Smt. Madan Hiran, BANSWARA V. DCIT, UDAIPUR

ITA 488/JODH/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5241 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 29-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Fair market value
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO S . 487 & 488 / JODH /201 4 (ASST. YEAR S : 200 9 - 1 0 & 2010 - 11 ) SMT. MADAN HIRAN, PROP. DEHATI STORE, 30 - 32, NATHELAV COLONY, BANSWARA - RAJASTHAN VS. DCIT (CENTRAL - 1), UDAIPUR . PAN NO. ABJPH 8150 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI ADV. DEPARTMENT BY : S MT. ALKA RAJVANSHI JAIN - DR DATE OF HEARING : 08 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 08 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER TH E S E ARE THE APPEAL S FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , CENTRAL, JAIPUR , FOR THE ASSESSMENT YEARS 2009 - 10 & 2010 - 11, BOTH DATED 21/08/2014. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THESE APPEALS IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 65,302/ - IN ASSESSMENT YEAR 2009 - 10 AND RS. 67,709/ - IN ASSESSMENT YEAR 2010 - 11 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF RESIDENTIAL HOUSE . 2 ITA NOS. 487 & 488/JODH/2014 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DECLARED I NVESTMENT IN CONSTRUCTION OF HOUSE PROPERTY AT RS. 12,56,000/ - AND THE DEPARTMENTAL VALUATION OFFICER ( DVO ) HAS DETERMINED THE INVESTMENT IN THE CONSTRUCTION OF THE HOUSE PROPERTY AT RS. 14,99,000/ - AS UNDER: - F.Y. DECLARED BY THE ASSESSEE DETERMINED BY THE DVO 2008 - 09 337530 402832 2009 - 10 349970 417679 2010 - 11 411000 490517 UPTO JUNE 2011 157500 187972 TOTAL 1256000 1499000 THEREFORE, THE ASSESSING OFFICER MADE THE ADDITION OF RS. 65,302/ - IN THE ASSESSMENT YEAR 2009 - 10 AND RS. 67,709/ - IN THE ASSESSMENT YEAR 2010 - 11 . 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. WHILE DOING SO, HE ALLOWED SELF - S UPERVISION CHARGES AT 5%. 5. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF DR. G. PREM A LATHA VS. DCIT IN ITA NO . 200/HYD/2014 FOR THE ASSESSMENT YEAR 2004 - 05 , DATED 05/09/2014 HAS ALLOWED SUPER - VISION CHARGES IN CONSTRUCTION OF HOUSE PROPERTY TO THE ASSESSEE AT 15%. HE SUBMITTED THAT IF 15% OF THE COST OF CONSTR U CTION IS ALLOWED TOWARDS SELF - SUPERVISION CHARGES INSTEAD OF 5% ALLOWED BY THE DVO, THEN THE DIFFEREN CE BETWEEN THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE AND THE COST OF CONSTRUCTION ESTIMATED BY THE DVO WILL BE RS. 88,945/ - WHICH IS APPROXIMATELY 7% OF THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE. HE RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF K.P. VARGHESE VS. ITO & ANOTHER ( 131 ITR 597 ) AND SUBMITTED TH A T THE HON'BLE SUPREME COURT HAS HELD THAT WHERE THE CONSIDERATION DECLARED BY THE ASSESSEE 3 ITA NOS. 487 & 488/JODH/2014 AND THE FAIR MARKET VALUE DETERMINED WAS LESS THAN 15% OF THE VALUE SO DECLARED , NO ADDITION CAN BE MADE TO THE INCOME OF THE ASSESSEE. HE, THEREFORE, PRAYED THAT THE ADDITION MADE SHOULD BE DELETED. 6. ON THE OTHER HAND , DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER S OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS SHOWN INVESTMENT IN CONSTRUCTION OF HOUSE PROPERTY AT RS. 12,56,000/ - AND THE DVO DETERMINED THE SAME AT RS.14,99,000/ - , WHILE DOIN G SO HE ALLOWED DEDUCTION TOWARDS SELF - SUPERVISION CHARGES AT 5%. THE ASSESSING OFFICER MADE THE ADDITION OF RS. 65,302/ - FOR THE ASSESSMENT YEAR 2009 - 10 AND RS. 67,709/ - FOR THE ASSESSMENT YEAR 2010 - 11 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE ON THE BASIS OF DVOS REPORT . THE CONTENTION OF THE ASSESSEE IS THAT IF SELF - SUPERVISION CHARGES IS ALLOWED AT 15% AS HAS BEEN ALLOWED BY THE DIFFERENT BENCHES OF THE TRIBUNAL, THEN THE DIFFEREN CE BETWEEN THE COST OF CONSTRUCTION ESTIMATED BY THE DVO AND THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE WOULD BE RS. 88,945/ - WHICH IS ABOUT 7% OF THE TOTAL COST OF CONSTRUCTION SHOWN BY THE ASSESSEE WHICH IS BEING LESS THAN 15%, NO ADDITION CAN BE MADE AND FOR WHICH HE RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE (SUPRA) . WE FIND THAT THE HYDERABAD BENCH OF THE TRIBUNAL HAS ALLOWED SELF - SUPERVISION CHARGES TO THE ASSESSEE AT 15% OF THE COST OF CONSTRUCTION . IT IS NOT IN DISPUTE BY THE REVENUE THAT IF SELF - SUPERVISION CHARGES IS ALLOWED THE ASSESSEE AT 15% IN PLACE OF 5% ALLOWED BY THE DVO, THEN THE DIFFEREN CE BETWEEN THE ESTIMATED COST OF CONSTRUCTION OF HOUSE PROPERTY BY THE DVO AND THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE ITSELF WOULD BE RS. 88,945 / - WHICH IS APPROXIMATELY 7% OF THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE. SINCE THE VALUATION OF THE HOUSE PROPERTY HAS BEEN MADE BY THE DVO 4 ITA NOS. 487 & 488/JODH/2014 ON ESTIMATE BASIS , THE VARIATION AT 7% BETWEEN THE COST OF CONSTRUCTI ON ESTIMATED BY THE DVO AND THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE IN HER BOOKS OF ACCOUNTS IS NEGLIGIBLE AND NO ADDITION, IN OUR CONSIDERED VIEW, SHOULD BE MADE ON THE BASIS OF ESTIMATE MADE BY THE DVO, HENCE, WE DELETE THE ADDITION OF RS. RS. 65, 302/ - IN THE ASSESSMENT YEAR 2009 - 10 AND RS. 67,709/ - IN THE ASSESSMENT YEAR 2010 - 11 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CONSTRUCTION OF THE HOUSE PROPERTY AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE IN BOTH THE YEARS UNDER CONSIDERATION . 8. IN THE RESULT, APPEAL S OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , THE 08 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 08 TH MARCH , 201 6 . VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY I.T.A.T., JODHPUR .