Govind Singh (HUF), CHENNAI V. ITO, CHENNAI

ITA 489/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3968 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: N DEVANATHAN
• Keywords: Valuation report

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.489/MDS/2016 ' (' / ASSESSMENT YEAR : 2010-11 SHRI GOVIND SINGH (HUF), NO.216, DHANALAKSHMI COMPLEX, NSC BOSE ROAD, CHENNAI - 600 079. PAN : AABHG 7088 R V. THE INCOME TAX OFFICER, NON-CORPORATE WARD 4(4), CHENNAI - 600 006. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SH. N. DEVANATHAN, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 0 . 1$ / DATE OF HEARING : 03.10.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 23.11.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 5, CHENN AI, DATED 03.02.2016 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS COST OF CONSTRUCTION. THE ASSESSEE HAS ADMITTED THE COST O F CONSTRUCTION AT 2 I.T.A. NO.489/MDS/16 ` 22,00,000/-. HOWEVER, THE ASSESSING OFFICER DETERM INED THE COST OF CONSTRUCTION AT ` 41,82,000/-. IN FACT, THE DEPARTMENTAL VALUATION OFFICER ESTIMATED THE COST OF CONSTRUCTION BY HIS R EPORT DATED 30.03.2013. THE ASSESSING OFFICER WITHOUT GIVING A NY OPPORTUNITY TO THE ASSESSEE, PASSED THE IMPUGNED ASSESSMENT ORDER NEXT DAY, I.E. ON 31.03.2013. THE CIT(APPEALS) WITHOUT CONSIDERIN G THE FACTUAL ASPECTS, CONFIRMED THE ORDER OF THE ASSESSING OFFIC ER. ACCORDING TO THE LD. COUNSEL, REFERENCE TO VALUATION CELL ITSELF IS DEFECTIVE. THEREFORE, THE VALUATION REPORT CANNOT BE A BASIS F OR MAKING ANY ADDITION. MOREOVER, FOR VALUING THE COST OF CONSTR UCTION, ONLY STATE PWD RATES HAS TO BE TAKEN AND NOT CENTRAL PWD. APA RT FROM THAT, 10% ALLOWANCE HAS TO BE GIVEN FOR PURCHASING THE MA TERIAL BY THE ASSESSEE AND ANOTHER 10% FOR SELF-SUPERVISION. THE SE FACTORS NEED TO BE CONSIDERED BY THE ASSESSING OFFICER. THE CIT (APPEALS) HAS SIMPLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER WITHOUT CONSIDERING THE MATERIAL AVAILABLE ON RECORD. 3. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE DURING THE COURSE OF SURVEY OPERATION, CLAIMED THAT THE COST OF CONSTRUC TION WAS ` 22,00,000/-. HOWEVER, THE ASSESSING OFFICER REFERR ED THE MATTER TO THE VALUATION CELL UNDER SECTION 142A OF THE INCOME -TAX ACT, 1961 3 I.T.A. NO.489/MDS/16 (IN SHORT 'THE ACT'). THE VALUATION OFFICER BY HIS REPORT DATED 30.03.2013, DETERMINED THE VALUE OF CONSTRUCTION AT ` 41,82,000/-. THE DIFFERENCE IN THE COST WAS TAKEN AS UNDISCLOSED INCOME OF THE ASSESSEE. REFERRING TO THE ORDER OF THE ASSESSING OFFICER, THE LD. D.R. SUBMITTED THAT AN OPPORTUNITY WAS GIVEN TO THE ASSESSEE SUBSEQUENT TO RECEIPT OF VALUATION REPORT. THEREFO RE, ACCORDING TO THE LD. D.R., IT IS NOT CORRECT TO SAY THAT OPPORTU NITY WAS NOT GIVEN TO THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE DEPARTMENTAL VALUATION OFFICERS R EPORT ITSELF WAS DATED 30.03.2013. IT IS NOT KNOWN WHEN THE ASSESSI NG OFFICER RECEIVED THE VALUATION REPORT FROM THE DEPARTMENTAL VALUATION OFFICER. IF IT IS PRESUMED THAT THE VALUATION REPO RT WAS RECEIVED ON THE SAME DAY I.E. ON 30.03.2013, THIS TRIBUNAL IS O F THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAD NO OPPORTUNI TY TO GIVE A COPY OF THE VALUATION REPORT TO THE ASSESSEE TO GET HIS RESPONSE. IN SUCH CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE. MOREOVER, A STATEMENT WAS SAID TO BE RECORDED FROM THE ASSESSEE UNDER SURVEY PROCEEDING. IN VIEW OF THE ABOVE FACT UAL SITUATION, THIS 4 I.T.A. NO.489/MDS/16 TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSING OFFICER SHALL SERVE A COPY OF THE VALUATION REPORT TO THE ASSESSE E AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW. ACCORDINGL Y, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASS ESSING OFFICER SHALL RE-EXAMINE THE ISSUE AFRESH AFTER SERVING A C OPY OF THE VALUATION REPORT TO THE ASSESSEE. THE ASSESSING OF FICER SHALL GIVE SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO FILE THE OBJECTION TO THE VALUATION REPORT, INCLUDING THE VALIDITY OF REFEREN CE TO VALUATION CELL. THE ASSESSING OFFICER SHALL THEREAFTER CONSIDER THE OBJECTION OF THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LA W, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23 RD NOVEMBER, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 23 RD NOVEMBER, 2016. KRI. 5 I.T.A. NO.489/MDS/16 . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-5, CHENNAI 4. PRINCIPAL CIT-9, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.