Smt. Kalpana Surana, Ujjain V. The ITO WD 1(1), Ujjain

ITA 646/IND/2013

• Counselvise Citation: 64622714 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 05-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Unexplained investment; Value adopted by valuation officer
• Section: 143(3); 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NOS. 646 & 647/IND/2013 A.YS. 2004-05 & 2005-06 SMT. KALPANA SURANA UJJAIN PAN ALWPS-2415E ::: APPELLANT VS INCOME TAX OFFICER 1(1) UJJAIN ::: RESPONDENT ` APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 1 2. 5 .2015 DATE OF PRONOUNCEMENT 1 5 . 5 .2015 O R D E R THESE APPEALS FILED BY THE ASSESSEE EMANATE FROM THE COMMON ORDER OF THE LEARNED CIT(A)-I, UJJAIN, DATED 20.9.2013. IN THESE APPEALS, A COMMON ISSUE RELATING TO 2 INVESTMENT IN PROPERTY ON THE BASIS OF VALUATION REPOR T IS INVOLVED, THEREFORE, THESE ARE BEING DECIDED BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN THIS APPEAL, ORIGINAL ASSESSMENT WAS COMPLETED U /S 143(3) OF THE INCOME TAX ACT, 1961 AT AN INCOME OF RS . 2,11,460/- + AGRICULTURAL INCOME OF RS. 70,000/- ON 22.3.2006. THE ASSESSEE CONTESTED THIS ASSESSMENT UP TO THE ITAT LEVEL. HOWEVER, IN THE ASSESSEE ORDER A FIND ING WAS RECORDED BY THE ASSESSING OFFICER THAT THE ASSESSEE H AS CONSTRUCTED A HOTEL PROPERTY KNOWN AS HOTEL SATYAM OPPOSITE MAHAKALESHWAR TEMPLE AND THE VALUATION OF THE PROPERTY WAS REFERRED TO DVO. AFTER COMPLETION OF ASSESSMENT, DVO REPORT WAS RECEIVED WHEREIN ESTIMATED COST OF CONSTRUCTION OF THE HOTEL BUILDING WAS AT RS.30,56,111/- AS AGAINST RS. 13,40,000/- DECLARED BY THE ASSESSE. THIS BIFURCATION WAS SHOWN IN THE REPORT IN TWO PARTS RS.11,40,340/- IN THE A.Y. 2004-05 AS AGAINST RS. 5 3 LACS DECLARED BY THE ASSESSEE AND THE UNEXPLAINED INVESTMENT WORKED OUT IN THE PROPERTY WAS RS.6,40,34 0/-. ON THAT BASIS, NOTICE U/S 148 WAS ISSUED. IN THE A.Y. 2005- 06 DIFFERENCE WAS RS. 10,24,540/- AND SIMILAR ACTION WAS INITIATED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE ASSESSEE HAS TAKEN THE OBJECTION TO THE VALUATION M ADE ON THE BASIS OF CPWD RATES FOR DELHI BEING EXCESSIVE TO THE LOCAL RATES BY 20% TO 25%. IT WAS ALSO SUBMITTED THAT S ELF SUPERVISION AND CONTRACTORS PROFIT WAS NOT REDUCED. 1 5% DEDUCTION SHOULD BE ALLOWED ON THIS ACOUNT. FURTHER, HE ALSO PLEADED THAT INTERNAL ELECTRICAL EXPENSES HAVE BEEN TAKEN AT 4.5% OF THE TOTAL COST WHICH IS EXCESSIVE. H E ALSO OBJECTED TO THE COST OF INTERNAL WATER SUPPLY AND SANIT ARY INSTALLATION AT RS. 2,54,906/- WHICH HAS BEEN INFLATED T HE RATE BY 1.94 TIMES. THE COST FOR EXTRA ITEMS OF RS.2,15,986/- WAS ALSO EXCESSIVE. HE PLEADED THAT THE 4 CIT(A) HAS GRANTED RELIEF ONLY TO THE EXTENT OF 20%. HOWEVER, THE ASSESSEE DESERVES TO BE ALLOWED REDUCTIO N FROM CPWD RATES PRESCRIBED AT DELHI AT LEAST BY 35% ON THESE GROUNDS. 4. ON THE OTHER HAND, THE LEARNED DR RELIED ON TH E ORDERS OF THE AUTHORITIES BELOW AND PLEADED THAT THE ASSESSEE HAS BEEN GRANTED DEDUCTION WHICH IS 20% OF TH E TOTAL AMOUNT ESTIMATED BY THE DVO AFTER CONSIDERATION OF OBJECTIONS RAISED BY THE ASSESSE, THEREFORE, THERE IS NO FURTHER SCOPE FOR ANY REDUCTION. HE PLEADED TO DISMIS S ASSESSEES APPEAL. 5. WE HAVE HEARD BOTH THE SIDES. THE PROPERTY IS SITUATED IN UJJAIN WHICH IS COMPARATIVELY A SMALL TOWN. CONSIDERING THE VARIOUS PLEADINGS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE WITH REGARD TO RATES ADOPTED BY THE DVO AND ESTIMATED COST OF VARIOUS ITEMS INCLUDING INTERNAL WATER SUPPLY AND SANITARY INSTALLATION, EXTRA ITEM S, 5 BASEMENT AND OTHER STRUCTURE, WE ARE OF THE VIEW THAT T HE DEDUCTION UP TO 25% SHALL BE JUSTIFIED TO MEET THE E NDS OF JUSTICE. WE ACCORDINGLY MODIFY THE ORDER OF THE A.O . ONLY TO THAT EXTENT. DEDUCTION IS TO BE ALLOWED UPTO 25%. WE DIRECT TO WORK OUT THE ADDITION ACCORDINGLY. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 15TH MAY, 2015 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER MAY , 2015 DN/-