The Income Tax Officer, Hoshiarpur V. M/s. Soni Rice Mills, Hoshiarpur

ITA 525/ASR/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68232 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 08-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: J S BHASIN
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO. 525(ASR)/2013 ASSESSMENT YEAR: 2007-08 PAN : ABGFS 0467 C THE INCOME TAX OFFICER VS. M/S SONI RICE MILLS, WARD-1, HOSHIARPUR VILL:- SHAHPUR, DISTT. HOSHIARPUR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. AMRIK CHAND, DR RESPONDENT BY: SH. J.S. BHASIN, ADVOCATE DATE OF HEARING: 18.11.2013 DATE OF PRONOUNCEMENT: 18.11.2013 ORDER PER BENCH ; THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER OF THE CIT(A), JALANDHAR, DATED 24.05.2013 FOR THE ASSESSMENT YEAR 2007-08 ON THE FOLLOWING GROUNDS: 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION MA DE BY AO AMOUNTING TO RS. 10,22,235/- ON THE ACCOUNT OF ALLE GED UNEXPLAINED I.T.A. NO. 525(ASR)/2013 ASSESSMENT YEAR: 2007-08 2 INVESTMENT IN THE CONSTRUCTION OF SHELLER BUILDING BEING DIFFERENCE IN COST BASED ON THE REPORT OF DVO. 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN ALLOWING THE RELIEF TO A SSESSEE WITH REGARD TO UNEXPLAINED INVESTMENT TO THE TUNE OF RS. 10,22, 235/- IN THE CONSTRUCTION OF SHELLER BUILDING WHEN THERE WAS NO EXPLANATION WAS OFFERED BY THE ASSESSEE IN THIS REGARD. 3. THAT, IT IS PRAYED THAT THE ORDER OF THE LD. CIT (A) BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 4. THAT THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AN D DISPOSED OFF. 2. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. CHAUHAN RESORTS REPORTED IN (2012) 76 DTR 0163 (P&H) ON THE BASIS O F HONBLE APEX COURTS DECISION IN THE CASE OF M/S SARGAM CINEMA V S. CIT REPORTED IN (2011) 241 CTR 179. HE FURTHER STATED THAT LEARNED CIT(A) HAS ALSO DELETED THE ADDITION IN DISPUTE ON THE BASIS OF DECISION OF HONBLE JURISDICTIONAL HIGH COURT AND REQUESTED THAT THE APPEAL FILED BY T HE DEPARTMENT MAY BE DISMISSED. 3. LEARNED DR RELIED UPON THE ORDER PASSED BY THE A SSESSING OFFICER. I.T.A. NO. 525(ASR)/2013 ASSESSMENT YEAR: 2007-08 3 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE IMPUGNED ORDER PA SSED BY THE LEARNED FIRST APPELLATE AUTHORITY, WHO HAS ADJUDICATED THE ISSUE IN DISPUTE IN PARAS NO. 6 & 7 (PAGES 6 TO 7) OF THE IMPUGNED ORDER. FOR THE S AKE OF CONVENIENCE, PARAS NO. 6 & 7 ARE REPRODUCED AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND THE SUBMISSIONS OF ASSESSEE. GROUND NO. 1 TO 3 RELATES TO THE ADDITION OF RS. 1 0,22,235/- (IN FACT IN THE ASSESSMENT ORDER AT ONE PLACE THE SAME IS MISTAKENLY MENTIONED AS RS. 11,22,235/-) MADE ON ACCOUNT OF VA LUATION OF BUILDING. IN THE WRITTEN SUBMISSIONS THE VERY BASIS OF THE REFERENCE MADE U/S 142 A OF I.T. ACT BY THE AO IS CHALLENGED ON THE GROUND THAT WITHOUT REJECTING THE BOOKS OF ACCOUNTS NO SUCH REF ERENCE COULD BE MADE IN VIEW OF THE DECISION OF HONBLE APEX COURT IN CASE OF M/S SARGAM CINEMA 241 CTR 179 AND ALSO IN THE CASE OF M /S CHAUHAN RESORTS BY HONBLE HIGH COURT OF PUNJAB, 76 DTR 163 , WHEREIN THE DECISION OF HONBLE APEX COURT IS FOLLOWED. 7. IN THE PRESENT CASE ALSO BOOKS OF ACCOUNTS WERE PRODUCED AND WERE DULY EXAMINED BY THE AO(VIDE ORDER SHEET NOTE DATED 21.12.09) BUT NEITHER ANY DEFECT WAS POINTED OUT NOR THE BOOK S OF ACCOUNTS WERE REJECTED. IN FACT, THE REFERENCE TO VALUATION CELL WAS MADE PRIOR TO THIS. IN VIEW OF THIS THE DECISION OF HONBLE APEX COURT AND HONBLE JURISDICTIONAL HIGH COURT ARE SQUARELY APPLICABLE A ND FOLLOWING THE SAME, THE REFERENCE MADE U/S 142A OF THE I.T. ACT W AS HELD TO BE NOT VALID. THE ADDITION OF RS. 10,22,235/- IS HEREBY DE LETED. GROUND NO. 2 AND 3 NEED NOT BE SEPARATELY DISCUSSE D IN VIEW OF THE DELETION OF THE ADDITION ON LEGAL GROUND ALONE. I.T.A. NO. 525(ASR)/2013 ASSESSMENT YEAR: 2007-08 4 GROUND NO. 4 RELATES TO DISALLOWANCE OF RS. 68,969 /- BY CAPITALIZING THE SAME. AS PER THE WRITTEN SUBMISSIO N THE DISALLOWANCE OF INTEREST FOR PRIOR PERIOD CAN ONLY BE MADE IN RE SPECT OF EXTENSION OF EXISTING BUSINESS AND NOT A NEW BUSINESS ALTOGETHER , IN VIEW OF PROVISO TO SECTION 36(1)(III) OF I.T. ACT WHICH REA DS AS UNDER (W.E.F. 01.04.04): [PROVIDED THAT ANY AMOUNT OF THE INTEREST PAID, IN RESPECT OF CAPITAL BORROWED FOR ACQUISITION OF AN A SSET FOR EXTENSION OF EXISTING BUSINESS OR PROFESSIONAL (WHE THER CAPITALIZED IN THE BOOKS OF ACCOUNT OR NOT); FOR AN Y PERIOD BEGINNING FROM THE DATE ON WHICH THE CAPITAL WAS BORROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUCH ASSET WAS FIRST PUT TO USE, SHALL NOT BE ALLOWED AS DEDUCTION.] 5. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT, WHICH IS ON THE BASIS OF THE DECISION OF HONBLE APEX COURT IN THE CASE O F M/S SARGAM CINEMA VS. CIT (SUPRA), WE ARE OF THE VIEW THAT IN THE PRE SENT CASE, THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNT OF TH E ASSESSEE AND MADE THE REFERENCE TO THE VALUATION CELL. IN VIEW OF THE DEC ISION OF HONBLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT REPORTED IN (2011) 241 CTR 179, WHICH HAS BEEN FOLLOWED BY HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT VS. CHAUHAN RESORTS REPORTED IN (2012) 76 DTR 0163 (P&H), THE ACT OF THE ASSESSING OFFICER IS INVALID. WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORD ER PASSED BY LEARNED FIRST I.T.A. NO. 525(ASR)/2013 ASSESSMENT YEAR: 2007-08 5 APPELLATE AUTHORITY. ACCORDINGLY, WE DISMISS THE AP PEAL FILED BY THE REVENUE AND UPHOLD THE ORDER DATED 24.05.2013 PASSE D BY LEARNED CIT(A), JALANDHAR. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER, 2013. SD/./ SD/./ (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH NOVEMBER, 2013 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S SONI RICE MILLS, VILL:- SHAHPUR, DISTT. HOSHIARPUR 2. THE ITO, WARD-1, HOSHIARPUR 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER