TRIPUTI COTTAGE, Jaipur V. ITO, BEHROR

ITA 496/JPR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3556 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 07-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA J CIT DHK
• Keywords: Value adopted by valuation officer; Valuation report; Tax effect
• Section: 143(3); 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 01/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 CUKE VS. INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 179/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. CUKE VS. M/S TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 495/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2009-10 TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 CUKE VS. INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 614/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. CUKE VS. M/S TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 2 VK;DJ VIHY LA-@ ITA NO. 496/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 CUKE VS. INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 615/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. CUKE VS. M/S TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 497/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 CUKE VS. INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 616/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. CUKE VS. M/S TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 711/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 TIRUPATI COTTAGE, N.H. 8, VILLAGE SANGTERA, KOTPUTLI- 303108 CUKE VS. INCOME TAX OFFICER, WARD-BEHROR, BEHROR- 301701, DISTT- ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFT 9922 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 3 FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA(ADV)& SHRI HEMANG GARGIEYA (ADV) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA JHA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07/08/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 21/08/2018 VKNS'K@ ORDER PER: BENCH THESE ARE FOUR SET OF CROSS APPEALS BY THE ASSESSE E AND THE REVENUE FOR THE A.YS. 2008-09 TO 2011-12 AND AN APPEAL BY T HE ASSESSEE FOR THE A.Y. 2012-13 DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE LD. CIT(A), ALWAR DATED 18/12/2016, 11/05/2017 AND 23/08/2017 RE SPECTIVELY. 2. ALL THE APPEALS ARE BEING HEARING TOGETHER AND F OR THE SAKE OF CONVENIENCE, A COMMON ORDER IS BEING PASSED. 3. GROUNDS RAISED BY THE ASSESSEE AS WELL AS THE REV ENUE IN CROSS APPEALS FOR THE A.Y. 2008-09 TO 2011-12 ARE COMMON, THUS, THE GROUNDS RAISED IN THE CROSS APPEALS FOR THE A.Y. 2009-10 AR E REPRODUCED AS UNDER: GROUND OF ASSESSEES APPEAL: 1. THE A.O. HAS ERRED IN INITIATING THE REASSESSME NT PROCEEDINGS U/S 147 & 148 AND CIT(A) HAS ERRED IN CONFIRMING THE AC TION OF A.O. 2. THE A.O. HAS ERRED IN MAKING ADDITION OF RS. 1,6 8,10,437/- ON ACCOUNT OF DIFFERENCE IN VALUATION OF INVESTMENT AN D CIT(A) HAS ERRED IN RESTRICTING THE SAID ADDITION UP TO RS. 10 ,00,000/- OUT OF TOTAL ADDITION OF RS. 1,68,10,437/-. GROUND OF REVENUES APPEAL: 1. THAT THE LD. CIT(A), ALWAR HAS ERRED ON THE FAC TS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING THE ADDITI ON OF RS. ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 4 1,68,10,437/- TO RS. 10,00,000/- WHICH WAS MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION O F HOTEL ON THE BASIS OF DVOS REPORT. 4. THE ASSESSEE IS A FIRM DERIVING INCOME FROM HOTEL AND RESTAURANTS IN THE NAME AND STYLE OF M/S TIRUPATI COTTAGE. IN THE R EASSESSMENT COMPLETED BY THE ASSESSING OFFICER U/S 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), THE ASS ESSING OFFICER MADE ADDITION ON ACCOUNT OF COST OF CONSTRUCTION/INVESTM ENT ON THE BASIS OF VALUATION DETERMINED BY THE DVO ESTIMATING THE COST OF CONSTRUCTION OF HOTEL BUILDING. 5. THE ASSESSEE CHALLENGED THE ADDITION MADE BY THE ASSESSING OFFICER BEFORE THE LD. CIT(A) AND ALSO CHALLENGED THE VALIDI TY OF REOPENING OF THE ASSESSMENT. THE LD. CIT(A) WHILE PASSING THE IMPUGNED ORDERS HAS ACCEPTED THE CLAIM OF THE ASSESSEE THAT ESTIMATION COST OF CONSTRUCTION SHOULD BE DETERMINED BY APPLYING STATE PWD RATES AS AGAINST CPWD RATES APPLIED BY THE DVO. THUS, THE LD CIT(A) HAS GRANTED S UBSTANTIAL RELIEF TO THE ASSESSEE AND RESTRICTED THE ADDITION MADE BY TH E ASSESSING OFFICER. THUS, BOTH THE ASSESSEE AND THE REVENUE HAVE CHALLEN GED THE ORDERS OF THE LD. CIT(A) ON THE ISSUE OF COST OF CONSTRUCTION DETERMINED BY THE DVO WHICH IS RESTRICTED BY THE LD. CIT(A) BY APPLYING THE PWD RATES. THE ASSESSEE HAS ALSO RAISED GROUND OF VALIDITY OF REOP ENING IN THE A.Y. 2009- 10 TO 2011-12 BUT NOT RAISED SUCH ISSUE IN THE A.Y. 2008-09. ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 5 6. WE HAVE HEARD THE LD AR AS WELL AS THE DR AND CON SIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR OF THE ASSESS EE HAS RELIED UPON THE VARIOUS DECISIONS ON THE POINT OF APPLICABILITY OF STATE PWD RATES FOR DETERMINATION OF COST OF CONSTRUCTION IN RESPECT OF A BUILDING FALLING IN THE JURISDICTION OF STATE PWD. HE HAS RELIED UPON THE F OLLOWING DECISIONS: (I) GOPAL KUMAR DEEWAN VS. ITO, ITA NO. 498& 499, 6 17 & 618, 02, 178/JP/2017. (II) CIT VS. SUNITA MANSINGHA (2017) 295 CTR 0590 ( SC) (III) M/S GANPATI PLAZA VS. ITO IN ITA NO. 466 & 46 7/JP/2016 VIDE ORDER DATED 16/2/2018. 7. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE DVO HAS DETERMINED THE COST OF CONSTRUCTION BY CONSIDERING ALL THE RELEVANT FACTS AS WELL AS EVIDENCE. FURTHER THE ASSESSEE HAS NOT MAINT AINED SEPARATE BOOKS OF ACCOUNT FOR THE COST OF CONSTRUCTION OF THE HOTE L BUILDING IN QUESTION AND THEREFORE, THE DVO HAS ESTIMATED THE COST OF CONSTR UCTION BASED ON CPWD RATES WHICH IS JUSTIFIED. HE HAS RELIED UPON THE ORD ER OF THE ASSESSING OFFICER. 8. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S THE RELEVANT MATERIAL ON THE RECORD AT THE OUTSET WE NOTE THAT TH E ASSESSEE HAS DECLARED COST OF INVESTMENT FOR THE A.Y. 2008-09 TO 2011-12, WHICH IS ABOUT 1.11 CRORES TO 1.75 CRORES YEAR WISE. THIS COST OF INVESTMENT DECLARED BY THE ASSESSEE WAS NOT ACCEPTED BY THE ASS ESSING OFFICER FOR ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 6 WANT OF NECESSARY RECORD AND EVIDENCE AND FURTHER TH E ASSESSEE HAS NOT MAINTAINED PROPER ACCOUNTS OF EXPENDITURE. ACCORDIN GLY, THE ASSESSING OFFICER REFERRED THE ISSUE OF ESTIMATION OF COST OF CONSTRUCTION TO THE DVO. AFTER RECEIVING THE VALUATION DETERMINED BY THE DVO IN ITS REPORT, THE ASSESSING OFFICER MADE ADDITION OF DIFFERENTIAL AMO UNT ON ACCOUNT OF COST OF CONSTRUCTION. THE SAID ADDITION MADE BY THE ASSES SING OFFICER WAS CHALLENGED BEFORE THE LD. CIT(A) BY THE ASSESSEE AND CONTENDED THAT THE DVO WHILE DETERMINING THE COST OF CONSTRUCTION HAS APPLIED CPWD RATES INSTEAD OF STATE PWD RATES. THE LD. CIT(A) HAS ACCE PTED THE CONTENTION OF THE ASSESSEE THAT THE CPWD RATES ARE APPLICABLE IN RESPECT OF BUILDING IN QUESTION AS AGAINST CPWD RATES APPLIED BY THE DVO. THE YEAR WISE COST OF INVESTMENT DECLARED BY THE ASSESSEE, THE COST OF CO NSTRUCTION DETERMINED BY THE DVO AND ADDITION MADE BY THE ASSESSING OFFIC ER WHICH WAS RESTRICTED BY THE LD. CIT(A) ARE AS UNDER: A.Y. COST OF INVESTMENT DECLARED BY ASSESSEE ESTIMATED BY DVO DIFFERENCE ADDITION SUSTAINED BY CIT(A) 2008-09 1,11,61,321/- 2,28,65,791/- 1,17,04,470/- 7 ,00,000/- 2009-10 1,60,30,344/- 3,28,40,781/- 1,68,10,437/- 1 0,00,000/- 2010-11 1,75,11,795/- 3,58,75,775/- 1,83,63,980/- 1 1,00,000/- 2011-12 1,08,43,040/- 2,22,13,740/- 1,13,70,700/- 6 ,00,000/- THUS, THE LD. CIT(A) HAS GRANTED SUBSTANTIAL RELIEF O N THIS ISSUE AND HELD THAT STATE PWD RATES ARE APPLICATION FOR DETERMINAT ION OF COST OF CONSTRUCTION AS AGAINST CPWD RATES APPLIED BY THE D VO. WE FURTHER NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 7 THIS TRIBUNAL IN THE CASE OF GOPAL KUMAR DEEWAN VS. ITO (SUPRA). IN PARA 12 OF THE ORDER, THE COORDINATE BENCH HAS HELD AS U NDER: 12. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. WE HAVE ALSO CONS IDERED THE CASE LAWS RELIED UPON BY THE LD AR. AFTER HEARING BOTH THE SI DES WE FIND THAT THE LD. CIT(A) HAS RIGHTLY HELD THAT THE STATE PWD RATES HA VE TO BE APPLIED TO THE PLINTH AREA OF CONSTRUCTION OF EACH FLOOR. THE LD. CIT(A) HAS ALSO HELD THAT THE ASSESSEE HAS SHOWN COST OF CONSTRUCTION IN THE BOOKS OF ACCOUNT, WHICH IS ALMOST ADHERE TO THE VALUATION DONE AS PER THE STATE PWD RATES. HOWEVER, HE HAS SUSTAINED THE AD HOC DISALLOWANCE O F RS. 4.00 LACS FOR THE A.Y. 2011-12 AND 2013-14 AND RS. 8.00 LACS FOR THE A.Y. 2012-13 FOR THE REASON THAT COMPLETE SET OF BILLS AND VOUCHERS FOR THE MATERIAL PURCHASED FOR CONSTRUCTION OF HOTEL WERE NOT AVAILA BLE. IN OUR VIEW, ONCE HE HAS GIVEN FINDING THAT THE STATE PWD RATE HAS TO BE APPLIED TO ESTIMATE THE COST OF CONSTRUCTION AND HE HAS ALSO G IVEN A FINDING THAT COST OF CONSTRUCTION IN THE BOOKS OF ACCOUNT ALMOST ADHE RE TO THE VALUATION DONE AS PER STATE PWD RATE THEN THERE IS NO JUSTIFI CATION IN SUSTAINING SUCH AD HOC DISALLOWANCES. ONCE THE ESTIMATE HAS BE EN MADE ON THE STATE PWD RATES THEN IN ABSENCE OF COMPLETE SET OF BILLS AND VOUCHERS FOR THE MATERIAL, NO SUCH DISALLOWANCE IS JUSTIFIED. HE NCE, WE DIRECT TO DELETE THE SAME. IN THE RESULT, GROUND NO. 2 OF ALL THESE THREE APPEALS ARE ALLOWED AND GROUND RAISED BY THE REVENUE IN THESE Y EARS IS DISMISSED. WE NOTE THAT THE COORDINATE BENCH OF THIS TRIBUNAL W HILE DECIDING THIS ISSUE HAS FOLLOWED THE DECISION OF HON'BLE SUPREME C OURT IN THE CASE OF CIT VS. SUNITA MANSINGHA (SUPRA) AS WELL AS VARIOUS O THER DECISIONS INCLUDING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN THE CASE OF CIT VS. HOTEL JOSHI (242 ITR 478). IN ABSENCE OF AN Y CONTRARY PRECEDENT BROUGHT TO OUR NOTICE, WE FOLLOW THE EARLIER DECISION OF THIS TRIBUNAL AND ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 8 HOLD THAT THE LD. CIT(A) HAS RIGHTLY APPLIED STATE PWD RATES FOR ESTIMATION OF COST OF CONSTRUCTION OF HOTEL BUILDING, WHICH IS SITUATED IN THE JURISDICTION OF THE STATE PWD. ACCORDINGLY, TO THAT EXTENT, THE ORDER OF THE LD. CIT(A) IS UPHELD. HOWEVER, THE LD. CIT(A) HAS SUSTAINED THE ADD ITIONS OF LUMP SUM AMOUNT VARYING FROM RS. 6.00 LACS TO RS. 11.00 LACS FOR EACH YEAR ON AD HOC BASIS. IT IS PERTINENT TO NOTE THAT ONCE THE CO ST OF CONSTRUCTION IS ESTIMATED ON THE BASIS OF VALUATION DETERMINED BY A PPLYING PWD RATES THEN MAKING AN AD HOC ADDITION FOR WANT OF BILLS AND VOUCHERS IS NOT JUSTIFIED AND CALLED FOR. THE ASSESSEE HAS ALSO FILE D CROSS APPEALS AND RAISED THIS ISSUE REGARDING THE ADDITION SUSTAINED BY THE LD. CIT(A). THOUGH THE COST OF CONSTRUCTION HAS TO BE DETERMINED BY APPLYING THE STATE PWD RATES, HOWEVER, IT IS NOT CLEAR FROM THE V ALUATION REPORT OF THE ASSESSEE THAT THE SAME IS PREPARED BY APPLYING THE STATE PWD RATES. THEREFORE, ONLY FOR LIMITED PURPOSE AND DETERMINING THE COST OF CONSTRUCTION BY APPLYING STATE PWD STATES AND THEN COMPARED THE SAME WITH THE COST OF CONSTRUCTION CLAIMED BY THE ASSESSE E, WE REMIT THIS ISSUE TO THE RECORD OF THE ASSESSING OFFICER. IN CASE WHER E THE COST OF CONSTRUCTION ARRIVED BY APPLYING THE STATE PWD RATE S IS MORE THAN THE COST OF CONSTRUCTION CLAIMED BY THE ASSESSEE, AN ADDITIO N CAN BE MADE. HENCE THE ASSESSING OFFICER HAS TO DO THE NECESSARY EXERC ISE AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 9 9. AS REGARDS THE ASSESSEES GROUND CHALLENGING THE REOPENING OF THE ASSESSMENT, WE NOTE THAT THE COORDINATE BENCH OF THI S TRIBUNAL IN THE CASE OF GOPAL KUMAR DEEWAN VS. ITO (SUPRA) HAS ALSO CONSID ERED THIS ISSUE IN PARA 8 AS UNDER: 8. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. WE HAVE ALSO CONSIDERED TH E CASE LAWS RELIED UPON BY THE LD. AR OF THE ASSESSEE. IN THIS CASE, T HE ASSESSEE WAS ENGAGED IN THE BUSINESS OF RUNNING HOTEL AND RESTAU RANTS. DURING THE ASSESSMENT PROCEEDINGS, FOR THE A.Y. 2012-13, THE A SSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SHOWN AMOUNT OF RS. 1,66,58,798/- UNDER THE HEAD NEW BUILDING WORK IN PROGRESS IN THE SCHEDULE OF FIXED ASSET IN ITS BALANCE SHEET. THE ASSESSING OFFICER A SKED TO FURNISH THE HEAD WISE DETAILS OF COST OF CONSTRUCTION INCURRED ON THE HOTEL BUILDING ALONGWITH SUPPORTING BILLS AND VOUCHERS FAILING WHI CH THE ASSESSING OFFICER MADE A REFERENCE U/S 142A OF THE ACT TO THE DVO OF I.T. DEPARTMENT, JAIPUR ON 17/11/2014 AND THE DVO REPORT WAS RECEIVED BACK IN HIS OFFICE ON 03/3/2015. THE DVO HAS ESTIMATED T HE COST OF INVESTMENT AS UNDER: F.Y. COST OF INVESTMENT DECLARED BY THE ASSESSEE ESTIMATED BY THE DVO DIFFERENCE 2010-11 3785819 7711916 3926097 2011-12 11865730 24171129 12305399 2012-13 5351136 14974659 9623523 2013-14 5044489 10276302 5231613 2014-15 5584435 11375794 5791359 THE ASSESSING OFFICER AFTER GIVING OPPORTUNITY TO T HE ASSESSEE MADE ADDITION OF RS. 1,23,05,399/- AND FINALIZED THE ORD ER U/S 143(3) OF THE ACT ON 25/3/2015. THEREAFTER HE HAS ISSUED NOTICES U/S 148 OF THE ACT FOR THE A.Y. 2011-12 AND 2013-14 ON 09/6/2015. THUS, THE AS SESSING OFFICER HAS APPLIED HIS MIND ON THE VALUATION REPORT AND HAS MA DE BASIS FOR MAKING ASSESSMENT FOR THE A.Y. 2012-13. THEREAFTER, THE RE ASONS HAS BEEN RECORDED AND ISSUED NOTICE U/S 148 OF THE ACT. IN S UCH A SITUATION, THE ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 10 RATIO LAID DOWN IN THE CASE LAWS RELIED UPON BY THE LD AR DOES NOT APPLY TO THE ASSESSEES CASE AS IN THESE CASES THE REOPEN ING WAS BASED ONLY ON THE BASIS OF VALUATION REPORT AND NOTHING ELSE. HEN CE, THIS GROUND OF ASSESSEES APPEAL FOR THE A.Y. 2011-12 AND 2013-14 HAS NO MERIT AND THE SAME STAND DISMISSED. THE FACTS AND CIRCUMSTANCES IN THE CASE OF GOPAL KUM AR DEEWAN VS. ITO (SUPRA) AS WELL AS IN THE CASE OF ASSESSEE ARE IDENT ICAL ON THE BASIS OF WHICH THE ASSESSING OFFICER HAS REOPENED THE ASSESSM ENT FOR THE A.YS. 2009-10 TO 2011-12. WE FURTHER NOTE THAT THE REOPE NING IS NOT MERELY BASED ON THE REPORT OF THE DVO BUT PRIOR TO THE NOT ICE ISSUED U/S 148 OF THE ACT, THE ASSESSMENT FOR THE A.Y. 2012-13 WAS PAS SED U/S 143(3) WHEREIN THE ASSESSING OFFICER CONDUCTED INQUIRY ON T HE ISSUE. THEREFORE, THE ASSESSMENT FOR THE A.Y. 2009-10 TO 2011-12 WERE REOPENED ON THE BASIS OF THE FINDINGS OF THE ASSESSING OFFICER IN T HE ASSESSMENT FOR THE A.Y. 2012-13. ACCORDINGLY, FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL, WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THE GROUND RAISE D BY THE ASSESSEE AGAINST THE REOPENING OF THE ASSESSMENT. HENCE, THE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS THE REVENUE FOR THE A.Y. 200 8-09 TO 2011-12 ARE PARTLY ALLOWED. 10. IN THE APPEAL FOR THE A.Y. 2012-13, THE ASSESSE E HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE A.O. HAS ERRED IN MAKING TRADING ADDITION OF RS. 1,00,000/- AND THE CIT(A) HAS ERRED IN CONFIRMING THE SAME. ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 11 2. THE A.O. HAS ERRED IN MAKING ADDITION OF RS. 22, 36,684/- ON ACCOUNT OF DIFFERENCE IN VALUATION OF INVESTMENT IN BUILDING A ND CIT(A) HAS ERRED IN RESTRICTING THE SAID ADDITION UP TO RS. 1,50,000/- OUT OF TOTAL ADDITION OF RS. 22,36,684/-. 11. AT THE TIME OF HEARING, THE LD AR OF THE ASSESS EE HAD STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROUND NO. 1 OF TH E APPEAL, THE SAME MAY BE DISMISSED AS NOT PRESSED. 12. THE LD. DR HAS RAISED NO OBJECTION IF THE GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED AS NOT PRESSED. ACCO RDINGLY, GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED BEING NOT PRE SSED. 13. GROUND NO. 2 OF THE ASSESSEES APPEAL IS REGARD ING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERE NCE IN THE VALUATION OF INVESTMENT IN BUILDING BASED ON DVOS REPORT WHICH WA S RESTRICTED BY THE LD. CIT(A) TO RS. 1.50 LACS. THE REVENUE HAS NOT CHAL LENGED THE ORDER OF LD. CIT(A) BECAUSE OF LOW TAX EFFECT AND THE ASSESSEE HAS CHALLENGED THE AD HOC DISALLOWANCE SUSTAINED BY THE LD. CIT(A). IN VIEW OF OUT FINDING ON THIS ISSUE FOR THE A.Y. 2008-09 TO 2011-12, THIS GROUND OF ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, APPEALS OF THE ASSESSEE FOR THE A.Y. 2008-09 TO 2012- 13 ARE PARTLY ALLOWED AND THE APPEALS OF THE REVENUE FOR THE A.Y. 2008-09 TO 2011-12 ARE ALSO PARTLY ALLOWED. ITA 01/JP/2017 & 179/JP/2017 WITH 3 ORS. CROSS APPEALS_M/S TIRUPATI COTTAGE VS ITO 12 ORDER PRONOUNCED IN THE OPEN COURT ON 21/08/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 ST AUGUST, 2018. *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- TIRUPATI COTTAGE, KOTPUTLI. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-BEHROR, BEHROR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 01,495,496, 497 & 711/JP/2017 & 179, 614, 615 & 616/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR