ACIT, Lucknow V. Shri Shri Ram Singhal, Lucknow

ITA 480/LKW/2011

• Counselvise Citation: 48023714 RSA 2011
• Duration Of Justice: 2 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-01-2014
• Assessment Year: misc
• Appeal Filed On: 05-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K DEY
• Assessee Lawyers: K R RASTOGI
• Keywords: Reopening of assessment; Unexplained investment; Valuation report
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO S . 480 & 481/LKW/2011 ASSESSMENT YEAR S : 2005 - 06 & 2004 - 05 ASSTT. CIT RANGE IV, LUCKNOW V . SHRI. RAM SINGHAL PROP. M/S RAMA DAL & RICE MILL 444, MOTI NAGAR, LUCKNOW PAN: AOAP50344H (APP ELL ANT) (RESPONDENT) ITA NOS.679 & 680/LKW/2011 ASSESSMENT YEAR S : 2006 - 07 & 2007 - 08 ASSTT. CIT RANGE IV, LUCKNOW V. SHRI. RAM SINGHAL 444, MOTI NAGA R, LUCKNOW PAN: AOAPS0344H (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. P. K. DEY, D.R. RESPONDENT BY: SHRI.. K. R. RASTOGI, C.A. DATE OF HEARING: 08.01.2014 DATE OF PRONOUNCEMENT: 10.01.2014 O R D E R PER SUNIL KUMAR YADAV: THESE APPEAL S ARE PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDERS OF THE LD. CIT(A) ON COMMON ISS UE WITH REGARD TO THE EVIDENTIARY VALUE OF THE VALUATION REPORT OF THE DEPARTMENTAL VALUATION OFFICER (DVO) CONSEQUENT TO THE REFERENCE MADE BY THE ASSESSING OFFICE R : - 2 - : WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE , IN THE LIGHT OF THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT, 328 ITR 513. 2 . SINCE THESE APPEALS WERE HEARD TOGETHER, THESE ARE BEING DISPOSED OF THROUGH THIS CONSOLID ATED ORDER. 3 . FOR ASSESSMENT YEAR 200 4 - 0 5 (ITA NO. 4 8 1 /LKW/2011), THE ADDITION WAS MADE ON THE BASIS OF THE VALUATION REPORT OF THE DVO CONSEQUENT TO THE REFERENCE MADE BY THE ASSESSING OFFICER WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE ADD ITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE LD. CIT(A) FOLLOWING THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT (SUPRA), IN WHICH THEIR LORDSHIPS HAVE CATEGORICALLY HELD THAT THE ASSESSING AUTHORITY COULD NOT REFER T HE MATTER TO THE DVO IN A CASE WHERE THERE WAS A CATEGORICAL FINDING RECORDED BY THE TRIBUNAL THAT THE BOOKS OF ACCOUNT WERE NOT REJECTED. 4 . AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5 . IN OTHER APPEALS I.E. ITA NOS .679/LKW2011, 6 80 & 48 0 /LKW/2011, THE ASSESSING OFFICER HAS RELIED UPON THE DVOS REPORT OBTAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN ASSESSMENT YEAR 2004 - 05 AND MADE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT HAVING REOPENED THE ASSESSMENT U NDER SECTION 147 OF THE ACT . THIS ADDITION WAS ALSO DELETED BY THE LD. CIT(A) IN THE LIGHT OF THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT (SUPRA) BY HOLDING THAT ONCE THE DVOS REPORT CANNOT BE RELIED ON FOR MAKING AN ADDIT ION IN A REGULAR ASSESSMENT, THE ASSESSMENT IN OTHER YEARS CANNOT BE REOPENED. ACCORDINGLY THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT WAS DELETED BY T HE LD. CIT(A) IN OTHER APPEALS . : - 3 - : 6 . AGGRIEVED, THE REVENUE HAS PREFERRED APPEALS THROUGH ITA NOS. 679/LKW2011, 680 & 484/LKW/2011. 7 . THEREFORE IN ALL THE APPEALS, THE SOLITARY ISSUE INVOLVED IS WITH REGARD TO THE EVIDENTIA RY VALUE OF THE DVOS REPORT OBTAINED BY THE ASSESSING OFFICER CONSEQUENT TO REFERENCE MADE TO THE DVO WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE. IN THIS REGARD THE HON'BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT (SUPRA) HAS CATEGORICALLY HELD THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO MAKE REFERENCE TO THE DVO FOR VALUING THE COST OF CONSTRUCTION OF THE PROP ERTY WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE. IF ANY REPORT IS OBTAINED IN RESPONSE TO THE REFERENCE MADE OF THE DVO WITHOUT REJECTING THE BOOKS OF ACCOUNT, IT CANNOT BE RELIED ON FOR MAKING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT . IF T HIS IS THE SITUATION, THEN THE VALUATION REPORT OF THE DVO CANNOT BE USED AS A PIECE OF EVIDENCE FOR REOPENING OF ASSESSMENT. THEREFORE IN ALL THE CASE S WHEN THE DVOS REPORT CANNOT BE CONSIDERED AS A VALID PIECE OF EVIDENCE FOR MAKING ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT, THE ASSESSMENT REOPENED FOR ASSESSMENT YEARS 2005 - 06, 2006 - 07 AND 2007 - 08 IS NOT VALID. WE ACCORDINGLY FIND OURSELVES IN AGREEMENT WITH THE ORDERS OF THE LD. CIT(A) WHO HAS RIGHTLY ANNULLED THE ASSESSMENT REOPENED ON THE BASIS OF THE VALUATION REPORT. 8 . SO FAR AS ITA NO.481/LKW/2011 IS CONCERNED, THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT WAS DELETED BY THE LD. CIT(A) HAVING OBSERVED THAT REFERENCE TO THE DVO WAS NOT PROPER WITHOUT REJECTING THE BOOKS OF ACCOUNT IN THE LIGHT OF THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT (SUPRA). SINCE THE DVOS REPORT DOES NOT CARRY ANY EVIDENTIA RY VALUE IN THE LIGHT OF THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT ( SUPRA), WE FIND NO MERIT IN THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION : - 4 - : 69 OF THE ACT. WE ACCORDINGLY CONFIRM THE ORDER OF TH E LD. CIT(A) IN THIS REGARD. 9 . IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNC ED IN THE OPEN COURT ON 10.1.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.1.2014 JJ: 0801 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR