Unimodex Construction Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 5876/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0301 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2006-2007
• Appeal Filed On: 23-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRENDRA KUMAR
• Keywords: Fair market value

Judgement Text

ITA NO. 5876/DEL/2010 1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH H: NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 5876/DEL/2010 A.Y. : 2006-07 M/S UNIMODEX CONSTRUCTION PVT. LTD. VS. ITO, WAR D 18(1) M-30, GREAKTER KAILASH-II, NEW DELHI NEW DELHI 110 048 [PAN : AAACU4854D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. P.C. YADAV, ADV. DEPARTMENT BY : SH. AMRENDRA KUMAR, SR. D.R. O R D E R PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER S OF LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 22.10.201 0 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CONST RUCTION, SALE AND PURCHASE OF PROPERTIES. ASSESSING OFFICER N OTED THAT DURING THE YEAR ASSESSEE COMPANY HAD SOLD PROPERTY BEARING 29, HEMK UNT COLONY, 1 ST FLOOR, NEW DELHI AND DECLARED SALE VALUE OF ` 30 LACS. THIS MATTER WAS REFERRED TO VALUATION CELL FOR DETERMINING THE VALU E OF PROPERTY. THE VALUATION CELL VALUED THE FAIR MARKET VALUE AT ` 62 ,44,810/-. IN THESE CIRCUMSTANCES, ASSESSING OFFICER HELD THAT ` 32,44,810/- BEING THE DIFFERENCE ITA NO. 5876/DEL/2010 2 BETWEEN THE SALE VALUE DECLARED AND THE VALUATION DO NE BY THE VALUATION CELL WAS TO BE ADDED TO THE INCOME OF THE ASSESSEE. 3. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX ( APPEALS) CONFIRMED THE ASSESSING OFFICERS ACTION. 4. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEFORE U S. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E RELEVANT RECORDS. WE FIND THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRU CTION AND SALE AND PURCHASE OF THE PROPERTIES. ASSESSING OFFICER HA S NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, NOR ANY INCRIMINATING MATERIAL HAS BEEN FOUND BY THE REVENUE. IN THESE C IRCUMSTANCES, THERE WAS NO OCCASION TO REFER THE PROPERTY FOR VALUATION. THUS THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND SALE AND PUR CHASE OF PROPERTIES, THE VALUE HAS TO BE EXAMINED FROM THE POINT OF VIEW OF BOOKS OF ACCOUNTS AND DOCUMENTS FOUND AND PRODUCED. MERE REFERENCE T O VALUATION CELL WITHOUT ANY REASON CANNOT SERVE THE PURPOSE WHEN THE I TEMS INVOLVED IS THE ONE IN WHICH THE ASSESSEE DEALS IN. IT IS ALSO TO BE NOT ED THAT IF THE FAIR MARKET VALUE OF THE IMPUGNED PROPERTY IS HELD BY TH E VALUATION CELL TO BE OF SUCH HIGHER AMOUNT, THEN THE COST THEREOF WOULD A LSO BE SUBSTANTIALLY OF HIGHER AMOUNT. 6. IN THESE CIRCUMSTANCES, WE FIND THAT DECISION OF THE HONBLE APEX COURT IN THE CASE OF K.P. VERGHESE VS. INCOME TAX OFF ICER, ERANKULAM 131 ITR 597 (SC) IS VERY MUCH APPLICABLE. IN THIS CASE I T HAS BEEN HE LD THAT THE BURDEN OF PROVING IS THAT OF REVENUE WHEN THERE IS ALLEGATION OF UNDERSTATEMENT ON CONCEALMENT IN THE CONSIDERATION SHOWN. ITA NO. 5876/DEL/2010 3 7. WE ALSO PLACE RELIANCE UPON THE JUDGEMENT OF TH E HONBLE APEX COURT IN THE CASE OF C.I.T. VS. P.V. KALYANASUNDARAM IN (2007) 294 ITR 49 (SC) IN WHICH ALLEGATIONS OF ON MONEY TRANSACTION ON THE BASIS OF NON-CONVINCING LOOSE SHEETS FOUND DURING THE COURSE OF SEARCH AND CONFLICTING S TATEMENT OF THE SELLER, WAS DELETED BY THE TRIBUNAL (TO WHICH, ONE OF US THE AC COUNTANT MEMBER WAS THE PARTY) AND THE SAME WAS AFFIRMED BY THE HONBLE H IGH COURT AND HONBLE APEX COURT. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PR ECEDENTS, WE DO FIND ANY JUSTIFICATION OF THE ADDITION IN THIS REGARD . WE HOLD THAT THE ASSESSING OFFICER HAS ERRED IN REFERRING TO VALUATION CELL ITEMS IN WHICH ASSESSEE DEALS IN. ACCORDINGLY, WE SET ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND DELETE THE ADDITION. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE, I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/2/2011 UPON CONCLUSION OF THE HEARING. SD/- SD/- [RAJPAL YADAV) [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 28/2/2011 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES