Sri BInu Zacharia, Thiruvalla V. DCIT, Trivandrum

ITA 491/COCH/2010

• Counselvise Citation: 49121914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 03-11-2011
• Assessment Year: 1994-1995
• Appeal Filed On: 30-08-2010
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: K K RAMACHANDRAN
• Keywords: Unexplained investment; Gift; Competent authority

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORESHRI N.R.S. GANESAN, JM I.T.A NO. 491 & 492/COCH/2010 ASSESSMENT YEARS: 1994-95 & 1995-96 SHRI BINU ZACHARIA, THURUTHIKKADU, MALLAPALLY P.O., THIRUVALLA. [PAN:AAEPZ 2528E] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, THIRUVALLA. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT ) ASSESSEE BY SHRI K.K.RAMACHANDRAN, CA REVENUE BY MS. S. VIJAYAPRABHA, JR. DR DATE OF HEARING 03/11/2011 DATE OF PRONOUNCEMENT 03/11/2011 O R D E R BOTH THE APPEALS ARE DIRECTED AGAINST THE COMMON O RDER OF THE CIT(A)-I, TRIVANDRUM DATED 5.11.2009 AND PERTAIN TO THE ASSES SMENT YEARS 1994-95 AND 1995-96. 2. THE FIRST ISSUE ARISING FOR CONSIDERATION IS THE VALUATION OF THE COST OF CONSTRUCTION OF THE BUILDING. SHRI K.K.RAMACHANDRAN, THE LD.CHA RTERED ACCOUNTANT-REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ONE OF CO-OWNERS ALONG WITH OTHERS. THE COST OF CONSTRUCTION WAS A SUBJECT MATTER OF APPEAL BEFO RE THIS TRIBUNAL IN THE CASE OF ONE OF THE CO-OWNER, SHRI T.O.ABRAHAM BUILDING. THIS TRIBU NAL DIRECTED THE ASSESSING OFFICER TO VALUE THE COST OF THE CONSTRUCTION OF THE BUILDI NG ON THE BASIS OF THE STATE PWD RATES. IN THE ASSESSEES OWN CASE, THE LD. REPRESENTATIVE SUBMITTED THAT THIS TRIBUNAL DIRECTED THE ASSESSING OFFICER TO ADOPT STATE PWD RATES TO C OMPUTE THE UNEXPLAINED INVESTMENT SUBJECT TO THE CONDITION THAT THE COST OF CONSTRUCT ION SHOULD NOT BE BELOW THE COST RETURNED I.T.A. NO. 491& 492/COCH/2010 2 BY THE ASSESSEE. THE LD. REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE COST OF CONSTRUCTION HAS TO BE COMPUTED ON THE BASIS OF THE PWD RATES. REFERRING TO THE ORDER OF THE AO, THE LD. REPRESENTATIVE FOR THE ASSESSEE SU BMITTED THAT THE AO HAS TAKEN THE AVERAGE VALUATION OF THE STATE PWD RATES AND THE CE NTRAL PWD RATES. ON A QUERY FROM THE BENCH, WHETHER THE VALUATION IN THE CASE OF SHR I T.O.ABRAHAM WHO IS ADMITTEDLY ALSO ONE OF THE CO-OWNERS WAS COMPLETED CONSEQUENT TO TH E ORDER OF THE TRIBUNAL, THE LD. REPRESENTATIVE SUBMITTED THAT IT IS STILL PENDING B EFORE THE ASSESSING OFFICER. 3. ON THE CONTRARY, MS. VIJAYAPRABHA, THE LD. DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT IN THE CASE OF SHRI T.O.ABRAHAM WHO IS ADMITTE DLY ONE OF THE CO-OWNERS OF THE VERY SAME BUILDING, FILED THE APPEAL BEFORE THIS TRIBUNA L AND THIS TRIBUNAL VIDE ORDER DATED 31.3.2000 DIRECTED THE ASSESSING OFFICER TO VALUE T HE COST OF CONSTRUCTION OF THE MULTI- STORIED BUILDING AT THE AVERAGE OF THE TWO VALUATIO NS, AS DONE BY THE DEPARTMENTAL VALUER AND THE ASSESSEES REGISTERED VALUER. THE LD. REP RESENTATIVE SUBMITTED THAT THE REFERENCE MADE IN THE TRIBUNAL ORDER IN THE CASE OF T.O.ABRAH AM REGARDING THE STATE PWD RATES IS ONLY A PASSING REFERENCE AND THERE IS NO SUCH DIREC TION TO FOLLOW THE STATE PWD RATES. THE LD. REPRESENTATIVE SUBMITTED THAT THE DIRECTION IN THE CASE OF SHRI T.O.ABRAHAM IS ONLY TO ADOPT AN AVERAGE VALUE OF THE TWO VALUATION S.. 4. RIVAL CONTENTIONS WERE CONSIDERED IN THE LIGHT O F THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS ADMITTEDLY ONE OF THE CO-OWNERS OF THE BUILDING. IN THE CASE OF THE OTHER CO-OWNER, SHRI T.O. ABRAHAM, THIS TRIBUNAL DIRECTED THE ASSESSING OFFICER TO ADOPT THE AVERAGE OF THE TWO VALUATIONS, AS DONE BY THE DEPAR TMENTAL VALUER AND THE VALUATION AS TAKEN BY THE ASSESSEES REGISTERED VALUER. IN THE ASSESSEES OWN CASE, THIS TRIBUNAL DIRECTED THE DEPARTMENT TO VALUE THE BUILDING ON TH E BASIS OF THE STATE PWD RATED AND COMPUTED THE UNEXPLAINED INVESTMENT SUBJECT TO THE CONDITION THAT THE FIGURE SHOULD NOT COME BELOW THE COST RETURNED BY THE ASSESSEE IN TH E RETURN OF INCOME. THE FACT REMAINS THAT THERE IS ONE MULTI-STORIED BUILDING WHICH BELO NGS TO 4 CO-OWNERS. THE ASSESSEE IS ALSO ONE OF THE CO-OWNERS. THE COST OF THE MULTI-S TORIED BUILDING CANNOT BE A DIFFERENT FIGURE FOR EACH CO-OWNER. IN OTHER WORDS, THE COST OF THE CONSTRUCTION OF THE BUILDING I.T.A. NO. 491& 492/COCH/2010 3 SHALL BE ONE FOR ALL THE CO-OWNERS, BUT IT MAY VARY DEPENDING ON THE SHARE OF EACH OF THE CO-OWNERS. THEREFORE, THE DEPARTMENTAL VALUER SHAL L VALUE THE BUILDING ON THE BASIS OF THE STATE PWD RATES AS DIRECTED BY THIS TRIBUNAL AS IN THE CASE OF ONE OF THE CO-OWNERS, SHRI T.O. ABRAHAM. IT IS ALSO OPEN TO THE ASSESSEE TO G ET THE VALUATION DONE FROM THE REGISTERED VALUER AND SUCH VALUATION CAN BE DONE ON THE BASIS OF THE STATE PWD RATES. IF THERE IS A DIFFERENCE BETWEEN THE DEPARTMENTAL VALU ER AND THE REGISTERED VALUER, AS DIRECTED BY THE TRIBUNAL IN THE CASE OF SHRI T.O. A BRAHAM, THE AVERAGE OF THE TWO VALUATIONS SHALL BE THE COST OF CONSTRUCTION OF THE BUILDING AND IT IS TO BE DISTRIBUTED TO THE CO-OWNERS ACCORDING TO THEIR RESPECTIVE SHARES. AC CORDINGLY, THIS MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESS ING OFFICER SHALL EXAMINE THE MATTER AFRESH AND COMPUTE THE COST OF THE CONSTRUCTION OF THE BUILDING AS PER THE DIRECTION OF THE DIVISION BENCH OF THIS TRIBUNAL IN THE ASSESSEES O WN CASE AND IN THE CASE OF THE CO- OWNER, SHRI T.O. ABRAHAM. 5. THE NEXT ISSUE IS WITH REGARD TO THE ADDITION OF ` 6 LAKHS AS UNEXPLAINED INVESTMENT. FOR BOTH THE ASSESSMENT YEARS, THE ASS ESSEE CLAIMED THAT HE HAS RECEIVED ` 6 LAKHS FROM SHRI K.C.JOSEPH, FATHER-IN-LAW OF THE AS SESSEE WHO HAPPENED TO BE A SUPERINTENDENT ENGINEER WORKING IN MADHYA PRADESH. ACCORDING TO THE LD. CHARTERED ACCOUNTANT-REPRESENTATIVE FOR THE ASSESSEE, SHRI K. C.JOSEPH RETIRED FROM THE MADHYA PRADESH GOVERNMENT AND HE GIFTED ` 6 LAKHS TO THE ASSESSEE FOR THE CONSRUCTION ON SEVE RAL OCCASIONS. HOWEVER, NO DOCUMENTARY EVIDENCE WAS FI LED AND THE AMOUNT WAS HANDED OVER BY CASH ON DIFFERENT OCCASIONS. 6. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTA TIVE SUBMITTED THAT NO EVIDENCE IS FILED BEFORE THE LOWER AUTHORITIES TO SHOW THAT SHR I K.C.JOSEPH, THE FATHER-IN-LAW OF THE ASSESSEE GIFTED ANY MONEY TO THE ASSESSEE. MOREOV ER, SHRI K.C. JOSEPH BEING A GOVT. EMPLOYEE OF THE MADHYA PRADESH GOVERNMENT OUGHT TO HAVE INTIMATED ABOUT THE GIFT OF ` 6 LAKHS TO THE COMPETENT AUTHORITY. UNFORTUNATELY, NO SUCH INTIMATION APPEARS TO HAVE BEEN MADE BY SHRI K.C. JOSEPH TO THE GOVERNMENT OF MADHYA PRADESH. THEREFORE, IF ANY GIFT IS MADE BY SHRI K.C. JOSEPH, THIS WAS A VIOLAT ION OF THE CONDUCT RULES. MOREOVER, I.T.A. NO. 491& 492/COCH/2010 4 THERE IS NO MATERIAL TO SUGGEST THAT ANY SUCH GIFT WAS MADE BY SHRI K.C. JOSEPH, THE FATHER-IN-LAW OF THE ASSESSEE. 7. RIVAL CONTENTIONS WERE CONSIDERED IN THE LIGHT O F THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, SHRI K.C.JOSEPH, THE FATHER-IN-LAW OF T HE ASSESSEE BEING AN EMPLOYEE OF THE MADHYA PRADESH GOVERNMENT, MIGHT HAVE SOME MATERIAL TO PROVE THE POSSESSION OF THE AMOUNT GIFTED OR THE SOURCE FROM WHERE HE GOT THE M ONEY. UNFORTUNATELY, NO SUCH MATERIAL HAS BEEN BROUGHT ON RECORD EITHER BEFORE T HE ASSESSING OFFICER OR THIS TRIBUNAL AND CONVENIENTLY, THE ASSESSEE IS CLAIMING THAT HE RECEIVED THE MONEY BY CASH ON DIFFERENT OCCASIONS. IN THE ABSENCE OF ANY SUCH MA TERIAL, THIS TRIBUNAL HAS NO HESITATION IN UPHOLDING THE ORDER OF THE LOWER AUTHORITIES. 8. IN THE RESULT, BOTH THE ASSESSEES APPEALS ARE P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS DAY OF 3 RD NOVEMBER, 2011. SD/- (N.R.S.GANESAN) JUDICIAL MEMBER PLACE: ERNAKULAM DATED: 3RD NOVEMBER, 2011 GJ COPY TO: 1. SHRI BINU ZACHARIA, THURUTHIKKADU, MALLAPALLY P. O., THIRUVALLA. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, THIRUVALLA. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIV ANDRUM 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .