Income Tax Officer-I, Shahjahanpur V. M/s Mishra Aloo Bhandar Grah (P) Ltd., Shahjahanpur

ITA 827/LKW/2008

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87756 (ITAT-LUCKNOW)
• Duration Of Justice: 6 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-01-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 24-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Valuation report; Reason to believe; Reassessment proceedings
• Section: 142(1); 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.827/LKW/2008 ASSESSMENT YEAR:2000 - 01 M/S MISHRA ALOO BHANDAR GRAH (P) LTD., PIPROLA, SHAHJAHANPUR. PAN:AADCM6969L VS INCOME TAX OFFICER - I, WARD - 1, SHAHJAHANPUR. (RESPONDENT) (APPELLANT) C.O.NO.69/LKW/2008 (IN ITA NO.827/LKW/2008) ASSESSMENT YEAR:2000 - 01 INCOME TAX OFFICER - I, WARD - 1, SHAHJAHANPUR. VS M/S MISHRA ALOO BHANDAR GRAH (P) LTD., PIPROLA, SHAHJAHANPUR. PAN:AADCM6969L (RESPONDENT) (APPELLANT) SHRI AMIT NIGAM, D. R. REVENUE BY SHRI ABHINAV MEHROTRA, ADVOCATE ASSESSEE BY 06/01/2015 DATE OF HEARING 12 /02/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT(A), BAREILLY DATED 02/09/2008 FOR ASSESSMENT YEAR 2000 - 01. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION ARE AS UNDER: 1(A) THAT IN DOING SO, THE LD CIT(A), TOOK NOTE OF THE AMENDMENT MADE BY THE FINANCE (NO.2) ACT, 2004, INTRODUCING SECTION 142A ON THE STATUTE BOOK, AS THE 2 SAME WAS BROUGHT TO HIS NOTICE THROUGH GROUND NO. 8, AS APPEARING IN THE O RDER OF LD. CIT(A). 1(B) THAT, EVEN THEREAFTER, THE LD CIT(A), CHOSE TO DECIDE THE APPEAL, IN FAVOR OF THE ASSESSEE, IN LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SMT. AMIYA BALA PAUL, 262 ITR 407 (SC). 2. THAT, IT IS A SETTLED POSITION OF LAW THAT REASSESSMENT, CANNOT BE VALIDLY INITIATED ONLY ON THE BASIS OF DVO'S REPORT, SINCE THE REASONS', AS RECORDED DO NOT LEAD TO THE FORMATION BELIEF, THAT THERE WAS ANY ESCAPEMENT OF INCOME. 2(B) THAT, IT IS A CASE OF A MERE CHANGE OF OP INION, WHICH IS NOT PERMISSIBLE/SUFFICIENT TO INITIATE REASSESSMENT PROCEEDINGS, AS HELD BY THE VARIOUS HON'BLE HIGH COURTS AND HON'BLE TRIBUNALS. 3. THAT, NOTWITHSTANDING THE ABOVE, THE REFERENCE TO THE DVO, IF ANY, IN LIGHT OF THE NEW PROVISION, I.E. SE CTION 242A, CANNOT BE MADE IN THE CASE OF FINAL ASSESSMENT. 4. THAT IN THE LIGHT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V RAJ KUMAR, THE VALUATION SHOULD BE MADE ON THE BASIS OF UPPWD RATES, RATHER THAN CPWD RATES, AS ADOPTED BY THE DVO, FURTHER THE NATIONAL HORTICULTURE BOARD HAD CONSIDERED THE INVESTMENT MADE IN THE BUILDING, AT A COST LOWER THAN THAT SHOWN IN THE BOOKS OF ACCOUNT BY THE ASSESSEE AND ACCORDINGLY CAPITAL SUBSIDY HAS BEEN GRANTED. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE AMOUNT OF RS.18,31,110/ - WHICH WAS ADDED BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT IN COLD STORAGE BUILDING , AS THE AS SESSEE HAS DECLARED THAT INVESTMENT MADE IN COLD STORAGE BUILDING AT RS.29,58,390/ - AND THE DEPARTMENTAL VALUATION OFFICER DETERMINED TOTAL VALUATION OF THE SAID BUILDING AT RS.47,89,500/ - IN RESPONSE TO COMMISSION ISSUED U/S 131(1)(D) OF THE I.T. ACT,1961 BY THE ASSESSING OFFICER. THE ORDER OF THE LEARNED CIT (APPEALS) 3 IS ERRONEOUS IN LAW AND ON FACTS, AS THE ASSESSING OFFICER HAS RIGHTLY ISSUED COMMISSION U/S 131(1)(D) AND HAS RIGHTLY MADE AN ADDITION OF RS.18,31,110/ - TO THE TOTAL INCOME OF THE ASSESSEE AS AGAINST NIL INCOME SHOWN BY THE ASSESSEE IN ITS RETURN OF INCOME. 2. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS IN LAW AND ON FACTS MAY BE SET - ASIDE AND THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A) REGARDING THE APPEAL OF REVENUE AND REGARDING THE C.O., HE REITERATED THE SAME CONTENTIONS WHICH WERE MADE BEFORE CIT (A ). HE ALSO SUBMITTED THAT THE REASONS RECORDED BY THE ASSESSING OFFICER ARE AVAILABLE ON PAGE NO. 2 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT IN THIS REASON, IT IS NOTED THAT IN COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2001 - 2002, IT HAS CO ME TO THE NOTICE OF THE DEPARTMENT THAT THE ASSESSEE COMPANY HAS INVESTED RS.47,89,500/ - AS AGAINST RS.29,58,390/ - SHOWN BY THE ASSESSEE FOR ASSESSMENT YEAR 2000 - 2001 FOR CONSTRUCTION OF COLD STORAGE. THE ASSESSING OFFICER FURTHER NOTED IN THE REASONS THA T BECAUSE OF THIS, HE HAS REASON TO BELIEVE THAT UNDISCLOSED INVESTMENT OF RS.18,31,110/ - HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. HE SUBMITTED THAT IN ASSESSMENT YEAR 2001 - 02, IT WAS HELD BY THE TRIBUNAL THAT THE REFERENCE TO D.V.O. IS NOT VALID. HE PLACED RELIANCE ON THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF ACIT VS. DHARIYA CONSTRUCTION CO. [2010] 328 ITR 515 (SC). 5. IN THE REJOINDER, IT WAS SUBMITTED BY LEARNED D.R. OF THE REVENUE THAT THE COPY OF ORIGINA L ASSESSMENT ORDER DATED 31/03/2004 IS AVAILABLE ON PAGE 25 OF THE PAPER BOOK AND FROM THE SAME, IT CAN BE SEEN THAT THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE VARIOUS DETAILS AND BOOKS OF ACCOUNT 4 AS PER NOTICE ISSUED U/S 142(1) ON 27/01/2003 BUT NO COMPLIANCE OF THIS NOTICE HAS BEEN MADE AND THEREFORE, THE ASSESSING OFFICER HAS REFERRED THE MATTER TO D.V.O. ON 11/09/2003. HE SUBMITTED THAT WHEN THE BOOKS ARE NOT PRODUCED, THE SAME CAN BE REJECTED BY THE ASSESSING OFFICER AND HENCE, THIS JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF DHARIYA CONSTRUCTION CO. (SUPRA) IS NOT APPLICABLE IN THE PRESENT CASE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE REOPENING IN THE PRESENT CASE HAS BEEN MADE ON THE BASIS OF REFERENCE TO D.V.O. IN ASSESSMENT YEAR 2000 - 2001. AS PER THIS JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF DHARIYA CONSTRUCTION CO. (S UPRA), THE OPINION GIVEN BY THE ASSESSING OFFICER IS NOT PER SE INFORMATION FOR THE PURPOSE OF REOPENING AN ASSESSMENT UNDER SECTION 147 OF THE INCOME - TAX ACT, 1961. THE ARGUMENT OF LEARNED D.R. OF THE REVENUE THAT BOOKS WERE NOT PRODUCED AND THEREFORE, I T COULD NOT HAVE BEEN REJECTED BY THE ASSESSING OFFICER IS NOT VALID BECAUSE THAT CAN BE RELEVANT IF THIS IS THE ARGUMENT OF THE ASSESSEE THAT REFERENCE TO D.V.O. HAS BEEN MADE WITHOUT REJECTING BOOKS OF ACCOUNT AND THEREFORE NOT VALID , AS HAS BEEN HELD BY HON'BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT [2010] 328 ITR 513 (SC). IN THE PRESENT CASE, THE ARGUMENT OF LEARNED A.R. OF THE ASSESSEE IS THAT THE REOPENING ON THE BASIS OF D.V.O. REPORT ALONE CANNOT BE SAID TO BE VALID. AS PER THE REASONS R ECORDED BY ASSESSING OFFICER, AS APPEARING ON PAGE NO. 2 OF THE PAPER BOOK, THIS IS ONLY REASON RECORDED BY THE ASSESSING OFFICER THAT IT HAS COME TO THE NOTICE OF THE DEPARTMENT THAT THE ASSESSEE COMPANY HAS INVESTED RS.47,89,500/ - AS AGAINST RS.29,58,390 / - SHOWN BY THE ASSESSEE . AS PER THE COPY OF THE ASSESSMENT ORDER FOR THE PRESENT YEAR, IT IS NOTED BY THE ASSESSING OFFICER ON PAGE NO. 2 THAT THE ASSESSEE HAS MADE INVESTMENT IN CONSTRUCTION OF BUILDING OF COLD STORAGE AMOUNTING TO RS. 29,58,390/ - IN THE ASSESSMENT YEAR 2000 - 2001 BUT SUPERINTENDENT ENGINEER (CIVIL) DISTRICT VALUATION OFFICER, KANPUR VIDE HIS VALUATION REPORT DATED 19/03/2004 HAS ESTIMATED THE 5 INVESTMENT MADE IN THE CONSTRUCTION OF THE COLD STORAGE BUILDING FOR ASSESSMENT YEAR 2000 - 20012 F OR RS.47,89,500/ - HENCE, IT IS CLEAR THAT THE ONLY BASIS OF REOPENING OF THE ASSESSMENT IS THE REPORT OF D.V.O. AND THEREFORE, THE SAME IS NOT VALID AS PER THIS JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF DHARIYA CONSTRUCTION CO. RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE APEX COURT, WE HOLD THAT THE REOPENING IS NOT VALID. AS A CONSEQUENCE, THE ADDITION MADE BY THE ASSESSING OFFICER CANNOT SURVIVE. AS A RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE HAVE BECOME INFRUCT UOUS AND ARE LIABLE TO BE DISMISSED. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12 /02/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR