Appeal Details
Counselvise Citation
[2020] 111 COUNSELVISE.COM (IT) 2032 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
7 year(s) 7 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-02-2020
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Assessment Year
2007-2008
Appeal Filed On
27-07-2012
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 772/CHD/2012 / ASSESSMENT YEAR : 2007-08 M/S HOTEL OAK VALLEY RESIDENCY, NEAR BUS STAND, DISTT.CHAMBA (H.P.) VS. ! THE ITO, DALHOUSIE AT BANIKHET. ' # ./ PAN NO: AADFO6336G APPEAL AGAINST THE ORDER OF CIT(A)-SHIMLA DATED 14. 5.2012 '$/ APPELLANT &' '$ / RESPONDENT ./ ITA NO. 496/CHD/2018 / ASSESSMENT YEAR : 2007-08 M/S HOTEL OAK VALLEY RESIDENCY, NEAR BUS STAND, DISTT.CHAMBA (H.P.) VS. ! THE ITO, DALHOUSIE AT BANIKHET ' # ./ PAN NO: AADFO6336G APPEAL AGAINST THE ORDER OF CIT(A) - PALAMPUR DATED 28.6.2017 '$/ APPELLANT &' '$ / RESPONDENT ./ ITA NO. 485/CHD/2017 / ASSESSMENT YEAR : 2008-09 M/S HOTEL OAK VALLEY RESIDENCY, NEAR BUS STAND, DISTT.CHAMBA (H.P.) VS. ! THE ITO, DALHOUSIE AT BANIKHET ' # ./ PAN NO: AADFO6336G APPEAL AGAINST THE ORDER OF CIT(A) - AMRITSAR CAMP AT PALAMPUR (H.P.) DATED 2.12.2016 '$/ APPELLANT &' '$ / RESPONDENT ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 2 ()*+ /ASSESSEE BY : SHRI PARIKSHIT AGGARWAL, CA *+ / REVENUE BY : SHRI ARVIND SUDERSHAN, JCIT DR , -*) .# /DATE OF HEARING : 06.02.2020 /0 *) .# / DATE OF PRONOUNCEMENT : 27.02.2020 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE AS SESSEE AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX(APPEALS) [HEREINAFTER REFERRED TO AS CIT(A)] 2. FIRSTLY, WE SHALL DEAL WITH THE APPEAL OF THE AS SESSEE IN ITA NO. 772/CHD/2012, WHEREIN, THE ASSESSEE HAS TAKEN FOLLO WING GROUNDS OF APPEAL:- ITA NO. 772/CHD/2012:- 1. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED ADDIT ION OF RS. 1854476/-U/S 69 ON THE BASIS OF DVO'S REPORT ON LY. 2. THAT THE LEARNED CIT(A), WHILE CONFIRMING ADDITION OF RS. 1854476/-, HAS WRONGLY FAILED TO APPRECIATE SUBMISS IONS MADE. 3. THAT THE LEARNED CIT(A), WHILE CONFIRMING ADDITION OF RS. 1854476/, HAS WRONGLY CONCLUDED THAT REFERENCE TO VALUATION OFFICER WAS MADE U/S 142A WAS IN ORDER. 4. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED INITI ATION OF PENALTY PROCEEDINGS U/S 271 (1 )(B) WITHOUT APPRECI ATING WRITTEN SUBMISSIONS MADE. 5. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED ACTIO N OF ITO IN ADOPTING STATUS OF ASSESSEE FIRM AS AOP WITH OUT ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 3 APPRECIATING WRITTEN SUBMISSIONS MADE IN THIS REGAR D. 6. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED ACTIO N OF ITO IN FRAMING ASSESSMENT U/S 144 IN PLACE OF SECTI ON 143(3) SIMPLY ON THE GROUND OF NON-PRODUCTION OF AC COUNT BOOKS WITHOUT APPRECIATING ASSESSEE'S WRITTEN SUBMI SSIONS MADE. 7. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED ADDIT ION OF RS. 942000/-ON ACCOUNT OF ROOM RENT WITHOUT APPRECI ATING WRITTEN SUBMISSIONS MADE. 8. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED ADDI TION OF RS. 159339/- ON ACCOUNT OF RESTAURANT SALE WITHOUT APPRECIATING WRITTEN SUBMISSIONS MADE THE LEARNED C IT(A) HAS WRONGLY IGNORED SUBMISSION THAT AO HAS ADDED / SALES INSTEAD OF PROFIT ON SALES WHILE MAKING ADDITION UN DER HEAD RESTAURANT SALES. 9. THAT THE LEARNED CIT(A) HAS WRONGLY DISMISSED OUR G ROUND OF APPEAL REGARDING PENAL INTEREST CHARGED U/S 234A AND 234B WITHOUT APPRECIATING OUR WRITTEN SUBMISSIONS M ADE IN THIS REGARD. 10. THAT THE APPELLANT CRAVES TO ADD, TO AMEND, TO DELE TE, TO WITHDRAW, TO MODIFY ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING OR DURING HEARING PERIOD. 11. THAT THE ORDER PASSED BY CIT(A) IS ILLEGAL, BAD IN LAW AND CONTRARY TO THE/ PROVISIONS OF LAW AND FACTS OF THE CASE. 3. GROUND NO. 1 TO 3 : VIDE GROUNDS NOS. 1 TO 3, THE ASSESSEE HAS AGITATED THE CONFIRMATION OF ADDITION OF RS. 18,54, 476/- MADE U/S 69B OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') MADE BY THE ASSESSING OFFICER TO THE INCOME OF THE ASSESSEE. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S RUNNING A SMALL HOTEL AT DALHOUSIE. A SURVEY WAS CONDUCTED ON 07. 08.2007 AT THE ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 4 BUSINESS PREMISES OF THE ASSESSEE AT DALHOUSIE. DUR ING THE COURSE OF SURVEY, A COPY OF A LEASE DEED EXECUTED ON 04.10.20 05 FOR 99 YEARS WAS FOUND. ACCORDING TO THE SAID LEASE DEED, ONE SH. RA JAN S/O SH. SURINDER LAL HAD LEASED OUT A HOTEL BUILDING KNOWN AS HOTEL OAK VALLEY RESIDENCY, NEAR BUS STAND, DALHOUSIE TO SH. PARAMJ IT CHANDEY AND SH. YUGANT CHANDEY ON 04.10.2005 FOR A TOTAL LEASE CONS IDERATION OF RS.30 LACS. THE SAID CONSIDERATION WAS PAID TO SH. RAJAN , THE LESSOR, BY WAY OF 6 DEMAND DRAFTS OF RS.5 LACS EACH. SUBSEQUENTLY, THE SAID HOTEL BUILDING WAS PURCHASED BY SH. PARAMJIT CHANDEY AND YUGANT CHANDEY ON 31.08.2006 FROM SH. RAJAN FOR A TOTAL CONSIDERAT ION OF RS.29.75 LACS. THUS, THE BUILDING IN QUESTION WAS SOLD AT AN AMOUN T LESSER THAN THE AMOUNT OF LEASE AFTER A PERIOD OF ABOUT 11 MONTHS F ROM THE DATE OF LEASING OUT. THE ASSESSING OFFICER ALSO NOTED THAT THE ASSESSEE HAD CLAIMED TO HAVE INCURRED CAPITAL EXPENDITURE OF RS. 2,94,429/- AFTER ACQUIRING THE ABSOLUTE OWNERSHIP OF THE HOTEL BUILD ING BUT HAD FAILED TO PRODUCE ANY BILLS IN SUPPORT OF THE SAID EXPENSES. AFTER CONSIDERING THE ENTIRE FACTS OF THE CASE, THE ASSESSING OFFICER MA DE A REFERENCE U/S 142A OF THE ACT TO THE VALUATION OFFICER (VO) OF TH E INCOME TAX DEPTT., PATIALA ON 31.01.2008 / 04.02.2008 FOR ESTIMATING T HE COST OF INVESTMENT IN THE HOTEL BUILDING. ON THE BASIS OF THE REPORT O F THE VALUATION OFFICER, THE ASSESSING OFFICER MADE AN ADDITION OF RS.18,54, 476/- ON ACCOUNT OF INVESTMENT IN THE HOTEL BUILDING U/S 69 OF THE I.T. ACT. ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 5 4. BEING AGGRIEVED BY THE ABOVE ORDER OF THE ASSESS ING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) BUT REM AINED UNSUCCESSFUL ON THIS ISSUE, HENCE, THE ASSESSEE HAS COME IN APPE AL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. A UTHORIZED REPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO G ONE THROUGH THE RECORD. AS PER THE FACTS OF THE CASE, THE ASSESSEE EARLIER ON 4.10.2005 HAD TAKEN THE HOTEL ON LEASE FOR 99 YEARS FOR A LEA SE CONSIDERATION OF RS. 30 LACS PAID BY WAY OF SIX DEMAND DRAFTS OF RS. 5 L ACS EACH. SUBSEQUENTLY, THE SAID 99 YEARS LEASE WAS CONVERTED TO A SALE DEED ON 31.8.2006 FOR A TOTAL CONSIDERATION OF RS. 29.75 LA CS. THE ASSESSING OFFICER REFERRED THE MATTER FOR VALUATION TO THE GO VT. VALUER INVOKING THE PROVISIONS OF SECTION 142A OF THE ACT. ON THE B ASIS OF THE REPORT OF THE VALUER, THE ASSESSING OFFICER ASCERTAINED THE V ALUE OF THE HOTEL LAND AND BUILDING AND ADDED THE DIFFERENCE BETWEEN THE P RICE AS SHOWN BY THE ASSESSEE TO HAVE PAID FOR PURCHASE OF THE PROPERTY AND FAIR MARKET VALUE DETERMINED BY THE VALUER. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS IN VITED OUR ATTENTION TO THE COPY OF THE REPORT OF THE GOVERNME NT VALUER PLACED AT PAGE 59 OF THE PAPER BOOK, WHEREIN, THE VALUER HAS CATEGORICALLY MENTIONED THAT THE COST OF CONSTRUCTION IS TAKEN ON 31.8.2006 AS ACTUAL YEAR OF CONSTRUCTION IS NOT KNOWN . SIMILARLY IN THE COVERING LETTER, THE VALUER HAS WRITTEN SPECIFICALLY DATE OF CONSTRUCTION NOT KNOWN. THE CASE OF THE ASSESSEE IS THAT THE HOTEL IN QUES TION WAS CONSTRUCTED / ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 6 BUILT IN THE YEAR 2001 BY THE ORIGINAL OWNER SHRI R AJAN. THERE IS NO DENIAL TO THE ABOVE FACT EITHER BY THE ASSESSING OF FICER OR ON THE PART OF THE CIT(A). THE CASE OF THE ASSESSEE IS THAT THE C OST OF CONSTRUCTION WAS MUCH CHEAPER IN THE YEAR 2001 AS COMPARED TO THE RA TES / COST OF MATERIAL AND LABOUR ETC. IN THE YEAR 2006. MOREOVE R, THE BUILDING ALSO GET DEPRECIATED OVER THE YEARS AND, HENCE, THE FAIR MARKET VALUE WAS REQUIRED TO BE DETERMINED ON ESTIMATED COST OF CONS TRUCTION IN THE YEAR 2001 AND THEREAFTER BY ALLOWING DEPRECIATION ON THE SAME. HOWEVER, IN THE CASE IN HAND, A PERUSAL OF THE REPORT OF THE GO VERNMENT VALUER REVEALS THAT THE VALUER HAS TAKEN THE COST OF CON STRUCTION / FAIR MARKET VALUE AS ON 31.8.2006. IT IS NOT THE CASE OF THE V ALUER THAT THE BUILDING WAS NEWLY CONSTRUCTED ON THE DATE, RATHER, THE VAL UER HAS MENTIONED CATEGORICALLY THAT THE DATE OF CONSTRUCTION IS NOT KNOWN. HE EVEN HAS FAILED TO ESTIMATE THE AGE OF THE BUILDING AS ON TH E DATE OF VALUATION. UNDER THE CIRCUMSTANCES, THE SAID REPORT OF THE VAL UER CANNOT BE RELIED UPON. EVEN, WE FIND THAT THE ASSESSING OFFICER HAS FORMED HIS OPINION TO REFER THE MATTER TO THE GOVERNMENT VALUER ONLY B ECAUSE THE 99 YEARS LEASE DEED WAS CONVERTED TO A SALE DEED AT THE ALM OST AT THE SAME PRICE. THIS, IN OUR VIEW, IS NOT A MATTER OF SUSPICION AS 99 YEARS LEASE IS ALMOST THE SALE OF THE PROPERTY ITSELF. THIS FACT, IN OUR VIEW, IS NOT SUFFICIENT TO HOLD THAT THE ACTUAL VALUE OF THE PROPERTY WAS MORE THAN THAT THE SALE DEED MENTIONED. THE ASSESSEE HAS ALSO CLAIMED A SUM OF RS. 2,94,429/- TO HAVE BEEN INCURRED FOR THE REPAIR AND MAINTENANC E OF THE PROPERTY. ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 7 THE SAID CLAIM OF THE ASSESSEE HAS BEEN DENIED ON T HE GROUND THAT NO SPECIFIC BILLS AND VOUCHERS WERE PRODUCED. ON THE OTHER HAND, THE CASE OF THE ASSESSEE WAS TH AT AN ADVANCE OF RS. 5 LACS WAS GIVEN TO SHRI RAJAN AND THAT HE SPEN T THE AFORESAID AMOUNT ON THE IMPROVEMENT / REPAIRS TO MAKE THE PR OPERTY SALABLE. ON THE OTHER HAND, THE SPECIFIC PLEA WAS RAISED BY THE ASSESSEE THAT THE COLLECTOR AT THE TIME OF DETERMINING THE VALUE OF T HE PROPERTY HAS RELIED UPON THE REPORT OF THE REGISTERED VALUER FOR THE P URPOSE OF PAYMENT OF STAMP DUTY. THE ASSESSEE SUBMITTED BEFORE THE ASSES SING OFFICER THAT IN THE OFFICE OF THE REGISTERING AUTHORITY / TEHSILDAR THE REPORT OF THE APPROVED VALUER WAS SUBMITTED, WHEREIN, THE VALUE O F THE BUILDING WAS MENTIONED AND THE STAMP DUTY ACCORDINGLY ACCEPTED B Y THE ASSISTANT COLLECTOR. THESE SUBMISSIONS OF THE ASSESSEE FIND M ENTION AT PAGE 8 OF THE ASSESSMENT ORDER. HOWEVER, THE LD. ASSESSING OF FICER TOTALLY IGNORED THE ABOVE SUBMISSIONS OF THE ASSESSEE. MORE OVER, THE ASSESSING OFFICER HAS HELD THAT THE VALUE OF THE PROPERTY WAS MORE THAN THAT WAS DEPICTED IN THE SALE DEED BUT HE HAD NOT INITIATED ANY ACTION FOR CORRESPONDING ADDITION TO THE INCOME OF THE SELLER. UNDER THE CIRCUMSTANCES, BECAUSE OF THE AFORESAID D ISCREPANCIES AND AMBIGUITIES IN THE VALUATION REPORT, THE RELIAN CE ON THE SAME WAS WRONGLY PLACED BY THE LOWER AUTHORITIES, WHEREAS, T HE RECORD FURNISHED BY THE ASSESSEE IN THE OFFICE OF TEHSILDAR FOR DETE RMINING THE VALUE HAS BEEN DISREGARDED WITHOUT ANY REASONS. THE ASSESSEE HAS SUBMITTED THAT ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 8 THE ASSESSEE DID NOT DEMAND THE VOUCHERS ETC. OF TH E AMOUNT INCURRED FOR REPAIR ETC. OF THE BUILDING FROM SHRI RAJAN BECAUSE OF FAITH ON HIM. THE AFORESAID CLAIM, IN OUR VIEW, CANNOT BE BRUSHED ASI DE MERELY BECAUSE THE ASSESSEE WAS NOT IN POSSESSION OF THE VOUCHERS ESPECIALLY WHEN THE SAME COULD HAVE BEEN VERY WELL VERIFIED BY THE REGI STERED VALUER AT THE TIME OF INSPECTION OF THE BUILDING. HOWEVER, AS NOT ED ABOVE, THE REGISTERED VALUER ASSESSED / DETERMINED THE VALUE O F THE PROPERTY AT A LATER DATE WITHOUT TAKING INTO CONSIDERATION THE AC TUAL FACTS AND CIRCUMSTANCES OF THE CASE. IN VIEW OF THE ABOVE, T HE ADDITION MADE BY THE LOWER AUTHORITIES ON THIS ISSUE IS NOT SUSTAINA BLE AND THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. 7. GROUND NO.4 : THIS GROUND IS PRE-MATURE AND DOES NOT NEED ADJUDICATION AT THIS STAGE. 8. GROUND NS 5 & 6 : NO ARGUMENTS HAVE BEEN ADDRESSED BY THE LD. COUNSEL FOR THE ASSESSEE IN RESPECT OF GROUND NOS. 5 & 6 OF THE APPEAL AND THE SAME ARE, THEREFORE, DISMISSED BEING NOT P RESSED. 9. GROUND NOS. 7 & 8 : THE BRIEF FACT RELATING TO THE ISSUE ARE THAT DURING THE COURSE OF SURVEY PROCEEDINGS CARRIED OUT U/S 133A(1) ON 07.08.2007 AT THE BUSINESS PREMISES OF THE ASSESSEE , CERTAIN INCRIMINATING LOOSE PAPERS, DOCUMENTS, REGISTERS ET C. WERE FOUND. THE SAID DOCUMENTS WERE DULY IDENTIFIED IN THE PRESENCE OF SH. NARESH CHANDEY, FATHER OF SH. YUGANT CHANDEY WHO WAS PRES ENT IN THE HOTEL AT THE TIME OF SURVEY. THE STATEMENT OF SH. NARESH CHA NDEY WAS RECORDED ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 9 CONFRONTING ALL THE DOCUMENTS FOUND. THE INCRIMINAT ING DOCUMENTS INTER- ALIA INCLUDED FOUR BILLS ISSUED ON LOOSE SHEETS AND NOT FROM A BILL BOOK SERIALLY NUMBERED. THE SAID BILLS WERE ISSUED ON 05 .08.2007, ACCORDING TO WHICH 6 ROOMS WERE RENTED OUT ON 05.08.2007 BUT NO CORRESPONDING ENTRY WAS FOUND RECORDED IN THE GUEST REGISTER. WHE N CONFRONTED, SH. NARESH CHANDEY CATEGORICALLY ADMITTED THAT THE AMOU NT RECEIVED AS ROOM RENT AS PER THE SAID DOCUMENTS WAS NOT RECORDE D IN THE REGULAR BOOKS OF ACCOUNTS. SIMILARLY, A BOOKING VOUCHER ISS UED BY ONE M/S. TRAVEL POINT WAS FOUND ACCORDING TO WHICH ONE SH. O .P. GARODIA CHECKED IN TO THE HOTEL ON 27.10.2006 AND CHECKED OUT ON 29.10.2006, BUT NO CORRESPONDING ENTRY IN THIS REGARD WAS FOUND RECORDED IN THE GUEST INDEX. SH. NARESH CHANDEY FAILED TO OFFER ANY CONVINCING EXPLANATION IN RESPECT OF THE SAID OMISSION. FURTHE R, A REGISTER KNOWN AS 'QUITY' REGISTER WAS FOUND IN WHICH CATERING ORDERS RECEIVED FROM THE CUSTOMERS WERE FOUND RECORDED. BUT NO CORRESPONDING ENTRIES IN RESPECT OF THE RENT RECEIVED FROM BOOKING OF THOSE ROOMS WE RE FOUND RECORDED. SH. NARESH CHANDEY ADMITTED THAT ALMOST 1/3 RD OF THE INCOME WAS NOT BEING RECORDED IN THE REGULAR BOOKS OUT OF THE ROOM RENT RECEIVED IN OFF SEASON. THE ASSESSEE FAILED TO PRODUCE THE REGULAR BOOKS OF ACCOUNTS AND OTHER RELATED DOCUMENTS DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THEREFORE, ASSESSMENT WAS FRAMED U/S 1 44 OF THE I.T. ACT AND THE RENTAL INCOME OF THE ASSESSEE WAS DETERMINE D AT RS.9,42,000/- AFTER TAKING INTO CONSIDERATION THE STATEMENT OF SH . NARESH CHANDEY. FURTHER, DURING THE COURSE OF SURVEY OPERATION, IT WAS ALSO NOTICED THAT ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 10 THE BILLS FOR FOOD ITEMS WERE NOT BEING ISSUED TO T HE CUSTOMERS AND THE RECEIPTS FROM THE SALE OF FOOD ITEMS WERE BEING KEP T OUTSIDE THE REGULAR BOOKS OF ACCOUNTS. SINCE, THE ASSESSEE DID NOT PROD UCE ANY BOOKS OF ACCOUNTS ALONGWITH THE RELEVANT VOUCHERS AND BILL B OOKS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER ESTIMATED THE INCOME FROM THE SALE OF FOOD AND OTHER EATABLES AT RS.2 LACS U/S 144 OF THE INCOME TAX ACT, AS AGAINST THE INCOME DECLARED AT RS.40,661/- BY THE ASSESSEE. THE ASSESSING OFFICER IN THE ABSENCE OF BOOKS OF ACCOUNTS AND THE SUPPORTING BILLS AND VOUCHERS ALSO MADE A D ISALLOWANCE OF EXPENSES TO THE TUNE OF RS. 25,000/- OUT OF THE TOT AL EXPENSES CLAIMED BY THE ASSESSEE. 10. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), HO WEVER, REMAINED UNSUCCESSFUL. 11. BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS SUB MITTED THAT THE ADDITIONS MADE IN RESPECT OF THE ABOVE ISSUE WERE V ERY EXCESSIVE. THAT THE LD. ASSESSING OFFICER COMPUTED THE ALLEGED SUPP RESSED TURNOVER BY ESTIMATING THE ROOM OCCUPANCY FOR THE WHOLE YEAR AN D ROOM RATES AS PER HIS ESTIMATION. SIMILARLY, EXCESSIVE ESTIMATION HA S BEEN MADE IN RESPECT OF THE RESTAURANT BILLS. THE LD. COUNSEL FOR THE A SSESSEE HAS SUBMITTED THAT AS PER THE STATEMENT GIVEN BY THE MANAGER, ONL Y 1/3RD OF THE INCOME WAS BEING RECORDED IN THE REGULAR BOOKS OUT OF THE ROOM RENT RECEIVED IN OFF SEASON. THE LD. COUNSEL IN THIS RESPECT HAS SUB MITTED THAT HOTEL OF ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 11 THE ASSESSEE BEING SITUATED IN HILLY AREA, IS A SEA SONAL HOTEL AND THERE REMAINS LESS OCCUPANCY DURING THE WINTER SEASON. TH AT THE ESTIMATION OF THE INCOME BY THE ASSESSING OFFICER ON THE BASIS OF THE STATEMENT OF THE MANAGER FOR WHOLE OF THE YEAR WAS HIGHLY EXCESSIVE. HE HAS FURTHER PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUP REME COURT IN THE CASE OF CIT VS KHADER KHAN SONS (2013) 352 ITR 48 0 (SC) TO SUBMIT THAT THE STATEMENT OF THE MANAGER RECORDED DURING T HE SURVEY ACTION U/S 133A OF THE ACT DOES NOT CARRY ANY EVIDENTIARY VALU E. 13. ON THE OTHER HAND, THE LD. DR HAS RELIED ON TH E FINDINGS OF THE LOWER AUTHORITIES. 14. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO G ONE THROUGH THE RECORD. IN THIS CASE, THE ASSESSING OFFICER HAS BUI LT TWO FOLD CASE, FIRSTLY, THAT THE ACTUAL OCCUPANCY OF THE ROOMS WAS NOT RECORDED AND THAT ACTUAL RESTAURANT BILLS WERE NOT BOOKED. SECONDLY, THERE WERE LESS RATES BOOKED AS COMPARED TO THE ADMISSIBLE NET RATES. HE, ACCORDINGLY ESTIMATED THE ACTUAL INCOME OF THE ASSESSEE FROM RO OM RENT AND REFRESHMENT BILLS. HE ACCEPTING THE CONTENTION OF THE ASSESSEE HAS GIVEN AN ALLOWANCE FOR VACANCY FOR THE WHOLE YEAR AND NOT ONLY FOR THE OFF SEASON TO THE TUNE OF 40% OF THE TOTAL CAPACITY. S O FAR AS THE RATES ARE CONCERNED, THE ASSESSING OFFICER HAS TAKEN THE RATE S AS FIXED BY THE TOURISM DEPARTMENT, WHEREAS, THE PLEA OF THE ASSESS EE IS THAT THE ASSESSEE HAS RECORDED ACTUAL RATES. FURTHER, THE PL EA OF THE ASSESSEE IS ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 12 THAT THE AVERAGE RATE OF ROOM BOOKING IS RS. 300 P ER DAY. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE IS ALSO THAT EVEN THE RESTAURANT BILLS HAVE BEEN EXCESSIVELY ESTEEMED BY THE ASSESSING OFF ICER. HOWEVER, THE ASSESSING OFFICER HAS TAKEN NOTE OF THE RATES FIXED BY THE TOURISM DEPARTMENT AT RS. 1,000 /- TO RS. 1,100/- PER ROOM, HOWEVER, GIVING BENEFIT OF DOUBT TO THE ASSESSEE THAT SOMETIMES TH E ROOMS ARE BOOKED AT A LOWER RATE THAN THE RATES FIXED BY THE TOURISM DE PARTMENT, THE ASSESSING OFFICER, THEREFORE, HAS ADOPTED THE AVERA GE RATE OF RS. 600/- PER ROOM. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE IN THE ABOVE ORDER OF THE ASSESSING OFFICER SO FAR AS THE ESTIMA TION OF THE ROOM RENT IS CONCERNED. HOWEVER, THE ASSESSING OFFICER HAVING ESTIMATED THE ROOM RENT SHOULD HAVE GIVEN THE DEDUCTION OF THE EXPENDI TURE CLAIMED AT RS. 1,52,626/- ON WATER AND ELECTRICITY CHARGES AND RS. 45,000/- ON FOOD MATERIAL. THE ASSESSING OFFICER HAS ALLOWED ONLY RS . 1 LAC AGAINST THIS, WHICH DOES NOT SEEMS TO BE JUSTIFIED. WE, THEREFOR E, PARTLY ALLOW GROUND NO.7 AND DIRECT THE ASSESSING OFFICER TO GIV E DEDUCTION OF EXPENDITURE OF RS. 1,52,626/- PLUS RS. 45,000/- AS AGAINST RS. 1 LAC ALLOWED BY THE ASSESSING OFFICER. GROUND NO.7 OF THE APPEAL, THEREFORE, STANDS PARTL Y ALLOWED. SO FAR AS THE GROUND NO. 8 REGARDING THE RESTAURAN T INCOME IS CONCERNED, THE ASSESSING OFFICER HAS TAKEN THE REST AURANT INCOME AT RS. 600/- PER DAY, HOWEVER, CONSIDERING THE OVERALL FAC TS AND CIRCUMSTANCES, AND THE PLEA OF THE ASSESSEE THAT ON MOST OF THE DA YS HOTEL REMAINS ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 13 VACANT, THE RESTAURANT INCOME IS DIRECTED TO BE EST IMATED AT RS. 500/- PER DAY. THE ASSESSING OFFICER IS DIRECT TO RESTRICT TH E ADDITION ACCORDINGLY ON THIS ISSUE. 15. GROUND NOS. 9 TO 11 : NO ARGUMENTS WERE ADVANCED BY THE ASSESSEE IN RESPECT OF THESE GROUNDS, HENCE, THESE ARE DISMISSED AS NOT PRESSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED. ITA NO.496/CHD/2018 (A.Y.2007-08) 16. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) IN APPEAL NO. IT/205/CIT(A)/PLP/2012-13 DATED 28.06.2017 HAS ERRE D IN PASSING THAT ORDER IN CONTRAVENTION OF THE PROVISIO NS OF SECTION 250(6) OF THE INCOME TAX ACT, 1961. 2. THAT ON THE FACTS, LEGAL POSITION AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER PASSED BY WORTHY CIT(A) DE SERVES TO BE QUASHED AS A TOTALLY NON-SPEAKING ORDER WAS P ASSED AND FURTHER NO REASONABLE OPPORTUNITY WAS ALLOWED TO TH E ASSESSEE BEFORE DISMISSAL OF APPEAL. 3. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, T HE WORTHY JUSTIFIED IN CONFIRMING THE ACTION OF LD. AO FOR IM POSING THE PENALTY U/S 271(L)(C) OF THE ACT ON ADDITION OF RS . 18,54,476/- ON ACCOUNT OF INVESTMENT MADE FROM UNDISCLOSED SO URCES U/S 69 OF THE IT ACT EVEN WHEN THE SAID IMPOSITION OF PENALTY WAS NOT WARRANTED. ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 14 4. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE , THE WORTHY CIT(A) JUSTIFIED IN CONFIRMING THE ACTION OF LD. AO FOR IMPOSING THE PENALTY U/S THE ACT ON ADDITION OF RS. 9,42,000/- ON ACCOUNT OF INCOME FROM ROOM RENT EVEN WHEN THE S AID IMPOSITION OF PENALTY WAS NOT WARRANTED. 5. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, T HE WORTHY CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF LD. AO FOR IMPOSING THE PENALTY U/S 271(L)(C) OF THE ACT ON ADDITION OF RS. 1,59,339/- ON ACCOUNT OF FOOD AND RESTAURAN T SALE EVEN WHEN THE SAID-IMPOSITION OF PENALTY WAS NOT WARRANT ED. 6. THAT .ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITIO N OF THE CASE, THE IMPUGNED PENALTY ORDER DESERVES TO BE QU ASHED SINCE THE APPELLANT HAS NOT BEEN ANY SPECIFIC LIMB OF SEC. 271(L)(C ) IN THE SHOW CAUSE NOTICE, IN QUANTUM ASS ESSMENT ORDER AND ALSO IN THE PENALTY ORDER. 7. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION, D ELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 17. WE FIND THAT THIS APPEAL IS TIME BARRED BY 221 DAYS. HOWEVER, A SEPARATE APPLICATION FOR CONDONATION OF DELAY HAS B EEN FILED, WHEREIN, THE PLEA HAS BEEN TAKEN THAT THE IMPUGNED ORDER OF THE CIT(A) WAS NOT SERVED ON ANY AUTHORIZED PERSON OF THE ASSESSEE AN D SINCE THE ASSESSEE DID NOT RECEIVE A COPY OF THE ORDER, HENCE, THE ASS ESSEE WAS NOT AWARE OF PASSING OF THE ORDER WHICH RESULTED IN THE PRESENT DELAY. KEEPING IN VIEW THE SUBMISSIONS WHICH ARE ACCOMPANI ED BY THE AFFIDAVIT OF SHRI PARMAJIT CHANDEY, PARTNER OF THE ASSESSEE FIRM, THE DELAY IN FILING THE APPEAL IS HEREBY CONDONED. 18. A PERUSAL OF THE ORDER OF THE CIT(A) REVEALS TH AT THE SAME IS AN EX-PARTE AND NON-SPEAKING ORDER. NO DISCUSSION HAS BEEN MADE IN THE ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 15 ABOVE ORDER OF THE CIT(A) . MOREOVER, AFTER CONSID ERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HAVE GIVEN SOME RELIE F TO THE ASSESSEE IN RELATION TO THE QUANTUM ADDITIONS. IN VIEW OF THIS , THE MATTER IS RESTORED TO THE FILE OF THE CIT(A) FOR DECISION AFRESH IN AC CORDANCE WITH LAW AND AFTER DULY CONSIDERING THE FINDINGS GIVEN BY THIS T RIBUNAL WHILE DECIDING THE ASSESSEES QUANTUM APPEAL BEARING ITA NO. 772/ CHD /2012 RELATING TO ASSESSMENT YEAR 2007-08 . ITA NO. 485/CHD/2017 (A.Y.2008-09): 19. IN THIS APPEAL THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED AN AD DITION OF RS. 4,50,000/-ON ACCOUNT OF DISCREPANCIES IN ROO M RENT A/C WITHOUT PASSING ANY SPEAKING ORDER, WITHOUT PRO PER DISCUSSION OF OUR SUBMISSIONS MADE TAKING SUPPORT O F VARIOUS CASE LAWS. OUR SUBMISSIONS WERE SIMPLY RE-PRODUCED IN THE- BODY OF THE ORDER. 2. THAT THE LEARNED CIT(A) HAS WRONGLY UPHELD ADDITION TO THE EXTENT OF RS.50000/-ON A/C OF DISCREPANCIES FOUND I N THE FOOD SALE WITHOUT PASSING ANY SPEAKING ORDER AND WITHOUT DISCUSSION OF CASE LAWS RELIED UPON BY US IN OUR WR ITTEN SUBMISSIONS MADE. 3. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED DISAL LOWANCE OF RS. 15000/- ON ACCOUNT OF REASONS STATED AT PAGE NO.8 IN PARA NO.8 OF ASSESSMENT ORDER WITHOUT APPRECIATING OUR WRITTEN SUBMISSIONS. NO PROPER DISCUSSION HAS BEEN MADE IN THE BODY OF THE ORDER. SIMPLY OUR SUBMISSIONS HAVE BEEN REPRODUCED. 4. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED DISAL LOWANCE OF RS. 2000/-WITHOUT APPRECIATING OUR SUBMISSIONS A ND WITHOUT TAKING INTO ACCOUNT FACT THAT ALL DETAILS W ERE ON RECORD. ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 16 5. THAT THE APPELLANT CRAVES TO ADD, TO AMEND, TO DELE TE, TO WITHDRAW, TO MODIFY ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING OR DURING HEARING PERIOD. 6. THAT THE ORDER PASSED BY CIT(A) IS ILLEGAL, BAD IN LAW AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE 20. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT HE DOES NOT PRESS GROUND NOS. 3 & 4 OF THE APPEAL, THE SAME ARE, THEREFORE, DISMISSED AS NOT PRESSED. 21. GROUND NOS. 5 & 6 ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUNCTION. 22. NOW WE ARE LEFT WITH ONLY GROUND NOS. 1 & 2 . VIDE GROUND NO.1 THE ASSESSEE HAS AGITATED THE ADDITION OF RS. 4,50, 000/- MADE ON ACCOUNT OF DISCREPANCY IN ROOM RENT, WHEREAS, VIDE GROUND N O.2, THE ASSESSEE HAS AGITATED THE ACTION OF THE CIT(A) IN CONFIRMING THE ADDITION TO THE EXTENT OF RS. 50,000/- ON ACCOUNT OF DISCREPANCIES FOUND IN THE FOOD SALE. SO FAR AS GROUND NO.1 IS CONCERNED, IN VIEW OF OUR FINDINGS GIVEN ABOVE, WE DIRECT THAT THE ROOM RENT BE ESTIMATED AF TER GIVING BENEFIT OF THE EXPENDITURE INCURRED AS DIRECTED WHILE DECIDING GROUND NO. 7 OF THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2007-08. ITA NOS. 772-C-12, 485-C-17 & 496-C-18- M/S OAK VALLEY RESIDENCY, CHAMBA 17 SO FAR AS GROUND NO. 8 IS CONCERNED, OUT OF THE TOT AL ADDITION MADE BY THE ASSESSING OFFICER OF RS. 1 LAC, THE LD. CIT(A), AFTER GIVING BENEFIT OF THE EXPENDITURE, HAS RESTRICTED THE ADDI TION TO RS. 50,000/- . WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CI T(A), IN THIS RESPECT AND THE SAME IS ACCORDINGLY UPHELD. IN THE RESULT THIS APPEAL OF THE ASSESSEE STANDS PA RTLY ALLOWED. ACCORDINGLY, ITA NOS. 772/CHD/2012 AND ITA NO.496/ CHD/2018 ARE PARTLY ALLOWED, WHEREAS, ITA NO. 485/CHD/2017 I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.02.2020. SD/- SD/- ( . . / N.K. SAINI) ( / SANJAY GARG) !'# / VICE PRESIDENT $% / JUDICIAL MEMBER DATED : 27.02 2020 .. 2*&)3454) / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. &' '$ / THE RESPONDENT 3. , 6) / CIT 4. , 6) ( )/ THE CIT(A) 5. 47 &)8 , . 8 , 9:;< / DR, ITAT, CHANDIGARH 6. ;= - / GUARD FILE 2 , / BY ORDER, > / ASSISTANT REGISTRAR
Other Referred Cases
-
Laws Referred To
-
360 Brand Audit (30 mins)
₹299
1:1 Consultation on Startup Fundraising
₹5000
1:1 Consultation on Salary Structuring
₹1
CRM Implementation Plan
₹0
HUF Deed
Mehul₹500
SEBI Resets Mutual Fund Rules: A Structural Shift for Investors
Team Counselvise - March 13, 2026
Why Meesho got ₹1,500 Crore Tax Demand ?
Team Counselvise - March 09, 2026
When Global Talent Meets GST: The Huawei Secondment Ruling explained
Team Counselvise - March 09, 2026