HEIGHT 18 FEET UNDERGROUND 16 FEET X 17 FEET = 272 SQ. FEET HEIGHT 9 FEET PERUSAL OF THE VALUATION REPORT REVEALS THAT THERE IS NO MENTION OF ANY BOUNDARY WALL WHEREAS THE APPELLANT IN HIS L ETTER DATED 21-12- 06 HAS STATED THAT THE SAID COMMUNITY HALL IS WITH A BOUNDARY WALL. THUS, THE SAID VALUATION REPORT IS UNRELIABLE BEING INCOMPLETE. BESIDES THAT, THE VALUER IN HIS REPORT HAS STATED THE AREA OF BASEMENT FLOOR AT 42.23 SQ. METERS WHICH IS EQUIVALENT TO 454.3 SQ. F EET WHEREAS THE APPELLANT IN HIS LETTER DATED 21-12-06 HAS STATED T HE AREA OF BASEMENT FLOOR AT 272 SQ. FT. SIMILARLY, THE VALUER HAS STAT ED THE HEIGHT OF THE GROUND FLOOR AT 13.72 METER WHICH IS EQUIVALENT TO 45 FEET WHEREAS THE APPELLANT IN HIS LETTER DATED 21-12-06 HAS STATED T HE HEIGHT AT 18 FEET ONLY. IN THE VALUATION REPORT THERE IS NO REFERENCE TO ANY TEMPLE WHEREAS BEFORE ME THE APPELLANT STATED AND ARGUED T HAT THEY IN FACT CONSTRUCTED A COMMUNITY HALL BUT SOMEONE MIGHT HAVE INSTALLED THE IDOL OF DURGA MATA JI. THEREFORE, IT APPEARS THAT T HE VALUATION REPORT DOES NOT PROVIDE CORRECT PICTURE OF THE STRUCTURE. HOW COULD THE VALUER FAILED TO MENTION THE FACTUAL ASPECT OF PLACEMENT O F IDOL OF DURGA MATA JI. A BUILDING WITH A HEIGHT OF 45 FEET CANNOT BE CONSTRUCTED WITHOUT AN ARCHITECT/STRUCTURAL ENGINEER AND REQUIR ES FOOL PROOF DESIGNS TO SUPPORT THE HEIGHT WHEREAS THE APPELLANT HAS FAILED TO 9 PROVIDE THE STRUCTURAL DESIGNS EITHER TO THE VALUER OR TO THE UNDERSIGNED OR TO THE LD. AO. HEIGHT OF 45 FEET IS QUITE SUBSTANTIAL AND FOUND IN CINEMA HALL/LARGE CONFERENCE HALL ETC. WHEREAS IN THE ORDINARY RESIDENTIAL HOUSES, THE HEIGHT VARIES BETW EEN 9 TO 11 FEET. UNLESS PROPER SUPPORT AND STRENGTH IS PROVIDED, THE BUILDING ROOF WITH A HEIGHT OF 45 FEET MAY COLLAPSE. IN THE LIGHT OF THE ENTIRE FACTS AS ABOVE, I HOLD T HAT ON THE GIVEN FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT THE APPELLANT CONSTRUCTED A COMMUNITY HALL. THE DISALLOWANCE ACCO RDINGLY, STANDS UPHELD. IN RESPECT OF DISALLOWANCE OF PART EXPENDITURES RE LATING TO LAYING OF WATER PIPE LINES, THE FINDINGS OF THE LD. AO ON THE GIVEN FACTS ARE WELL JUSTIFIED. IT IS OBSERVED THAT PIPES FOR A SUM OF RS. 96,813/- WERE PURCHASED IN THE PRECEDING AY 03-04 A ND THEREFORE, NO CLAIM FOR DEDUCTION FOR THE SAME CAN BE PROVIDED IN THE AY 04-05 UNDER REFERENCE. HOWEVER, IT IS A FACT THAT THE JOB OF LAYING THE PIPE LINE WAS DONE IN THE RELEVANT AY 04-05 UNDER REFERE NCE. HOWEVER, THE APPELLANT COULD NOT PLACE AN IOTA OF EVIDENCE REGAR DING THE LABOUR JOB EXPENDITURE INCURRED BY IT ON LAYING SUCH WATER PIP ELINE. NO DETAILS IN THE MATTER HAVE BEEN FURNISHED SUCH AS THE LENGTH, WIDTH AND DEPTH OF THE FURROWS IN WHICH THE WATER PIPES WERE LAID. NO MUSTER ROLL REGISTER/WAGES REGISTER IN THE MATTER COULD BE PROD UCED ON THE BASIS OF WHICH THE LABOUR CHARGES COULD BE VERIFIED AND QUAN TIFIED. IT IS ALSO OBSERVED THAT ALL THE EXPENDITURES ON LABOUR JOB WE RE INCURRED IN CASH. TO REPEAT, THE APPELLANT HAS MISERABLY FAILED IN PL ACING BEFORE THE LD. 10 AO OR ME ANY EVIDENCE WHAT SO EVER IN THE MATTER. U NDER SUCH CIRCUMSTANCES, AN ESTIMATE OF EXPENDITURES REQUIRES TO BE MADE. IT IS OBSERVED THAT THE WATER PIPES COSTED THE APPELLANT RS. 96,813/- AND THEREFORE, THE LD. AO WAS JUSTIFIED IN ESTIMATING L ABOUR EXPENDITURE FOR LAYING THE PIPES AT RS. 50,000/- WHICH IS MORE THAN 50% OF THE MATERIAL COST. NORMALLY LABOUR JOB EXPENDITURES IN LAYING WATER PIPE LINES AT A DEPTH UP TO 4 FEET COSTS 30% TO 40% OF T HE MATERIAL COST AND THEREFORE, THE ESTIMATED EXPENDITURE OF RS. 50,000/ -ALLOWED BY THE LD. AO IS VERY FAIR AS ALSO REASONABLE AND REQUIRES NO INTERFERENCE. IN THE LIGHT OF THE ENTIRE DISCUSSION AS ABOVE, THE DISALLOWANCE OF DEVELOPMENT EXPENDITURES AT RS. 18,04,906/- STAN DS UPHELD. 5. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUN ING THE ORDER OF THE LEARNED CIT(APPEALS) CONTENDED THAT ASSESSEE HAS GI VEN LABOUR CONTRACT TO SHRI SUBHASH CHANDER JAIN. THE MATERIAL FOR THE ROA D WAS PURCHASED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT ASSESSEE HAS CO NSTRUCTED A COMMUNITY HALL. HE PRODUCED COPY OF THE SITE PLAN WHICH PLACE D ON PAGE 21 OF THE PAPER BOOK. HE ALSO MADE A REFERENCE TO THE VALUATION REP ORT SUBMITTED BY SHRI SANJAY CHAUHAN, CHARTERED ENGINEER. ON THE STRENGTH OF THESE DOCUMENTS, HE CONTENDED THAT DEVELOPMENT EXPENSES INCURRED BY THE ASSESSEE DESERVES TO BE ALLOWED. ON THE OTHER HAND, LEARNED DR RELIE D UPON THE ORDER OF LEARNED FIRST APPELLATE AUTHORITY. 11 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. WE HAVE EXTRACTED THE FINDINGS OF THE LEARNED CIT(APPEALS) IN THE FOREGOING PARAGRAPHS. LEARNED F IRST APPELLATE AUTHORITY HAS CONSIDERED ALL THESE FACTS ELABORATEL Y. THE LEARNED COUNSEL FOR THE ASSESSEE EXCEPT REITERATING HIS CONTENTIONS AS WERE RAISED BEFORE THE LEARNED CIT(APPEALS) WAS UNABLE TO POINT OUT ANY FA CT WHICH CAN SUGGEST THE ERRORS COMMITTED BY THE LEARNED FIRST APPELLATE AUTHORITY AND WHICH CAN PURSUED US TO TAKE A DIFFERENT OPINION. 7. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE ALLEGED SITE PLAN AVAILABLE ON PARE 21. THE ORI GINAL BLUE PRINT OF THIS PLAN WAS SHOWN TO US AT THE TIME OF HEARING. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AT THE TIME OF HEARING THAT IN THE BOTTOM OF THIS PLAN, THERE IS A PARKS, WHERE COMMUNITY HALL HAS ALLEGED TO HAVE BEE N CONSTRUCTED. ASSESSING OFFICER HAS POINTED OUT THAT IT IS A DURG A TEMPLE ALREADY EXISTING. ASSESSEE MIGHT HAVE CONTRIBUTED SOME AMOUNT FOR CON STRUCTION OF A ROOM IN THIS TEMPLE. IN OUR OPINION, IT IS NOT THE CONSTRUC TION OF THE COMMUNITY HALL WHICH IS DIRECTLY LINKED WITH THE DEVELOPMENT OF CO LONY OR ASSOCIATED WITH THE SALE OF PLOTS. IF FOR ANY CHARITABLE PURPOSE, A SSESSEE IS GIVING MONEY THEN 12 NOBODY CAN PROHIBIT IT BUT THAT CANNOT BE ALLOWED A S A ALLOWABLE DEDUCTION FOR CLAIMING ANY EXPENDITURE. ASSESSEE HAS TO DEMON STRATE THAT IT IS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSIN ESS. LEARNED CIT(APPEALS) HAS DISCUSSED THE ALLEGED VALUERS REP ORT. 8. THE ASSESSEE HAD CLAIMED THE COST OF PIPE AMOUNT ING TO RS.96,813. THIS WAS NOT ALLOWED TO THE ASSESSEE ON THE GROUND THAT THESE PIPES WERE PURCHASED IN ASSESSMENT YEAR 2003-04. IN OUR OPINIO N, ASSESSEE IS ENGAGED IN THE DEVELOPMENT OF A COLONY. THE PIPES HAVE BEEN USED IN THE DEVELOPMENT ACTIVITY. THE EXPENSES IN A WAY TO BE C APITALIZED ALONG WITH THE PROJECT. IN THIS YEAR, IT HAS SOLD THE PLOTS, THERE FORE, CORRESPONDING EXPENSES DESERVES TO BE ALLOWED. THE PIPES HAVE BEEN USED IN THIS YEAR WHICH GIVE RISE TO THE INCOME ALSO. THEREFORE, ASSESSING OFFIC ER IS NOT JUSTIFIED TO DENY THE DEDUCTION OF THE PIPES WHOSE GENUINENESS OTHERW ISE HAS NOT BEEN DOUBTED. 9. WITH REGARD TO THE OTHER DISALLOWANCE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(APPEALS) EXTRACTED SUPRA. AS FAR AS CHARGING OF INTEREST UNDER SEC. 234B AND 234C IS CONCERNED, ASS ESSING OFFICER HAS SPECIFICALLY GAVE DIRECTIONS IN THE ASSESSMENT ORDE R. THESE ARE CONSEQUENTIAL 13 IN NATURE AND LEARNED CIT(APPEALS) HAS RIGHTLY UPHE LD THE CHARGING OF INTEREST. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 29.08.201 1 SD/- SD/- ( K.D. RANJAN ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29/08/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR