Adarsh Marriage Cum conference Hall & Awasiya Hotel, V. I.T.O.,

ITA 93/PAT/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1193 (ITAT-PATNA)
• Duration Of Justice: 5 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 08-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAM BABU
• Assessee Lawyers: NITISH PRASAD SINHA
• Keywords: Unexplained investment
• Section: 147

Judgement Text

1 ITA NO. 93/PAT/2011. IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 93/ PAT /201 1 . ASSESSMENT YEAR : 200 2 - 03 . ADARSH MARRIAGE CUM CONFERENCE HALL THE INCOME - TAX OFFICER, & AWASIYA HOTEL, MOTIHARI. VS. WARD - 1, MOTIHARI. APPELLANT. RESPONDENT. APPELLANT BY : SHRI NITISH PRASAD SINHA. RESPONDENT BY : SHRI RAM BABU. DATE OF HEARING : 01 - 08 - 2016 DATE OF PRONOUNCEMENT : 19 TH AUGUST, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, PATNA DATED 11 - 03 - 2011 AND PERTAINS TO ASSESSMENT YE A R 2002 - 03. THE GROUNDS OF APPEAL READ AS UNDER : 1. FOR THAT THE LEARNED CIT(A) HAS ERRED BOTH IN LAW & ON FACTS. 2. FOR THAT THE LEARNED CIT(A) HAS ERRED IN JUSTIFYING THE INITIATION OF PROCEEDINGS U/S 147 ON THE BASIS OF REPORT OF THE VALUATION OFFICER. 3. FOR THAT THE LEARNED CIT(A) HAS ERRED IN SNOT REJECTING THE DVOS REPORT WHICH IS BASED ON EXCESS MEASUREMENTS TAKEN FOR DIFFERENT FLOORS AND WITHOUT CONSIDERING THE BILLS FOR PURCHASES OF DIFFERENT BUILDING MATERIALS SUBMITTED TO THE (DVOS) ON 21 - 12 - 2006. 4. FOR THAT THE APPELLANT HAS PURCHASED TH E ENTIRE MARBLE FROM ALWAR, RAJASTHAN VIDE DIFFERENT BILLS TOTALING TO RS.1,32,039/ - . THE PHOTOCOPIES OF THE BILLS SUBMITTED TO THE DVO ON 12 - 12 - 2006, BUT WITHOUT TAKING THE COST OF THE MARBLE FLOORING AND SKIRTING AS PER THE BILLS, THE DVO HAS TAKEN THE C OST OF MARBLE FLOORING @ RS.684.50/M2 AT RS.4,81,142/ - AND OF THE MARBLE SLDRTING @ RS.416.82/M2 AT RS.1,38 ,729/ - . HE HAS ALSO NOT TAKEN THE RATES OF OTHER ITEMS AS PER THE BILLS SUBMITTED TO HIM. 2 ITA NO. 93/PAT/2011. 5. FOR THAT THE OTHER MAJOR DEFECT OF THE DVOS REPORT IS THAT HE HAS ESTIMATED THE COST OF CONSTRUCTION BY APPLYING PLINTH RATES WITHOUT GIVING THE PLINTH AREA IN HIS REPORT. HE HAS MENTIONED THAT THESE DETAILS ARE GIVEN IN ANNEXURE IV. BUT THERE IS NO ANNEXURE IV AVAILABLE IN HIS REPORT AS EVIDENT FROM THE CERTIFIE D COPY ISSUED TO THE APPELLANT. 6. FOR THAT THE DVO HAS APPLIED THE RATE FOR FIRST FLOOR HIGHER THAN THAT OF THE GROUND FLOOR. 7. FOR THAT THE DVO HAS VALUED THE COST OF CONSTRUCTION BY TAKING THE PLINTH AREA RATES AS ON 01 - 01 - 1992 AND BASE 100 AND APPRECIATED T HE COST OF MATERIALS USED AND THE COST OF LABOUR CHARGES PAID, ARITHMETICALLY WITHOUT FINDING OUT ACTUAL COST INCURRED BY THE APPELLANT. 8. FOR THAT THE LEARNED C.I.T.(A) SHOULD HAVE REJECTED THE REPORT OF THE DVO SUFFERING FROM DEFECTS. 9. FOR THAT THE LEARNED C.I.T.(A) SHOULD HAVE ACCEPTED THE REPORT OF REGISTERED VALUER BASED ON THE SCHEDULE OF RATES PRESCRIBED BY GOVERNMENT OF BIHAR. 10. FOR THAT THE LEARNED C.I.T.(A) HAS ERRED IN TREATING THE DIFFERENCE BETWEEN THE DISCLOSED INVESTMENT AND THE VALUATION EMERGING AFTER GIVING APPEAL EFFECT AS UNEXPLAINED INVESTMENT FOR THE RELEVANT ASSESSMENT YEAR. 2. AT THE OUTSET IN THIS CASE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT HE SHALL NOT BE PRESSING GROUND NO.2 RELATING TO JUSTIFICATION OF INITIATION OF PROCEEDIN GS U/S 147. HENCE THIS GROUND IS DISMISSED AS NOT PRESSED. 3. ON MERITS THE LEARNED COUNSEL PLEADED THAT VALUATION IN THIS CASE HAD BEEN MADE ON THE BASIS OF DVO S REPORT. LEARNED COUNSEL SUBMITTED THAT THE DVO IN THIS CASE HAS ADOPTED THE CPWD RATES FOR THE COMPUTATION. LEARNED COUNSEL PLEADED THAT IF THE STATE PWD RATES ARE APPLIED, THE VALUATION WILL COME DOWN SUBSTANTIALLY AND THEN THE ASSESSEE WOULD NOT HAVE ANY GRIEVANCE. FOR THE PROPOSITION THAT VALUATION OF STATE PWD RATES SHOULD BE ADOPTED INSTE AD OF CPWD RATES, LEARNED COUNSEL PLACED RELIANCE UPON THE FOLLOWING CASE LAWS: 1. ITAT PATNA BENCH DECISION IN ITA NO. 145 AND 146/PAT/2010 IN THE CASE OF SHRI RADHE KRISHNA SINGH, ORDER DATED 16 - 12 - 2010. 3 ITA NO. 93/PAT/2011. 2. HONBLE MADRAS HIGH COURT DECISION IN THE CAS E OF CIT VS. P. JEYAVELAM IN T.C. (A) NO. 1487 OF 2007 VIDE ORDER DATED 28 - 11 - 2007. 4. PER CONTRA, LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. UPON CAREFUL CONSIDERATION I FIND THAT THE ADDITION HAS BEEN MADE BY THE AO IN THIS CASE O N THE BASIS OF DVOS VALUATION OF THE ASSESSEES INVESTMENT IN PROPERTY. LEARNED CIT(APPEALS) HAS ALSO APPRECIATED THAT DEDUCTION IN DVOS REPORT IS WARRANTED TO COVER ANY DIFFERENCE ON ACCOUNT OF CPWD RATES AND PWD RATES. HOWEVER, SHE HAS DIRECTED AN ADH OC DEDUCTION INSTEAD OF DIRECTING FOR APPLICATION OF STATE PWD RATES. 6. IN THE LIGHT OF THE AFORESAID CASE LAWS CITED BY THE LEARNED COUNSEL OF THE ASSESSEE I AM INCLINED TO HOLD THAT THE STATE PWD RATES SHOULD BE ADOPTED FOR THE PURPOSE OF VALUATION IN THIS CASE. ACCORDINGLY THE ISSUE IS REMITTED TO THE FILE OF THE AO. THE AO IS DIRECTED TO MAKE THE VALUATION ON THE BASIS OF STATE PWD RATES. 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOU NCED IN THE OPEN COURT ON THIS 19 TH DAY OF AUGUST, 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. DATED: 19 TH AUGUST, 2016. 4 ITA NO. 93/PAT/2011. COPY FORWARDED TO : 1. ADARSH MARRIAGE CUM CONFERENCE HALL & AWASIYA HOTEL, BHAWANIPUR ZIRAT, MOTIHARI. 2. I.T.O., WARD - 1 , MOTIHARI. 3. C.I.T. - , PATNA. 4. CIT(APPEALS), - I, PATNA. 5. D.R., ITAT, PATNA. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA. WAKODE.