Dy. Commissioner of Income Tax, Lucknow V. M/s. Salarpur Cold Storage (P) Ltd., Barabanki

ITA 84/LKW/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0575 (ITAT-LUCKNOW)
• Duration Of Justice: 4 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 19-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR MISHRA
• Assessee Lawyers: S C AGARWAL
• Keywords: Unexplained investment; Income from undisclosed sources; Loose papers; Opportunity of being heard; Additional evidence; Valuation report; Assessment record; Reason to believe
• Section: 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. T. S. KAPOOR , ACCOUNTANT MEMBER ITA NO. 84 & 606/ LKO /2013 ASSESSMENT YEAR: 2004 - 05 & 2009 - 10 DCIT RANGE V LUCKNOW V. M/S SALARP UR COLD STORAGE (P) LTD. 1467, VILL. KURAULI, POST GANDHI ASHRAM LUCKNOW ROAD, BARABANKI T AN /PAN : AAJCS0942B (APP ELL ANT) (RESPONDENT) C.O. NO.5 & 6/LKW/2016 [ARISING OUT OF ITA NO. 84 & 606/DEL/2013] ASSESSMENT YEAR: 2004 - 05 & 2009 - 10 M/S SALARPU R COLD STORAGE (P) LTD. 1467, VILL. KURAULI, POST GANDHI ASHRAM LUCKNOW ROAD, BARABANKI V. DCIT RANGE V LUCKNOW ( CROSS - OBJECTOR ) (RESPONDENT) DEPARTMENT BY: SHRI AJAY KUMAR MISHRA, D.R. ASSESSEE BY: SHRI S.C. AGARWAL, ADVOCATE DATE OF HEARING: 04 12 201 7 DATE OF PRONOUNCEMENT: 08 12 201 7 O R D E R PER BENCH : THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - GROUNDS RAISED IN ITA NO.84/LKW/2013: ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 2 1 . THE CIT(A) HAS E RRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE A DDITION MADE BY THE A.O. OF RS.50,06,500/ - U/S 68 OF THE IT ACT ON ACCOUNT OF SHARE CAPITAL INTRODUCED DURING THE YEAR. HE FAILED TO APPRECIATE THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY & CREDIT WO RTHINESS OF THE ALLOTTEES AND ALSO FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION. 2 . THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE A DDITION MADE BY THE A.O. OF RS. 37,84,000 / - U/S 68 OF THE INCOME - TAX ACT ON ACCOUNT OF SHARE APPLICA TION MONEY RE CEIVE D DURING THE YEAR. HE FAILED TO APPRECIATE THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY & CREDIT WORTHINESS OF THE ALLOTTEES AND ALSO FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION. 3 . THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CA SE IN ADMITTING ADDITIONAL E VIDENCE ON THE ABOVE ISSUES WITHOUT FOLLOWING THE PROCEDURE AS PRESCRIBED IN RULE 46A OF T H E IN COME - TAX RULE. HIS ORDER IS THEREFORE BAD IN LAW AND DESERVES BE OVERRULED. 4 . THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN D ELETING THE A DDITION MADE BY THE A.O. OF RS. 9,41,873/ - ON ACCOUNT OF SUPPRESSING OF INVESTMENT IN COLD STORAGE BEING THE DIFFERENCE BETWEEN INVESTMENT DETERMINED BY THE DVO & THE INVESTMENT DURING THE FINANCIAL YEAR REPORTED BY THE ASSESSEE. HE FAILED TO A PPRECIATE THAT THE ASSESSEE COULD NOT PRODUCE EVIDENCE IN SUPPORT OF THE ENTIRE INVESTMENT CLAIMED BY HIM. GROUNDS RAISED IN ITA NO. 606 /LKW/2013: ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 3 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,20,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 2. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,00,000 / - AS INCOME FROM UNDISCLOSED SOURC ES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 3. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5,00,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND D OCUMENTS. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,10,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 5. THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.20,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 6 . THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,75,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 7 . THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5,00,000 / - AS IN COME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 8. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN JAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,75,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASI S OF IMPOUNDED PAPERS AND DOCUMENTS. ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 4 9. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2,00,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 10. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.7,50,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 11. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRE D IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 2,21,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 12. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,00,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 13. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,00,000 / - AS INCOME FROM UNDISCLOSED SOU RCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 14. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,00,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND D OCUMENTS. 15. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,00,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 16. THE LD. COMMISSIO NER OF INCOME TAX ( APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF IS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 5 17. THE LD. COMMIS SIONER OF INCOME TAX( APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDI TION OF RS.68,335/ - INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 18. THE LD. COMM ISSIONER OF INCOME TAX( APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.36,000/ - INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 19. THE LD. COMM ISSIONER OF INCOME TAX( APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,56,000/ - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCU MENTS. 20. THE LD . COMMISSIONER OF INCOME TAX( APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,84,000/ - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 21. THE LD. COMMISSIONER OF INCOME TAX(A PPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.75,000/ - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 22. THE LD. COMMISSIONER OF INCOME TAX( APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.8,58,100/ - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 23. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2,00, 000 / - AS INCOME FROM UN DISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 24. THE LD COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6,00, 000 - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 6 2 5. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 3,00,000/ - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 26. THE LD. COMMISSIONER O F INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF BS. 1,52,000 / - AS INCOME F ROM UNDISCLOSED SOURCES MADE ON TH E BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 27. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON F ACTS IN DELETING THE ADDITION OF RS.94,000 / - AS INCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 2 8. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.L 11, 000/ - AS I NCOME FROM UNDISCLOSED SOURCES MADE ON THE BASIS OF IMPOUNDED PAPERS AND DOCUMENTS. 29. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN ADMITTING THE ADDITIONAL FENCE IN VIOLATION O F RULE 46A OF IT RULES, 1962 WITHOUT GIVING AN OPPORT UNITY TO ASSESSING OFFICER EX AMINE AND CROSS VERIFY THE EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THE CIT(A). 30. LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,06,327 / - AS UNDISCLOSED INVESTMENT U/S 6 9B OF INCOME TAX ACT, 1961 MADE ON BASIS OF RENT REGISTER IMPOUNDED DURING SURVEY EARNED OUT U/S 133A OF INCOME TAX AC T , 1961. 31. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY ONE OR MORE OF THE GROUNDS OF APPEALS, AS STATED ABOVE, AS AND WHEN NEED TO DO SO ARISE WITH THE PRIOR PERMISSION OF THE COURT. ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 7 2 . THE ASSESSEE HAS ALSO FILED CROSS OBJECTION ASSAILING THE VALIDITY OF REOPENING IN ASSESSMENT YEAR 2004 - 05 AND ALSO IN SUPPORT OF ORDER OF THE LD. CIT(A) IN ASSESSMENT YEAR 2009 - 10. 3 . WE, HOWEVER, FOR TH E SAKE OF REFERENCE , EXTRACT THE GROUNDS RAISED IN THE CROSS OBJECTIONS: - GROUNDS RAISED IN CO NO.05/LKW/2016: - 1. THAT THE INITIATION OF PROCEEDINGS U/S 148 BY THE LD. A.O. WAS BEYOND JURISDICTION. 2. THAT THE LD. A.O. DID WRONG IN INVOKING SECTION 147 OF THE INCOME TAX ACT ON THE BASIS OF VALUATION REPORT OF DVO OBTAINED FOR ASSESSMENT YEAR 2008 - 09. 3. THAT THE OPINION OF DVO DOES NOT CONSTITUTE 'INFORMATION' FOR THE PURPOSE OF ASSESSMENT U/S 147 RENDERING THE ASSESSMENT ORDER INVALID. 4. THAT THE LD. A.O . WAS NOT HAVING 'REASON TO BELIEVE' AS REQUIRED UNDER THE LAW TO INITIATE PROCEEDINGS FOR ESCAPEMENT OF INCOME. 5. THAT ASSESSMENT ORDER IS UNTENABLE IN LAW FOR NOT OBTAINING SANCTION U/S 151(2) OF THE INCOME TAX ACT INASMUCH AS THERE IS NO MENTION OF IT IN THE ASSESSMENT ORDER OR IN THE ORDER SHEET. 6. THAT THE ASSESSMENT ORDER IS UNTENABLE IN LAW AND LIABLE TO BE CANCELLED AS BARRED BY LIMITATION. GROUNDS RAISED IN CO NO.0 6 /LKW/2016: - 1. THAT THE LD. CIT(A) ACTED JUDICIOUSLY IN HOLDING THAT THERE WAS NO FRESH EVIDENCE AS SUCH BY THE ASSESSEE DURING COURSE OF APPELLATE PROCEEDINGS IN AS MUCH AS THE EXPLANATION FILED ARE BORNE OUT OF LOOSE PAPERS FOUND DURING THE COURSE OF SURVEY AND ADDITIONS WERE MADE ON THOSE BASIS THEREOF. ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 8 2. THAT THE LD. CIT(A) WAS JU STIFIED IN OBTAINING REMAND REPORT FROM LD. AO ON THE BASIS OF EXPLANATION FILED BY THE ASSESSEE BEFORE HIM AND HENCE WAS RIGHT IN CONSIDERING THE REMAND REPORT BEFORE PASSING THE APPELLATE ORDER. 3. THAT THE LD. CIT(A) IS CORRECT IN ADJUDICATING THE ISSUE S ARISING OUT OF PAPERS MARKED LP - 20 ON THE BASIS OF EVIDENCE AVAILABLE ON EACH POINT SEPARATELY. 4. THAT THE LD. CIT(A) WAS CORRECT IN DECIDING THE APPEAL AFTER CONSIDERING THE EVIDENCES/ VOUCHERS (LP - 20) FOUND DURING THE COURSE OF SURVEY. 4 . BOTH THE CROSS OBJECTIONS ARE FILED LATE. IN ASSESSMENT YEAR 2004 - 05, THE DELAY IN FILING IS 1137 DAYS AND IN ASSESSMENT YEAR 2009 - 10 THE DELAY IN FILING IS 974 DAYS. THE REASON FOR THE DELAY WAS STATED TO BE ON THE LEGAL ADVICE OF THE PROFESSIONALS. AS PER APPLICATI ON FOR CONDONATION OF DELAY, THE LD. A.R. OF THE ASSESSEE HAS TRIED TO MAKE OUT A CASE THAT HE WAS ADVISED BY HIS COUNSEL NOT TO FILE APPEAL OR CHALLENGE THE ORDER OF THE LD. CIT(A) AS HE HAS WON THE CASE FROM THE FIRST APPELLATE AUTHORITY. LATER ON , WHEN THE APPEAL WAS FILED BY THE REVENUE, HE WAS AGAIN ADVISED NOT TO FILE CROSS OBJECTION BEFORE THE T RIBUNAL AND WAIT FOR HEARING. THE REASONS FOR DELAY IN FILING THE CROSS OBJECTIONS , AS STATED BY THE ASSESSEE , DO NOT APPEAR TO BE P LAU SIBLE. SINCE BEGINNI NG HE HAS BEEN PROPERLY ADVISED BY THE LEGAL PROFESSIONALS. THE APPEAL BEFORE THE LD. CIT(A) WAS ARGUED BY HIS COUNSEL, SHRI SANJEEV RASTOGI, FCA. MOREOVER, FOR ILL ADVICE OF PROFESSIONALS , NO ACTION WAS TAKEN BY THE ASSESSEE AGAINST THE CONCERNED PROFES SIONAL TILL DATE. IT IS VERY STRANGE TO NOTE THAT THESE APPEALS WERE FILED BY THE REVENUE IN 2013 AND ASSESSEE HAS CHOSEN TO FILE CROSS OBJECTIONS IN 2016 AFTER AROUND THREE YEARS. SINCE WE ARE NOT CONVINCED WITH THE REASONS FOR THE DELAY IN FILING OF TH E CROSS OBJECTION, WE DECLINE TO ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 9 CONDONE THE DELAY. ACCORDINGLY, THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE BARRED BY LIMITATION AND WE DISMISS THE SAME. 5 . SO FAR AS REVENUES APPEALS ARE CONCERNED, WE WILL DEAL WITH THE APPEALS ONE AFTER THE OTHER. ITA NO. 84/LKW/201 3 : 6 . IN THIS APPEAL, FIRST TWO GROUNDS RELATE TO THE INTRODUCTION OF SHARE CAPITALS AND THIRD GROUND RELATES TO THE VIOLATION OF THE PROVISIONS OF RULE 46A OF THE RULES. IN THIS REGARD, THE LD. A.R. OF THE ASSESSEE HAS CONTENDED THAT THE ASSES SEE HAS FILED CONFIRMATION LETTERS OF THE SHARE APPLICANTS WITH REGARD TO THE CORRECTNESS AND GENUINENESS OF THE TRANSACTIONS, ETC. THE LD. CIT(A) EXAMINED THE SAME AND DELETED THE ADDITION. 7 . THE LD. D.R. DURING THE COURSE OF HEARING HAS INVITED OUR ATTE NTION THAT BEFORE THE LD. CIT(A) ASSESSEE HAS FILED ADDITIONAL EVIDENCE AND ADDITIONAL EVIDENCE WAS NEVER CONFRONTED TO THE ASSESSING OFFICER AND THE LD. CIT(A) HAVING RELIED UPON THE ADDITIONAL EVIDENCE HAD DELETED THE ADDITION . T HEREFORE, THERE IS VIOLA TION OF THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES . 8 . THE LD. A.R. OF THE ASSESSEE HAS CONTENDED THAT SINCE THE ASSESSEE HAS FILED AN ADDITIONAL VIDENCE BEFORE THE LD. CIT(A) AND AS PER PROVISIONS OF THE ACT , THE LD. CIT(A) IS COMPETENT TO EXAMINE EV IDENCE FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS. THEREFORE, THE ORDER OF THE LD. CIT(A) CANNOT BE DISTURBED ONLY FOR THE REASON THAT ASSESSING OFFICER WAS NOT AFFORDED OPPORTUNITY TO EXAMINE THE EVIDENCE FILED BY THE ASSESSEE. ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 10 9 . HAVI NG CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY ASSESSEE HAS FILED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) AND THE LD. CIT(A) INSTEAD OF CALLING A REMAND REPORT FROM THE ASSESSING OFF ICER HAS RELIED UPON THE SAME AND DELETED THE ADDITIONS. AS PER PROVISIONS OF RULE 46A, IF ANY ADDITIONAL EVIDENCE IS FILED BEFORE THE LD. CIT(A), THE LD. CIT(A) IS UNDER OBLIGATION TO CONFRONT THE SAID ADDITIONAL EVIDENCE TO THE ASSESSING OFFICER EITHER FOR HIS COMMENTS OR FOR THE REMAND REPORT, BUT IN THE INSTANT CASE, ADMITTEDLY ADDITIONAL EVIDENCE WAS FILED, BUT THE LD. CIT(A) DID NOT MAKE ANY EFFORT TO EITHER CALL FOR REMAND REPORT FROM THE ASSESSING OFFICER OR ATLEAST TO SEEK HIS COMMENTS IN THIS REG ARD. IN THE ABSENCE OF ANY OPPORTUNITY TO THE ASSESSING OFFICER, THE ACTION OF THE LD. CIT(A) APPEARS TO BE IN VIOLATION OF THE PROVISIONS OF RULE 46A OF THE RULES . UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE MATTER BE SET ASIDE AND RESTORED T O THE LD. CIT(A) WITH DIRECTION TO RE - EXAMINE ADDITIONAL EVIDENCE AFTER CONFRONTING THE SAME OR CALLING FOR REPORT FROM THE ASSESSING OFFICER. ACCORDINGLY , GROUNDS NO.1 TO 3 ARE DISPOSED OF. 10 . SO FAR AS GROUND NO.4 IS CONCERNED, WE FIND THAT THE ASSESSING O FFICER HAS MADE ADDITION OF RS.9,41,873/ - ON THE BASIS OF DVOS REPORT. A REFERENCE WAS MADE TO THE DVO FOR ASCERTAINING THE COST OF INVESTMENT IN THE COLD STORAGE BUILDING AND ACCORDINGLY DVO ESTIMATES THE COST AT RS.1,47,66,873/ - AGAINST THE DECLARED IN VESTMENT OF RS.1,38,25,000/ - . WITHOUT ALLOWING ANY FURTHER REBATE, THE ASSESS ING OFFICER HAS MADE ADDITION OF THE DIFFERENCE AMOUNT OF RS. 9,41,873/ - AND MADE ADDITION OF THE SAME AS UNEXPLAINED INVESTMENT. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT VALUATION OF THE BUILDING WAS MADE BY THE DVO TAKING INTO ACCOUNT CPWD RATES AND OTHER FACT S THAT THE BUILDING WAS CONSTRUCTED UNDER SELF - SUPERVISION OF THE DIRECTOR OF THE COMPANY AT A PLACE DEVA ROAD, ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 11 BARABANKI WHICH IS A RURAL AREA IN WHICH CONSTRUCTION LABOUR WAS EASILY AVAILABLE AND BUILDING MATERIALS WERE SELF - PURCHASE D BY THE COMPANY, THUS REDUCING THE COST OF CONSTRUCTION OF BUILDING TO THAT EXTENT WAS NOT CONSIDERED BY HIM . IT WAS FURTHER CONTENDED THAT THE PROJECT WAS FINANCED BY BANK OF INDIA, SAFEDABAD, BARABANKI AND THE BANK DISBURSED TERM LOANS TO THE COMPANY IN STAGES AFTER MONITORING THE PROGRESS OF CONSTRUCTION WITH DUE VERIFICATION AND DEPOSITING OF BILLS AND VOUCHERS WITH THEM, AND DUE TO THIS REASON THE AS SESSEE COULD NOT PRODUCE ALL THE BILLS AND VOUCHERS TO THE ASSESSING OFFICER. THE LD. CIT(A) RE - EXAMINED THE CLAIM OF THE ASSESSEE IN THE LIGHT OF HIS SUBMISSIONS AND HAVING APPRECIATED THE EVIDENCE FILED BY HIM, DELETED THE ADDITIONS HAVING OBSERVED THAT MINOR DIFFERENCE OF RS.9,41,873/ - WHICH IS 6.4% OF THE COST ESTIMATED BY THE DVO IS LIABLE TO BE IGNORED AS PER CASE LAW REFERRED IN THE ORDER . W HILE DELETING THE ADDITION, HE HAS PLACED RELIANCE UPON OTHER ORDERS OF THE TRIBUNAL AND THE HIGH COURT WHERE IT WAS HELD THAT IF THE DIFFERENCE WAS LESS THAN 10%, IT SHOULD BE IGNORED. THE RELEVANT OBSERVATION OF THE LD. CIT(A) IS EXTRACTED HEREUNDER: - 5(3) I HAVE EXAMINED THE FACTS AND CIRCUMSTANCES OF THE CASE. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER IN THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. I HAVE ALSO CALLED FOR AND EXAMINED THE ASSESSMENT RECORDS IN THE CASE. I FIND THAT THE DVO ESTIMATED THE COST OF CONSTRUCTION OF FACTORY BUILDING VIDE REPORT DATED 15.12.2009 AT R S.1,65,11,800/ - AS AGAINST RS. 1,51,25,000 / - SHOWN BY THE ASSESSEE. FOR THE ASSESSMENT YEAR 2004 - 2005 I.E. YEAR UNDER CONSIDERATION, THE DVO ESTIMATED THE COST OF CONSTRUCTION OF FACTORY BUILDING AT R S. 1,50,92,6007 - AS AGAINST RS. 1,38,25,000/ - SHOWN BY TH E ASSESSEE IN ITS BOOKS OF ACCOUNTS. THE COST OF CONSTRUCTION WAS REVISED DOWN BY DVO BY AN AMOUNT OF RS. 3,56,330/ - ON ACCOUNT OF ERROR IN AREA MEASUREMENT AS REPORTED BY REPORT DATED 08.03.2011, ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 12 MAKING THE COST OF CONSTRUCTION AS RS. 1,47,66,873/ - . THE DI FFERENCE BETWEEN THE COST OF CONSTRUCTION ESTIMATED BY THE DVO AND THA T SHOWN BY THE APPELLANT IS RS. 9, 41,873/ - . THE DIFFERENCE OF RS. 9,41,873/ - IS 6.4% OF THE COST OF CONSTRUCTION ESTIMATED BY THE DVO. 5(4) MOREOVER, IT ALSO SUFFICES TO SAY THAT THE RATES ADOPTED BY THE DVO ARE CPWD RATES WHEREAS AS PER DECISIONS IN THE CASE OF CIT VS RAJ KUMAR, (1990)182 ITR 436 (ALLAHABAD); CIT VS SMT. PREM KUMARI MURDIA, (2008)296 ITR 508(RAJ.) CIT VS. DINESH TALWAR, (2004)265 ITR 344(RAJ.), THE RATES TO BE CONSIDERED A RE UPPWD RATES. FURTHER SINCE THE COST DETERMINED BY THE DVO IS ESTIMATION, A MINOR DIFFERENCE OF 10% IS USUALLY IGNORED AS LAID DOWN IN THE CASE OF ITO VS. SMT. PRAMILA AGARWAL REPORTED IN (2004) 88 TTJ (LUCK) 91 AND CIT VS. ABESSON HOTELS (P) LTD. REPORT ED IN (2004)191 CTR (MP) 263. IN VIEW OF ABOVE, THE MINOR DIFFERENCE OF RS. 9,41,873 / - , WHICH IS 6.4% OF THE COST ESTIMATED BY THE DVO IS LIABLE TO BE IGNORE AS PER C ASES SUPRA. THE ADDITION OF RS. 9,41,873/ - MADE BY THE AO IS DELETED GIVING RELIEF TO THE A PPELLANT. THE GROUND OF APPEAL IS ALLOWED. 11 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT UNDISPUTEDLY THE DIFFERENCE IN THE DECLARED COST AND ESTIMATED COST IS LESS THAN 10%, THEREFORE, THERE IS NO VALID REASON FOR REJECTION OF THE INVESTMENT SHOWN BY THE ASSESSEE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND WE CONFIRM THE SAME. ITA NO.606/ LKW/201 3 : 12 . THOUGH VARIOUS GROUNDS ARE RAISED IN THIS APPEAL, BUT DURING THE COURSE OF HEARING, THE LD. D.R . CONTENDED THAT THE S E SMALL ADDITIONS WERE ALSO DELETED RELYING UPON THE ADDITIONAL EVIDENCE FILED DURING THE ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 13 COURSE OF HEARING OF THE APPEAL. IF THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE LD. CIT(A) FOR RE - ADJUDICATION OF THE ISSUES AFTER CONFRONTING THE ADDITIONAL EVIDENCE TO THE ASSESSING OFFICER, ALL THE OTHER GROUNDS CAN BE DISPOSED OF AS THEY REQUIRE FRESH ADJUDICATION. 13 . DURING THE COURSE OF HEARING, THE LD. D.R. FURTHER CONTENDED THAT NO DOUBT REMAND REPORT WAS CALLED WITH REGARD TO THE ADDITIONAL EVIDENCE FILED BEFORE THE LD. CIT(A) FROM THE ASSESSING OFFICER AND T HE ASSESSING OFFICER HAS SUBMITTED HIS REMAND REPORT VIDE LETTER DATED 14/3/2013 AND IN THIS REMAND REPORT HE VEHEMENTLY OBJECTED TO ADMISSION OF THE ADDITI ONAL EVIDENCE. BUT IN THE LAST PARA , HE MADE A SUBMISSION THAT SINCE ADDITIONAL EVIDENCE IS BEING ADMITTED H E WILL BE ALLOWED TO EXAMINE THE SAME AND ALSO TO FILE PROPER REMAND REPORT, BUT THE LD. CIT(A) DID NOT AFFORD TIME TO THE ASSESSING OFFICER AND HE PROCEED ED WITH THE HEARING OF THE APPEAL. THE LD. D.R. FURTHER CONTENDED THAT SINCE ADDITIONAL EVIDENCE WAS NOT EXAMINED BY THE ASSESSING OFFICER, THE MATTER MAY BE RESTORED BACK TO THE LD. CIT(A) TO RE - ADJUDICATE THE IMPUGNED ISSUES IN THE LIGHT OF THE ADDITIONAL EVIDENCE AFTER CONFRONTING THE SAME TO THE ASSESSING OFFICER. 14 . THE LD. A.R. OF THE ASSESSEE , HOWEVER , SUBMITTED THAT THE LD. CIT(A) HAS PROPERLY EXAMINED THE EVIDENCE AS HE IS COMPETENT TO DO SO, THEREFORE, NO PURPOSE WOULD BE SERVED IN RESTORING BACK TO THE LD. CIT(A). 15 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS , WE FIND THAT UNDISPUTEDLY ADDITIONAL EVIDENCE WAS SENT TO THE ASSESSING OFFICER FOR COMMENTS VIDE LETTER DATED 5/3/2013 FOR SUBMIS SION OF THE REPORT AND VIDE LETTER DATED 14/3/2013, THE ASSESSING OFFICER HAS RAISED OBJECTION AGAINST ADMISSION ITA NO.84 & 606/DEL/2013 & C.O. NO.5 & 6/LKW/2016 14 OF ADDITIONAL EVIDENCE. HE, HOWEVER, SOUGHT TIME FOR 30 DAYS TO SUBMIT PROPER REPORT. WITHOUT AFFORDING SUFFICIENT TIME TO THE ASSESSING OFFI CER TO EXAMINE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, THE LD. CIT(A) HAS PROCEEDED WITH THE HEARING AND HAVING ADMITTED ADDITIONAL EVIDENCE, HE DELETED THE ADDITION. SINCE THE LD. CIT(A) HAS NOT AFFORDED PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESS ING OFFICER, WE ARE OF THE VIEW THAT IT IS A FIT CASE WHERE THE MATTER MAY BE REMANDED BACK TO THE LD. CIT(A) FOR RE - ADJUDICATION OF THE ISSUES AFTER OBTAINING COMMENTS OR THE DETAILED REMAND REPORT ON THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE FROM THE ASSESSING OFFICER . ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE - ADJUDICATE THE IMPUGNED ISSUES AGAIN AFTER CONFRONTING THE ADDITIONAL EVIDENCE TO THE ASSESSING OFFICER. 16 . IN THE RESULT, BOT H THE APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 8 TH DECEMBER, 2017. SD/ - SD/ - [ T. S. KAPOOR ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 TH DECEMBER , 201 7 JJ: 0412 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR