SHRI PRAHLADRAI GARG (HUF), Neemuch V. The ITO, Neemuch

ITA 485/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5734 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 30-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: GIRISH AGRAWAL CAS
• Keywords: Source of fund; Valuation report
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO.482 TO 486/IND/2014 A.Y. : 2000-01 TO 2004-05 SHRI PRAHLADRAI GARG (HUF) ACIT, NEEMUCH VS. 2(1), INDORE. APPELLANT RESPONDENT PAN NO. AAAHG3488A A PPELLANT S BY : SHRI VIJAY BANSAL AND SHRI GIRISH AGRAWAL, CAS RESPONDENT BY : SHRI G.S.GAUTAM, DR O R D E R THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A), UJJAIN, DATED 26.02.2014 FOR THE A SSESSMENT YEARS 2000-01 TO 2004-05. DATE OF HEARING : 29.12.2015 DATE OF PRONOUNCEMENT : 23 .0 2 .201 6 SHRI PRAHLADRAI GARG HUF VS. ACIT,2(1), INDORE. I.T.A.NOS. 482 TO 486/IND/2014 - A.YS. 2000-01 TO 2004-05 2 2 2. SINCE THE FACTS AND GROUNDS TAKEN BY THE ASSESSEE A RE COMMON, I DISPOSE OF ALL THESE APPEALS BY THIS CONS OLIDATED ORDER FOR THE SAKE OF CONVENIENCE 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 FOR ASSESSMENT YEARS 2000-01 TO 2003-04 AND FOR ASSESSMENT YEAR 20 04-05, THE RETURN WAS FILED IN REGULAR COURSE U/S 139. DUR ING THE YEAR UNDER CONSIDERATION, IT WAS FOUND THAT THE ASS ESSEE HAS MADE INVESTMENT IN CONSTRUCTION OF GODOWN AT RS. 3, 80,000/- IN ASSESSMENT YEAR 2000-01 AND IN THE VARIOUS ASSES SMENT YEARS FROM 2001-02 TO 2004-05. THE TOTAL VALUE RECO RDED IN THE BOOKS WERE SHOWN BY THE TABULATED CHART, WHICH READS AS UNDER :- A.Y. ASSESSMENT COMPLETED U/S VALUE AS RECORDED BOOKS OF ACCOUNTS (REFER BALANCE SHEET ESTIMATED VALUATION AS PER AVO OF THE DEPARTMENT DIFFERENCE ADDED BY THE ASSESSING OFFICER OTHER ADDITION ON AGRICULTURE INCOME 2000-01 148 RWS 143(3) 3,80,000 5,74,010 1,94,010 2001-02 148 RWS 143(3) 5,70,000 8,61,020 2,91,020 2002-03 148 RWS 143(3) 61,500 1,19,860 58,360 17,000 2003-04 148 RWS 143(3) 1,41,500 2,75,780 1,34,280 33,000 2004-05 143(3) 8,05,567 16,45,590 8,40,023 19,58,567 34,76,260 15,17,693 4. THE AO HAS FOUND THAT TOTAL INVESTMENT IN CONSTRUCTION OF GODOWN WAS SHOWN IN ALL THE YEARS A MOUNTING SHRI PRAHLADRAI GARG HUF VS. ACIT,2(1), INDORE. I.T.A.NOS. 482 TO 486/IND/2014 - A.YS. 2000-01 TO 2004-05 3 3 TO RS. 19,58,567/-, WHEREAS THE AO HAS ESTIMATED TH E VALUATION AT RS. 34,76,260/- BASED ON THE VALUATION REPORT OF AVO OF THE DEPARTMENT. THEREFORE, THE AO HAS ADDED THE DIFFERENCE OF RS. 15,17,693/- AS UNEXPLAINED INVEST MENT IN ALL THESE YEARS. 5. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) IN HIS ORDER HAS DISCUSSED THE ISSUE IN DETAIL AND DISMISSED THE APPEALS OF THE ASSESSEE. 6. THE ASSESSEE IS BEFORE ME. 7. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT TH E BOOKS OF ACCOUNT WERE PRODUCED AND EXAMINED BY THE ASSESSING OFFICER. ALL THE DOCUMENTS WERE SUBMITTED AND IN THE INSTANT CASE, THE AO HAS MADE THE ADDITION ONLY ON THE BASIS OF AVOS REPORT, WHICH IS NOT LEGAL. MOREOVER , THE AVO HAS BASED HIS REPORT ON CPWD RATES AS AGAINST THE L OCAL RATES AND ASSESSEE HAS ALSO NOT SHOWN THE SELF-SUPERVISIO N CHARGES AND AS PER THE DECISIONS OF VARIOUS TRIBUNALS AND H IGH COURTS THE SAME HAVE TO BE ALLOWED TO THE EXTENT OF 10 % T O 15% ON VALUATION BY DVO AND IF 10% IS TO BE CONSIDERED AS VALUE OF SHRI PRAHLADRAI GARG HUF VS. ACIT,2(1), INDORE. I.T.A.NOS. 482 TO 486/IND/2014 - A.YS. 2000-01 TO 2004-05 4 4 THE DVO, THEN IT COMES TO RS. 3,47,627/- AND HE REL IED ON VARIOUS DECISIONS. 8. THE LD. DR RELIED UPON THE ORDER OF AO. 9. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, AS FAR AS THE COST OF CONSTRUCTION OF GODOWN IS CONCERNED, TH E ASSESSEE WAS BOUND TO PRODUCE THE DETAILS OF THE EXPENDITURE INCURRED ON SUCH CONSTRUCTION, BUT THE ASSESSEE HAS FAILED T O PRODUCE ANY BILLS, VOUCHERS OR MATERIAL, LABOUR EXPENSES. S UCH EXPENSES WERE NOT PAID THROUGH CHEQUE AND ALL THE E XPENSES WERE SHOWN AT THE END. THE DVO HAS ESTIMATED THE CO ST OF CONSTRUCTION AT RS. 34,76,260/-, WHEREAS THE ASSESS EE HAS SHOWN THE EXPENSES OF RS. 19,58,567/-. THEREFORE, I N THE INTEREST OF JUSTICE AND FAIR PLAY, I AM OF THE VIEW THAT THERE IS SOME OBJECTION WHICH WAS FILED BY THE ASSESSEE AND IN THAT OBJECTION, THE DVO HAS CONSIDERED THE RATES OF CPWD INSTEAD OF LOCAL RATES. MOREOVER, ALLOWANCE FOR SELF-SUPERV ISION EXPENSES WERE ALSO NOT CONSIDERED BY THE DVO. INTER NAL ELECTRIFICATION, INSTALLATION CHARGES WERE ADDED BY DVO IN HIS ESTIMATION. MOREOVER, DVO CONSIDERED COST OF KOTA S TONE IN SHRI PRAHLADRAI GARG HUF VS. ACIT,2(1), INDORE. I.T.A.NOS. 482 TO 486/IND/2014 - A.YS. 2000-01 TO 2004-05 5 5 THE VALUATION IN PLACE OF NEEMUCH STONE AND SUKHEDA STONE, WHICH WAS ACTUALLY USED. THEREFORE, IN THE INTERES T OF JUSTICE AND FAIR PLAY, I AM OF THE VIEW THAT THE DIFFERENCE OF RS. 15,17,693/- IS ON HIGHER SIDE. THEREFORE, ON ESTIMA TE BASIS, I CONFIRM THE ADDITION ON ACCOUNT OF DIFFERENCE IN VA LUATION @ 50 % OF THE ADDITION MADE BY THE ASSESSING OFFICER IN ALL THE YEARS. THE AO IS DIRECTED TO SUSTAIN THE ADDITION C ONSIDERING ALLOWANCE @ 50% AS TABULATED UNDER :- A.Y. ASSESSMENT COMPLETED U/S VALUE AS RECORDED BOOKS OF ACCOUNTS (REFER BALANC SHEET ESTIMATED VALUATION AS PER AVO OF THE DEPARTMENT DIFFERENCE ADDED BY THE ASSESSING OFFICER ADDITION TO BE SUSTAINED BY AO @ 50% OF THE ADDITION MADE. 2000-01 148 RWS 143(3) 3,80,000 5,74,010 1,94,010 97,005 2001-02 148 RWS 143(3) 5,70,000 8,61,020 2,91,020 1,45,510 2002-03 148 RWS 143(3) 61,500 1,19,860 58,360 29,180 2003-04 148 RWS 143(3) 1,41,500 2,75,780 1,34,280 67,140 2004-05 143(3) 8,05,567 16,45,590 8,40,023 4,20,012 19,58,567 34,76,260 15,17,693 7,58,847 10. GROUND NO. 2 TAKEN FOR THE ASSESSMENT YEARS 2002-03 AND 2003-04, WHICH READS AS UNDER :- A.Y. 2002-03: BECAUSE THE UNDISCLOSED INCOME TAKEN FROM AGRICULTU RE AT RS. 17,000/- IS NOT CORRECT BOTH ON FACTS AND IN LA W. SHRI PRAHLADRAI GARG HUF VS. ACIT,2(1), INDORE. I.T.A.NOS. 482 TO 486/IND/2014 - A.YS. 2000-01 TO 2004-05 6 6 A.Y. 2003-04: BECAUSE THE UNDISCLOSED INCOME TAKEN FROM AGRICULTU RE AT RS. 33,000/- IS NOT CORRECT BOTH ON FACTS AND IN LA W. 11. THE ASSESSEE HAS ONLY TWO, SOURCES OF INCOME VIZ. R ENT AND AGRICULTURE. AGRICULTURE INCOME HAS BEEN ACCEPT ED AS RETURNED FOR ASSESSMENT YEAR 2004-05 AFTER VERIFICA TION OF VARIOUS RECORDS. IN ASSESSMENT YEAR 2002-03 AND 200 3-04. THE LD. AO REOPENED THE ASSESSMENT YEAR AND MADE AD HOC ADDITION BY ASSUMING CERTAIN PERCENTAGE OF AGRICULT URE PRODUCE AS SHORTAGE, WHICH IS BASELESS AND WITHOUT BRINGING ANY POSITIVE MATERIAL ON RECORD. THE LD. COUNSEL S UBMITTED THAT EVEN IF THE ADDITION IS SUSTAINED, THE CHARACT ER OF INCOME ADDED WILL CONTINUE TO BE AGRICULTURE INCOME AS ASS ESSEE DOES NOT HAVE ANY OTHER SOURCE OF INCOME OTHER THAN RENT WHICH IS NOT IN QUESTION. IT WAS SUBMITTED TO RETAIN THE CHA RACTER OF INCOME AS AGRICULTURE INCOME. 12. THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIE S BELOW. SHRI PRAHLADRAI GARG HUF VS. ACIT,2(1), INDORE. I.T.A.NOS. 482 TO 486/IND/2014 - A.YS. 2000-01 TO 2004-05 7 7 13. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE ASSESSEE HAS STOCK OF 94 QTLS. OF LAHSUN AND HE HAS SOLD FOR RS. 3,09,000/-. THE ASSESSEE HAS SOLD 94 QTLS A ND NO SHORTAGE HAS BEEN ACCOUNTED. LAHSUN CROP HAS HIGH M OISTURE CONTENT WHEN IT IS FRESH AND THERE IS CONSIDERABLE LOSS IN WEIGHT ON DRYING. I FIND THAT THE ASSESSEE MIGHT HA VE RESULTED INTO FURTHER LOSS OF WEIGHT. THEREFORE, THE LD. CIT (A) HAS TAKEN THE SHORTAGE OF 10%. THERE IS NO BASIS FOR TAKING S HORTAGE OF 10%. THEREFORE, WITHOUT BRINGING ANY EVIDENCE ON RE CORD, NO ADDITION CAN BE MADE. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, I REDUCE THE DISALLOWANCE FROM RS. 33,00 0/- TO RS. 10,000/- AND RS.10,000/- IS ADDED AS INCOME FROM OT HER SOURCES. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SHRI PRAHLADRAI GARG HUF VS. ACIT,2(1), INDORE. I.T.A.NOS. 482 TO 486/IND/2014 - A.YS. 2000-01 TO 2004-05 8 8 THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 23 RD FEBRUARY, 2016, SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 23 RD FEBRUARY, 2016. CPU*