ITO, Nurpur V. Kshatriya Education Society, Kangra

ITA 489/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63976 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J S BHASIN
• Assessee Lawyers: N K SAINI
• Section: 143(3); 133(6); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 489/CHD/2011 (ASSESSMENT YEARS : 2007-08) THE INCOME TAX OFFICER, VS. KSHATRIYA EDUCATION SOCIETY, NURPUR (HP). KATHGARH ROAD, VILL.NADAUN TEHSIL INDORA, DISTT. KANGRA (HP). PAN: AABTK0675Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.S.BHASIN RESPONDENT BY : SHRI N.K. SAINI, DR DATE OF HEARING : 18.9.2012 DATE OF PRONOUNCEMENT : 26.09.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), SHIMLA DATED 22.02.2011 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORD ER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ONLY GROUND OF APPEAL RAISED BY THE ASSESSEE IS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.37340/- ON ACCOUNT OF DIFFERENCE IN STATEMENT OF ACCOUNTS OF SUNDRY CREDI TORS AND RS.2951035/- ON CONSTRUCTION OF BUILDING ACCOUNT. 3. THE REVENUE IN THE PRESENT APPEAL HAS RAISED TWO ISSUES IN THE GROUNDS OF APPEAL. THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT (APPEALS) ON THE FOLLOWING ACCOUNTS: 2 A) DELETION OF ADDITION OF RS.37,340/- ON ACCOUNT O F DIFFERENCE IN THE COPY OF ACCOUNT OF THE SUNDRY CREDITORS. B) DELETION OF ADDITION OF RS.29,51,035/- ON THE CO NSTRUCTION OF BUILDING. 4. THE LEARNED A.R. FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE SECOND ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE B Y THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN SARGAM CINEMA VS. CIT [320 531 (SC)]. IN RESPECT OF FIRST ADDITION IN THE ACCOUNT OF SUND RY CREDITORS, IT IS POINTED OUT BY THE LEARNED A.R. FOR THE ASSESSEE TH AT THE SAME WAS EXPLAINABLE AND ACCOUNTS WITH THE SAID PARTY HAD BE EN SQUARED UP AT THE CLOSE OF THE YEAR. 5. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE CIT (APPEALS). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE HAD CALLED FOR THE INFORMATION UNDER SECTI ON 133(6) OF THE ACT IN RESPECT OF THE SUNDRY CREDITORS SHOWN BY THE ASS ESSEE. THE ASSESSEE HAD SHOWN THE BALANCE DUE TO M/S SUBHASH BROTHERS A T RS.1,10,539/- AND THE SAID PARTY HAD SHOWN RECEIVABLE AT RS.73,199/-. THERE WAS A DISCREPANCY/DIFFERENCE OF RS.37,340/- AS SHOWN IN T HE BOOKS OF ACCOUNT OF THE ASSESSEE, WHEN COMPARED WITH THE BOOKS OF AC COUNT OF THE SUNDRY CREDITOR. THE PLEA OF THE ASSESSEE BEFORE THE CIT (APPEALS) WAS THAT THE ENTIRE LIABILITY WAS SQUARED UP BY 31.3.2002 AND CO NSEQUENTLY NO ADDITION WAS WARRANTED. THE CIT (APPEALS) HAD DELE TED THE ADDITION WITHOUT REFERRING TO ANY EVIDENCE IN THIS REGARD. IN THE INTEREST OF JUSTICE WE DEEM IT FIT TO RESTORE THIS ISSUE BACK T O THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME DE-NOVO AFTER VERIFYING THE STAND OF THE ASSESSEE. REASONABLE OPPORTUNITY OF HEARING SH ALL BE AFFORDED TO THE ASSESSEE BY THE ASSESSING OFFICER. 3 7. THE SECOND ADDITION MADE IN THE HANDS OF THE ASS ESSEE WAS ON ACCOUNT OF COST OF CONSTRUCTION OF THE COLLEGE BUIL DING. THE ASSESSEE HAD DECLARED THE INVESTMENT IN THE SAID COST OF CON STRUCTION OF COLLEGE BUILDING AT RS.60,54,408/- IN ITS BOOKS OF ACCOUNT. THE ASSESSING OFFICER REFERRED THE PROPOSAL FOR ESTIMATING THE CO ST OF CONSTRUCTION OF THE SAID BUILDING TO THE DVO, WHO IN HIS REPORT DAT ED 24.12.2009 HAD ESTIMATED THE COST OF CONSTRUCTION AT RS.90,05,500/ -. THE ASSESSING OFFICER DID NOT REJECT THE BOOKS OF ACCOUNT OF THE ASSESSEE, HOWEVER, MADE AN ADDITION OF RS.29,51,095/-. THE CIT (APPE ALS) ALLOWED THE CLAIM OF THE ASSESSEE IN VIEW OF THE ASSESSING OFFI CER NOT FINDING ANY DEFECT IN THE BOOKS OF ACCOUNT AND NOT REJECTING TH E BUILDING ACCOUNT OF THE ASSESSEE. THE CIT (APPEALS) HAD HELD THAT THE MANDATORY PRE- REQUISITES UNDER SECTION 69 OF THE ACT WERE NOT FUL FILLED AND CONSEQUENTLY THE ASSESSING OFFICER WAS NOT JUSTIFIE D IN MAKING ADDITION IN VIEW OF VARIOUS JUDGMENTS AS NOTED UNDER PARA 6 OF THE APPELLATE ORDER. 8. WE FIND THAT THE PRESENT ISSUE STANDS COVERED BY THE ORDER OF THE HON'BLE SUPREME COURT OF INDIA IN SARGAM CINEMA VS. CIT (SUPRA) WHEREIN IT HAS BEEN HELD THAT BEFORE MAKING ANY REF ERENCE TO THE DVO, THE ASSESSING OFFICER WITHOUT REJECTING THE BOOKS O F ACCOUNT COULD NOT HAVE DONE SO. IN THE FACTS OF THE PRESENT CASE BEF ORE US THE REFERENCE IS MADE TO THE DVO BY THE ASSESSING OFFICER WITHOUT RE JECTING THE BOOKS OF ACCOUNT AND APPLYING THE RATIO LAID DOWN BY THE HON 'BLE SUPREME COURT IN SARGAM CINEMA VS. CIT (SUPRA) WE FIND MERIT IN T HE ORDER OF CIT (APPEALS). ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT (APPEALS) IN DELETING THE ADDITION OF RS.29,31,035/-. THUS, GRO UND NO.1 RAISED BY THE 4 REVENUE ON THE FIRST ADDITION IS ALLOWED FOR STATIS TICAL PURPOSES AND IN RESPECT OF SECOND ADDITION IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DAY OF SEPTEMBER, 2012. . SD/- SD/- (T.R. SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH SEPTEMBER, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH