THE ACIT-2(1), Indore V. M/S. HARSHDEEP REAL ESTATE PVT. LTD., Indore

ITA 562/IND/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5654 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 21-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Valuation report
• Section: 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ACIT, 2(1), INDORE PAN: AAAACH4126M VS. M/S. HARSHDEEP REAL ESTATE PRIVATE LIMITED, 182,G.H. SCHEME NO.52, VIJAY NAGAR, INDORE. APPELLANT RESPONDENT APPELLANT BY SHRI MOHD.JAVED, SR. DR RESPONDENT BY NONE DATE OF HEARING 27.07.2016 DATE OF PRONOUNCEMENT 27.07.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, INDORE [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 09.03.2015 AND PER TAINS TO ASSESSMENT YEAR 2010-11 AS AGAINST APPEAL DECIDED I N ASSESSMENT ORDER DATED 28.03.2013 OF ITO, WARD 5(3) INDORE [HEREINAFTER REFERRED TO AS THE AO]. I.T.A. NO.562/IND/2015 ASSESSMENT YEAR: 2010-11 ACIT,2(1), INDORE VS. M/S. HARSHDEEP REAL ESTATE PR IVATE LIMITED, INDORE. I.T.A.NO. 562/IND/2015 A.Y . 2010-11 PAGE 2 OF 7 2 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIA(A) ERRED, THE CIT(A) HAS :- (I) ERRED IN DELETING THE ADDITION OF RS. 45,30,799/- WITHOUT APPRECIATING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE AS FAR AS REFERENCE TO THE DVO IS CONCERNED FOR VALUATION OF UNDISCLOSED INVESTMENT. (II) ERRED IN DELETING THE ADDITION OF RS. 45,30,799/- WITHOUT APPRECIATING THE VERY FACTS THAT THE MATTER REFERRED TO THE DVO DURING THE COURSE OF SURVEY PROCEEDINGS AND NOT IN VIEW OF PROVISIONS OF SECTION 142A OF INCOME-TAX ACT, 1961. AS HELD BY THE LD. CIT(A) IN HIS IMPUGNED ORDER. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 06.12.2010 DECLA RING TOTAL INCOME AT RS. NIL. A SURVEY U/S 133A OF THE ACT WA S ACIT,2(1), INDORE VS. M/S. HARSHDEEP REAL ESTATE PR IVATE LIMITED, INDORE. I.T.A.NO. 562/IND/2015 A.Y . 2010-11 PAGE 3 OF 7 3 CONDUCTED AT THE PREMISES OF THE COMPANY AND ITS PR OPERTY GOLDEN GATE RESTAURANT SITUATED AT PLOT NO. 2AF & AF, SCHEME NO. 54, VIJAY NAGAR, INDORE. THE PROPERTY WAS UNDER CONSTRUCTION AT THE TIME OF SURVEY AND THE SAME WAS REFERRED TO DISTRICT VALUATION OFFICER, INDORE FOR VALUATION . THE DVO VALUED THE INVESTMENT IN THE CONSTRUCTION OF SAID P ROPERTY GOLDEN GATE RESTAURANT AT RS. 1,41,88,890/- FOR ASS ESSMENT YEAR 2010-11, WHEREAS THE ASSESSEE HAS CLAIMED TO H AVE INVESTED RS. 96,58,091/- FOR THE SAME PERIOD. THUS, THERE WAS A DIFFERENCE OF RS. 45,30,799/-. ACCORDINGLY, THE S AME WAS ADDED AS UNDISCLOSED INVESTMENT IN THE CONSTRUCTION OF PROPERTY. 4. IN THE APPEAL BEFORE THE CIT(A), IT WAS OBSERVED THA T THE AO REFERRED THE HOTEL FOR VALUATION FOR COST O F CONSTRUCTION TO DVO, WITHOUT SPECIFYING ANY ADVERSE FINDING DURIN G SURVEY REGARDING COST OF CONSTRUCTION AND WITHOUT REJECTING BOOKS OF ACCOUNTS OF THE ASSESSEE EVEN WHEN THE ASSESSEES B OOKS OF ACCOUNTS WERE AUDITED AND BILLS & VOUCHERS FOR HOTE L CONSTRUCTION WERE MAINTAINED. WITHOUT REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE, WITHOUT FINDING ANY DEFECT S IN ACIT,2(1), INDORE VS. M/S. HARSHDEEP REAL ESTATE PR IVATE LIMITED, INDORE. I.T.A.NO. 562/IND/2015 A.Y . 2010-11 PAGE 4 OF 7 4 BILLS/VOUCHERS OF CONSTRUCTION/RENOVATION OF HOTEL AND EVEN WITHOUT DETECTION OF ANY EVIDENCE DURING SURVEY REGA RDING SUPPRESSION ,OF COST OF CONSTRUCTION OF HOTEL, SUCH REFERENCE BY AO TO DVO WAS NOT TENABLE IN LAW, AS HELD IN THE DECI SIONS IN CASES OF SARGAM CINEMA ( S. C.) 328 ITR 513, LAKSHM I CONSTRUCTIONS, (2014) 369 ITR 271 ( AP & TELANGANA) AND INDUS TECHNICAL EDUCATION SOCIETY, (2015) 55 TAXMAN N.COM 188 (ALLAHABAD). IN CASE OF M/S. GOODLUCK AUTOMOBIL ES P.LTD. (GUJ) 359 ITR 306, IT WAS HELD THAT ON A CONJOINT RE ADING OF PROVISIONS OF SECTION 69 & SECTION 142A OF THE I.T. ACT, FOR THE PURPOSE OF RESTORING TO THE PROVISIONS OF SECTION 1 42A OF THE I. T. ACT, AO WOULD FIRST BE REQUIRED TO RECORD SATISF ACTION THAT ASSESSEE HAS MADE INVESTMENT WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS. HAVING NOT RECORDED ANY SUCH SAT ISFACTION, THE REFERENCE TO DVO FOR VALUATION OF CONSTRUCTION OF HOTEL, CANNOT BE SUSTAINED. AS A RESULT GROUND. NO.1 & 2 O F APPEAL ARE ALLOWED ON THE BASIS OF SUCH LEGAL ARGUMENT, AL ONE, WITHOUT GOING INTO DEFECTS IN VALUATION POINTED OUT BY THE ASSESSEE. ACIT,2(1), INDORE VS. M/S. HARSHDEEP REAL ESTATE PR IVATE LIMITED, INDORE. I.T.A.NO. 562/IND/2015 A.Y . 2010-11 PAGE 5 OF 7 5 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE COST OF CONSTRUCTION WAS ESTIMAT ED BY THE VALUATION OFFICER, WHO IS A TECHNICAL PERSON, WHEREAS THE ASSESSEE HAS SHOWN LESSER AMOUNT OF INVESTMENT. THER EFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADD ITION IGNORING THE VALUATION REPORT. 6. NO BODY APPEARED ON BEHALF OF THE ASSESSEE. 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND HAVE PERUSED THE MATERIAL ON RECORD AND THE FIN DINGS OF THE CIT(A). THE FACTS THAT REFERENCE TO THE VALUATI ON WAS MADE WITHOUT SPECIFYING ANY ADVERSE FINDING DURING THE CO URSE OF SURVEY REGARDING COST OF CONSTRUCTION AND WITHOUT RE JECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE IS NOT NEGATED BY THE LD. DEPARTMENTAL REPRESENTATIVE . THE LD. CIT(A) HAS PL ACED RELIANCE ON THE DECISIONS OF SARGAM CINEMA ( S. C. ) 328 ITR 513, AND LAKSHMI CONSTRUCTIONS, (2014) 369 ITR 271 ( AP & TELANGANA) AND OTHERS, WHEREIN IT WAS HELD THAT ON CO NJOINT READING OF THE PROVISIONS OF SECTION 69 & 142A OF T HE ACT THAT FOR THE PURPOSE OF INVOKING PROVISIONS OF SECTION 1 42A, THE AO WOULD FIRST REQUIRED TO RECORD SATISFACTION THAT THE ASSESSEE ACIT,2(1), INDORE VS. M/S. HARSHDEEP REAL ESTATE PR IVATE LIMITED, INDORE. I.T.A.NO. 562/IND/2015 A.Y . 2010-11 PAGE 6 OF 7 6 HAS MADE INVESTMENT WHICH ARE NOT RECORDED IN THE BO OKS OF ACCOUNTS. CONSIDERING THESE FACTS, WE ARE NOT INCLIN ED TO INTERFERE WITH THE FINDING OF THE LD. CIT(A). ACCORD INGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THE ORDER HAS BEEN PRONOUNCED IN OPEN CO URT ON THE 27TH JULY, 2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED :27TH JULY, 2016. CPU* COPY OF THE ORDER FORWARDED TO : THE ASSESSEE/ PCIT- INDORE/ CIT(A)-I, INDORE, AO/ D R- INDORE BENCH/ GUARD FILE BY ORDER ASSISTANT REGISTRAR OF ITAT, INDORE BENCH ACIT,2(1), INDORE VS. M/S. HARSHDEEP REAL ESTATE PR IVATE LIMITED, INDORE. I.T.A.NO. 562/IND/2015 A.Y . 2010-11 PAGE 7 OF 7 7