UNIQUE ENCLAVE, Jaipur V. DCIT, Jaipur

ITA 575/JPR/2014

• Counselvise Citation: 57523114 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 27-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Keywords: Valuation report
• Section: 56(2); 145; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 575/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. M/S. UNIQUE ENCLAVE, C-116, JANPATH, LAL KOTHI SCHEME, JAIPUR. CUKE VS. THE D.C.I.T, CC-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACFU 2744 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 19/10/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE LD. CIT (A), CENTRAL, JAIPUR DATED 04.06.2014 FOR THE ASSESSMENT YEAR 200 9-10. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- THE LD. COMMISSIONER OF INCOME TAX (APPEALS), HAS ERRED IN LAW AND ON FACTS IN :- I) UPHOLDING THE REJECTION OF BOOKS OF ACCOUNT U/S 145 (3). 2 ITA NO. 575/JP/2014 A.Y. 2009-10 M/S. UNIQUE ENCLAVE VS. DCIT II) UPHOLDING REFERENCE TO DVO BY ADIT U/S 142A WHEN NO PROCEEDINGS WERE PENDING BEFORE ADIT. REFERENCE BEI NG INVALID THE CONSEQUENT ADDITIONS BASED ON SUCH INVA LID REFERENCE ARE BAD IN LAW. III) UPHOLDING ADDITION OF RS. 6,58,212/- ON ACCOUNT OF DIFFERENCE IN ASSESSEES VALUATION OF STOCK-IN-TRAD E AND DVOS VALUATION. IV) NO ADDITION CAN BE MADE TO THE VALUE OF STOCK-IN-TR ADE ON THE BASIS OF DVOS VALUATION. 2. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET C ONTENDS THAT THE ASSESSEE IS A GROUP CONCERN OF M/S. UNIQUE BUILDERS & DEVELOPERS (REALTY). SIMILAR ISSUES HAVE AROSE IN ASSESSMENT YEARS 2006-07 TO 2009-10. THE ITAT J AIPUR BENCH BY CONSOLIDATED ORDER DATED 30.04.2015 IN ITA NOS. 464 TO 466, 620 TO 622 , 467 TO 470/JP/2012 AND OTHERS HAVE DECIDED THE ISSUE BY FOLLOWING OBSERVATIONS :- 42. ADVERTING TO THE ISSUE OF REFERENCE U/S 142A BY THE ADIT TO DVO, THE RELEVANT PROVISIONS HAVE BEEN MENTIONED AB OVE. IT IS CLEAR THAT THIS SECTION EMPOWERS ONLY THE ASSESSING OFFIC ER AS AUTHORIZED OFFICER TO MAKE REFERENCE TO THE DVO U/S 142A OF TH E ACT. THIS SECTION DOES NOT USE ANY TERM LIKE ADIT BEING AN A UTHORIZED OFFICER. FURTHER IT HAS NOT BEEN DISPUTED THAT WHAT HAS BEE N REFERRED TO FOR VALUATION OF STOCK IN TRADE OF THE ASSESSEE AND NOT ANY INVESTMENT REFERRED U/S 69A OR 69B; BUILLION, JEWELLERY OR ANY OTHER VALUABLE ARTICLE REFERRED TO IN SECTION 69A OR 69B; IS NOT A PROPERTY REFERRED U/S 56(2) OF THE ACT. IN THESE EVENTUALITIES, THE J UDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. UMIYA CO -OP HOUSING SOCIETY LTD. , 314 ITR 272 (GUJ) AND ME & MUMMY HOS PITAL VS. 3 ITA NO. 575/JP/2014 A.Y. 2009-10 M/S. UNIQUE ENCLAVE VS. DCIT ACIT 107 DTR 209 (GUJ) AND VARIOUS OTHER JUDGEMENT S CITED BEFORE US SUPPORT THE CONTENTIONS OF THE ASSESSEE. THUS DV O REFERENCE IS HELD TO BE INVALID. WE ALSO FIND MERIT IN THE CONTE NTION OF THE ASSESSEE THAT DVO OUGHT TO HAVE APPLIED THE PWD RATES IN PLA CE OF CPWD RATES. BESIDES 2.5% REBATE ON ACCOUNT OF SELF SUPER VISION AND SELF BULK PROCUREMENT OF MATERIAL IS TOO MEAGER. IN OUR VIEW THIS REBATE OUGHT TO HAVE BEEN TO AT LEAST TO THE SCALE OF 5% AS THE ASSESSEES ARE THE PROFESSIONAL BUILDERS HAVING THEIR OWN ENGINEERING STAFF. GOING BY DVO VALUATION, THE DIFFERENCE OF VALUATION COMES TO 5.5% WHICH AMOUNTS TO NOMINAL DIFFERENCE WHEN VIEWED FROM THE ANGLE THAT ITS COMPARISONS OF TWO ESTIMATES WHICH BASICALLY ARE TW O OPINIONS. IF THE PWD RATES ARE APPLIED ALONGWITH 5% REBATE AS MENTIO NED ABOVE THEN IT WILL LEAVE NO SCOPE FOR ANY DIFERRENCE OR ADDITI ON ON ACCOUNT OF VALUATION REPORT. THUS DVOS REFERENCE IS BAD IN LA W BEING VOID AB INITIO BESIDES IT HAS NO MERIT. CONSEQUENTLY, ANY A DDITION IN RESPECT OF VALUATION CANNOT BE MADE UNDER THE ASSESSEE'S CASE. SINCE THE ISSUES IN QUESTION ARE COVERED ON THE VAL IDITY OF REFERENCE AND MERITS AS WELL, THE ASSESSEES APPEAL MAY BE ALLOWED. 3. THE LD. D/R SUPPORTED THE ORDER OF THE AO. 4. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT HAS NOT BEEN DISPUTED THAT THE ASSESSEE IS A PART O F THE GROUP OF ABOVE CONSTRUCTION CONGLOMERATE COMPANY. THE ISSUES OF VALIDITY OF REF ERENCE AND ADDITIONS BASED THEREON HAVE BEEN DECIDED BY THE JAIPUR ITAT BY THE ABOVE O RDER. RESPECTFULLY FOLLOWING THE SAME, THE ASSESSEE S GROUNDS ARE ALLOWED. 4 ITA NO. 575/JP/2014 A.Y. 2009-10 M/S. UNIQUE ENCLAVE VS. DCIT 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/10/20 15. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19 /10/ 2015 DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. UNIQUE ENCLAVE, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CC-2, JAIPUR. 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.575/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR