The Dy. CIT, Vijayawada V. M/s. K.S.R. Anjayneyulu & Sons, Vijayawada

ITA 464/VIZ/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8887 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 23-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S ARVAVINDAKSHAN
• Assessee Lawyers: K RAMESH BABU
• Section: 69C; 143(3); 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D .S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 464 /VIZAG/ 2016 ( / ASSESSMENT YEAR: 20 12 - 13 ) DEPUTY COMMISSIONER OF INCOME - TAX CIRCLE - 2(1), VIJAYAWADA M/S KSR ANJANEYULU & SONS D.NO.48 - 14 - 4/1 GUNADALA, VIJAYAWADA [PAN NO. AAKFK3748F ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI R.S.ARVAVINDAKSHAN, DR / R ESPONDENT BY : SHRI K RAMESH BABU, AR / DATE OF HEARING : 12.06.2017 / DATE OF PRONOUNCEMENT : 14 .06.2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDE R OF THE LD. C OMMISSIONER OF INCOME TAX (A PPEALS ) [CIT(A)], VIJAYAWADA IN ITA NO.246/CIT(A)/VJA/2015 - 16 DATED 30.08.2016 FOR THE A.Y. 20 12 - 13 . 2 ITA NO.464/VIZAG/2016, AY 2012 - 13 M/S KSR ANJANEYULU & SONS 2. ALL THE G ROUNDS OF APPEAL ARE RELATED TO THE ADDITION OF DIFFERENCE IN COST O F CONSTRUCTION AMOUNTING TO RS.70,91,281/ - MADE U/S 69C OF IT ACT . 3. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL LOSS OF RS.83,90,253/ - . THE CASE WAS REOPENED U/S 147 OF THE ACT AND THE RE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE AC T RESULTING IN A DDITION OF RS.70,91,280/ - RELATING TO THE DIFFERENCE IN COST OF CONSTRUCTION OF THE HOTEL BUILDING . 4. DURING THE PREVIOUS YEAR, RELEVANT TO THE ASSESSMENT YEAR 2012 - 13, THE ASSESSEE CONSTRUCTED A HOTEL BUILDING AT D.NO.48 - 12 - 4/1, GUNADAL A, RAMAVARAPU RING, VIJAYAWADA. THE CASE WAS REFERRED TO THE DISTRICT VALUATION OFFICER (DVO) FOR VALUING THE COST OF CONSTRUCTION . THE DVO HAS VALUED THE COST OF CONSTRUCTION OF BUILDING AT RS.8,03,38,000/ - . SUBSEQUENTLY, THE ASSESSEE MADE AN APPLICATION TO THE DVO TO RECONSIDER THE COST OF CONSTRUCTION, FILED OBJECTIONS AND OTHER EVIDENCES BEFORE THE DVO . THE DVO HAS RECONSIDERED THE COST OF CONSTRUCTION AND REVISED THE ESTIMAT ION OF COST OF CONSTRUCTION OF TOTAL BUILDING AT RS.7,96,30,000/ - INSTEAD OF RS.8,03,38,000/ - AGAINST THE COST OF CONSTRUCTION ADMITTED BY THE ASSESSEE WAS AT RS.7,25,38,719/ - . THE ASSESSING OFFICER BROUGHT THE DIFFERENCE AMOUNT OF RS.70,91,281/ - AS 3 ITA NO.464/VIZAG/2016, AY 2012 - 13 M/S KSR ANJANEYULU & SONS UNDISCLOSED INCOME U/S 69C OF IT ACT. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFI CER, THE ASSESSEE WENT ON APPEAL BEFORE CIT(APPEALS), VIJAYAWADA. THE LD.CIT(APPEALS), VIJAYAWADA HAD ALLOWED THE DEDUCTION OF 10% TOWARDS SELF SUPERVISION AND 15% TOWARDS RATE VARIATION BETWEEN CPWD AND STATE PWD RATES FOLLOWING THE ORDER OF THIS TRIBUNA L IN THE CASE OF MR.K.SATISH IN ITA NO.49/VIZAG/2013 DATED 04.12.2015. CONSEQUENTLY, THE COST OF CONSTRUCTION WORKED OUT TO LESS THAN THE ESTIMATED COST OF CONSTRUCTION OF DVO , T H US , THE LD. CIT (APPEALS) HELD THAT THE COST OF CONSTRUCTION ADMITTED BY THE ASSESSEE IS REASONABLE AND NO ADDITION IS REQUIRED TO BE MADE IN THIS CASE TOWARD S THE DIFFERENCE IN COST OF CONSTRUCTION. ACCORDINGLY, THE LD.CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AND ALLOWED THE ASSESSEES APPEAL . AGGRIEVED B Y THE ORDER OF THE LD.CIT(APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL PLACED ON RECORD, WHILE LD. DR PLACED HEAVY RELIANCE ON THE ORDER OF THE ASSESSING OFFICER . THE LD. A R PLACED RELIANCE ON THE DECISI ON OF THIS TRIBUNAL AS WELL AS LD.CIT (APPEALS) ORDER AND A RGU ED THAT THE ASSESSEE HAS MAINTAINED THE BOOKS OF ACCOUNT S REGULARLY AND ENTIRE COST OF CONSTRUCTION WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS HENCE NO INTERFERENCE IS CALLED FOR IN T HE ORDER OF THE LD.CIT (APPEALS). LD. CIT 4 ITA NO.464/VIZAG/2016, AY 2012 - 13 M/S KSR ANJANEYULU & SONS (APPEALS) FOLLOWED THE ORDER OF THIS TRIBUNAL AND ALLOWED 10% ON ACCOUNT OF SELF SUPERVISION CHARGES AND 15% DEDUCTION TOWARDS THE RATE VARIATION BETWEEN CPWD AND STATE PWD RATES WHICH APPEARS TO BE REASONABLE. S INCE THE LD. CIT (APPEALS) ALLOWED THE RELIEF FOLLOWING THE ORDER OF THIS TRIBUNAL IN THE CASE CITED (SUPRA) WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(APPEALS) AND THE SAME IS UPHELD. 6 . IN THE RESULT, THE APPEAL FILED BY THE REV ENUE IS DISMISSED. T HE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14 TH JUN 20 17 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 14.06.2017 L. RAMA, SPS 5 ITA NO.464/VIZAG/2016, AY 2012 - 13 M/S KSR ANJANEYULU & SONS / COPY OF THE ORDER FORWARDED TO : - 1. / THE APPELLANT DCIT, CIRCLE - 2(1), VIJAYAWADA 2 . / THE RESPONDENT M/ S KSR ANJANEYULU & SONS, D.NO.48 - 14 - 4/1, GUNADALA, VIJAYAWADA 3 . / THE PR. CIT , VIJAYAWADA 4 . ( ) / THE CIT (A) , VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUAR D FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM