DCIT, New Delhi V. M/s. Mahesh Edible Oil Industries Ltd., New Delhi

ITA 5761/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7998 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 15-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K BANSAL SENIOR
• Assessee Lawyers: RAKESH JAIN; DEEPAK TAYAL CAS
• Keywords: Rejection of books of accounts; Value adopted by valuation officer
• Section: 69B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT AND AND AND AND MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA ITAITA ITA NO NONO NO . .. . 5761/DEL/2015 5761/DEL/2015 5761/DEL/2015 5761/DEL/2015 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2012 2012 2012 2012 - -- - 13 1313 13 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -16(1), 16(1), 16(1), 16(1), NEW D NEW D NEW D NEW DELHI. ELHI. ELHI. ELHI. VS. VS. VS. VS. M/S MAHESH EDIBLE OIL INDUSTRIES M/S MAHESH EDIBLE OIL INDUSTRIES M/S MAHESH EDIBLE OIL INDUSTRIES M/S MAHESH EDIBLE OIL INDUSTRIES LIMITED, LIMITED, LIMITED, LIMITED, 3/14, JANGPURA 3/14, JANGPURA 3/14, JANGPURA 3/14, JANGPURA- -- -B, B,B, B, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 014. 110 014. 110 014. 110 014. PAN : AACCM7102J. PAN : AACCM7102J. PAN : AACCM7102J. PAN : AACCM7102J. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. BANSAL, SENIOR DR. RESPONDENT BY : SHRI RAKESH JAIN AND SHRI DEEPAK TAYAL, CAS. DATE OF HEARING : 16.04.2019 16.04.2019 16.04.2019 16.04.2019 DATE OF PRONOUNCEMENT : 22.04.2019 22.04.2019 22.04.2019 22.04.2019 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT : :: :- -- - THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2012-13 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-6, NEW DELHI DATED 29 TH JULY, 2015. 2. IN THIS APPEAL, THE REVENUE HAS RAISED FOLLOWING GROUNDS :- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) IS JUSTIFIED TO HOLD THAT ESTIMATION OF VALUE OF ASSETS BY THE VALUATION OFFICER CAN BE MADE ONLY AFTER REJECTION OF BOOKS OF ACCOUNTS EVEN WHEN THE PROVISIONS OF SECTION 142A OF THE ACT DO NOT STIPUL ATE ANY SUCH CONDITION? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.85,82,093/- MADE BY THE AO U/S 69B ON ACCOUNT OF DIFFERENCE IN VALUATION OF COST OF CONSTRUCTION OF FACTORY BY ITA-5761/DEL/2015 2 THE DVO AND THE ASSESSEE WITHOUT APPRECIATING THE DETAILED GIVEN BY THE AO IN THE ASSESSMENT ORDER? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THAT VALUATION OF BUILDING SHOULD BE MADE AT THE LOCAL PWD RATE WI THOUT APPRECIATING THE FACT THAT THE PAR METHOD OF CPWD (APPROVED BY THE CBDT) AFTER APPLYING COST INDEX OF KOTA STATION HAS BEEN USED BY THE DVO WHILE ARRIVING AT THE ESTIMATED COST OF CONSTRUCTION? 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE ITAT H AS CONSIDERED IDENTICAL ISSUE IN THE TWO PRECEDING YEARS I.E., AS SESSMENT YEAR 2009- 10 AND 2010-11. THE ADDITION IS MADE FOR THE UNEXP LAINED INVESTMENT IN THE CONSTRUCTION OF FACTORY ON THE BASIS OF ESTI MATION OF COST OF CONSTRUCTION BY THE DVO. SINCE THE CONSTRUCTION IS SPREAD OVER FOUR YEARS, THE PROPORTIONATE ADDITIONS HAVE BEEN MADE I N THE FOUR YEARS BEGINNING FROM ASSESSMENT YEAR 2009-10 TO 2012-13. THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED BY THE ITA T IN THE ORDER FOR ASSESSMENT YEAR 2009-10 AND 2010-11 VIDE ITA NO.547 & 548/DEL/2014 WITH THE FOLLOWING FINDING :- 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THA T WHILE CONSIDERING THE DVO REPORT FOR ESTIMATING THE AMOUN T OF INVESTMENT IN FACTORY, THE ASSESSING OFFICER DID NO T REJECT BOOKS OF ACCOUNT NEITHER HE FOUND ANY MISTAKE IN TH E BOOKS OF ACCOUNT. HE SIMPLY REFERRED THE MATTER TO DVO FOR OBTAINING HIS ESTIMATE IN CONSTRUCTION OF FACTO RY BUILDING AND ADDED THE DIFFERENCE BETWEEN THE REPOR T OF DVO AND INVESTMENT DECLARED BY THE ASSESSEE. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF SARGA M CINEMA VS. CIT (2010) SC 328 ITR 513 HAS HELD AS UN DER : IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL DEC IDED THE MATTER RIGHTLY IN FAVOUR OF THE ASSESSEE INASMUCH A S THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER (DVO) WITHOUT THE BO OKS OF ACCOUNT BEING REJECTED IN THE PRESENT CASE, A CATEG ORICAL FINDING IS RECORDED BY THE TRIBUNAL THAT THE BOOKS WERE NEVER REJECTED. THIS ASPECT HAS NOT BEEN CONSIDERE D BY ITA-5761/DEL/2015 3 THE HIGH COURT. IN THE CIRCUMSTANCES, RELIANCE PLA CED ON THE REPORT OF THE DVO WAS MISCONCEIVED. IN THE PRESENT CASES, ADMITTEDLY BOOKS OF ACCOUNTS HAS NOT BEEN REJECTED AS THE ASSESSING OFFICER DID NOT FIND ANY INFIRMITY THEREFORE THE DECISION OF HON'BLE SUPREME COURT CITED ABOVE IS DULY APPLICABLE. WE FURTHER FIND THAT THE DIFFERENCE BETWEEN THE EST IMATION MADE BY DVO AND THAT DECLARED BY ASSESSEE WAS ABOUT 19%. IT IS AN UNDISPUTED FACT THAT DVO HAD APPLIED CPWD RATES WHEREAS THE FACTORY OF THE ASSESSEE WAS SITUA TED IN KOTA AND WAS NOT SITUATED IN DELHI. THE HONBLE RA JASTHAN HIGH COURT IN THE CASE OF CIT VS. DINESH TALWAR 265 ITR 344 HAS HELD THAT THE VALUE OF CONSTRUCTION IS A QU ESTION OF FACT AND THAT DEPENDS ON THE MATERIAL, PLACE, LOCAT ION AND QUALITY OF CONSTRUCTION. THE HONBLE COURT HAD HEL D THAT A DEDUCTION OF 20% FROM THE CPWD RATES WILL MAKE THE RATES COMPARABLE TO LOCAL PWD RATES. THE LD.CIT(A) HAS P ASSED DECISION IN FAVOUR OF ASSESSEE ON MERITS ALSO WHERE IN HE HAS HELD THAT CPWD RATES ARE NOT COMPARABLE WITH PW D RATES. THE LD.CIT(A) HAS PASSED A REASONED AND SPE AKING ORDER AND WE DO NOT FIND ANY INFIRMITY IN IT AND TH EREFORE IN VIEW OF THE ABOVE, THE APPEALS FILED BY REVENUE ARE DISMISSED. 4. SINCE THE ISSUE IS IDENTICAL IN THE YEAR UNDER C ONSIDERATION AS THE ADDITION IS IN RESPECT OF COST OF CONSTRUCTION OF T HE SAME PROPERTY WHICH IS ALREADY CONSIDERED BY THE ITAT, THE ABOVE DECISION WOULD BE SQUARELY APPLICABLE. WE, THEREFORE, RESPECTFULLY F OLLOWING THE SAME, HOLD THAT THE LEARNED CIT(A) WAS JUSTIFIED IN DELET ING THE ADDITION MADE BY THE ASSESSING OFFICER IN THIS REGARD. ACCORDING LY, THE REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 22.04.2019 . SD/- SD/- (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE VICE VICE VICE PRESIDENT PRESIDENT PRESIDENT PRESIDENT VK. ITA-5761/DEL/2015 4 COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TA X DEPUTY COMMISSIONER OF INCOME TAX DEPUTY COMMISSIONER OF INCOME TAX DEPUTY COMMISSIONER OF INCOME TAX, ,, , CIRCLE CIRCLE CIRCLE CIRCLE- -- -16(1), NEW DELHI. 16(1), NEW DELHI. 16(1), NEW DELHI. 16(1), NEW DELHI. 2. RESPONDENT : M/S MAHESH EDIBLE OIL INDUSTRIES LI MITED, M/S MAHESH EDIBLE OIL INDUSTRIES LIMITED, M/S MAHESH EDIBLE OIL INDUSTRIES LIMITED, M/S MAHESH EDIBLE OIL INDUSTRIES LIMITED, 3/14, JANGPURA 3/14, JANGPURA 3/14, JANGPURA 3/14, JANGPURA- -- -B, NEW DELHI B, NEW DELHI B, NEW DELHI B, NEW DELHI 110 014. 110 014. 110 014. 110 014. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR