M/s. Sri Padma Developers, Visakhapatnam V. The Income Tax Officer, Ward-1(4), Visakhapatnam

ITA 656/VIZ/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4365 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 02-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 133A; 69B; 69A

Judgement Text

आयकरअपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्ि ू रु आर एऱ रेड्डी, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./I.T.A.No.656 & 657/Viz/2019 (ननधधारण वषा / Assessment Year : 2009-10 & 2010-11) M/s Sai Padma Developers C/o M.Padmavathi Flat No.501, Advaitha Kuteeram Apts., Opp.Krishna Mandir North Extension, Seethammadhara Visakhapatnam [PAN : ABHFS9998P] Vs. Income Tax Officer Ward-1(4) Visakhapatnam (अपीऱार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अऩीऱधथी की ओर से/ Appellant by : Shri C.Subrahmanyam, AR प्रत्यधथी की ओर से / Respondent by : Shri Karthik Manickam, DR स ु नवधई की तधरीख / Date of Hearing : 11.04.2022 घोषणध की तधरीख/Date of Pronouncement : 19.04.2022 O R D E R Per Shri Balakrishnan S, Accountant Member These appeals are filed by the assessee against the orders of the Commissioner of Income Tax (Appeals)-2 [in short, “CIT(A)”], Guntur, in ITA No.0115 & 0116/GNT/CIT(A)-2/2013-14 dated 30.09.2019 for the Assessment Years (A.Y.) 2009-10 and 2010-11. Since the grounds raised in 2 ITA No.656 & 657/Viz/2019, A.Y.2009-10 & 2010-11 M/s Sai Padma Developers, Visakhapatnam these appeals are common, theses appeals are heard, clubbed together and a common order is being passed for the sake of convenience as under. 2. Brief facts of the case are that the assessee is a developer and has constructed an apartment building by name ‘Andhra Residency’ in Visakhapatnam during the period 2008-10. A survey u/s 133A of the Income Tax Act, 1961 (in short ‘Act’) was conducted in the business premises of the assessee on 28.08.2010. The assessment was reopened u/s 147 and notice u/s 148 was issued and served on the assessee. In response to the notice u/s 148, the assessee filed its return of income on 14.05.2012 admitting total income of Rs.200/-. Subsequently, the case was taken up for scrutiny and statutory notices were issued to the assessee. The assessee in his return of income had declared work in progress of Rs.30 lakhs for the relevant assessment year. The AO referred the matter to the Departmental Valuation Officer (DVO), Valuation Cell, Visakhapatnam for necessary examination of the value of work in progress. The DVO submitted valuation report for the above referred property at Rs.147.51 lakhs. The assessee also submitted another valuation report, estimating the total cost of Rs.97.37 lakhs. The only issue in the present appeal relates to reference made u/s 142A of the Act to the DVO pertaining to treating the asset as covered u/s 69A/69B. The Ld.AO observed that no books of accounts were 3 ITA No.656 & 657/Viz/2019, A.Y.2009-10 & 2010-11 M/s Sai Padma Developers, Visakhapatnam maintained by the assessee firm and no bills or vouchers were produced in support of cost of construction incurred by the assessee. The Ld.AO therefore added Rs.14.25 lakhs being the difference in valuation of the cost of construction of the project. 3. Aggrieved by the order of the AO, the assessee filed appeal before the CIT(A) and the Ld.CIT(A) partly allowed the appeal of the assessee. 4. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before the Tribunal. The Ld.AR argued that the only issue in the present appeal relates to reference made u/s 142A of the Act to DVO. The Ld.AR submitted that it is not permissible, as reference to DVO can be made only for investment referred to u/s 69A and 69B of the Act. The Ld.AR also accepted the fact that this ground was not pressed before the Ld.CIT(A), and hence, it was dismissed by the Ld.CIT(A). The Ld.AR relied on the decision of Hon’ble High Court of Gujarat in the case of Darshan Buildcon Vs. Income Tax Officer, 416 ITR 66 (Gujarat), wherein, it was held that amendment to section 142A of the Act is w.e.f. 01.10.2014 and it does not have any retrospective effect. The Ld.AR also relied on the decision of Hon’ble High Court of Punjab & Haryana in 99 ITR 349, where it was held that the Tribunal was bound to hear the assessee. The Ld.AR, therefore, 4 ITA No.656 & 657/Viz/2019, A.Y.2009-10 & 2010-11 M/s Sai Padma Developers, Visakhapatnam pleaded that reference made to DVO u/s 142A prior to the amendment, is bad in law and sought relief on this ground. 5. The Ld.DR relied on the order of the Ld.CIT(A). 6. We have heard both the parties and perused the material placed on record. The Hon’ble High Court of Gujarat in the case of Darshan Buildcon Vs. Income Tax Officer, 416 ITR 66 (Gujarat) held as under: “In the opinion of this court, since sub-section(2) of section 142A of the Act in its existing form has been brought on the statute book by substituting the earlier provision with effect from 01.10.2014, viz., subsequent to the reference made by the Assessing Officer, such provision would not be applicable to the facts of the present case which would be governed by section 142A as subsisting on the date when the order of reference was made.” In this regard, we note that the legal ground raised by the assessee before the Ld.CIT(A), was not pressed by the assessee during appeal proceedings before the Ld.CIT(A). Since the assessee has raised the issue before us, we by respectfully following the decision of Hon’ble High Court of Gujarat, remit the matter back to the file of the Ld.CIT(A) with a direction to consider this ground in accordance with the provisions of section 142A of the Act, subsisting on the date on which the reference to DVO was made by AO. 5 ITA No.656 & 657/Viz/2019, A.Y.2009-10 & 2010-11 M/s Sai Padma Developers, Visakhapatnam 7. In the result, appeals of the assessee are allowed for statistical purpose. Order Pronounced in open Court on 19 th April, 2022. Sd/- Sd/- (द ु व्ि ू रु आर.एऱ रेड्डी) (एस बाऱाक ृ ष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याययकसदस्य/JUDICIAL MEMBER ऱेखा सदस्य/ACCOUNTANT MEMBER Dated : 19.04.2022 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाररती/ The Assessee– M/s Sai Padma Developers, C/o M.Padmavathi Flat No.501, Advaitha Kuteeram Apts., Opp.Krishna Mandir, North Extension, Seethammadhara, Visakhapatnam 2. रधजस्व/The Revenue – Income Tax Officer, Ward-1(4), Visakhapatnam 3. प्रधान आयकर आय ु क्त The Principal Commissioner of Income Tax-2, Visakhapatnam 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax (Appeals)-2, Guntur 5. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशधखधऩटणम/ DR,ITAT, Visakhapatnam 6.गधर्ा फ़धईऱ / Guard file आदेशधन ु सधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam