Krishan Kumar Goyal, Panchkula V. DCIT, Patiala

ITA 94/CHANDI/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3783 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 28-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 05-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 94/CHD/2013 ASSESSMENT YEAR: 2008-09 SHRI KRISHAN KUMAR GOYAL, VS THE DCIT, HOUSE NO.996, CENTRAL CIRCLE, SECTOR 4, PANCHKULA. PANCHKULA. PAN: AESPK5599N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGA L RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 03.11.2016 DATE OF PRONOUNCEMENT : 07.11.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-1 LUDHIANA DATED 12.12.2012 FOR ASSESSMENT YEAR 2008-09. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 1, 2 AND 3 OF THE APPEAL OF THE ASSESSE E. THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 2 4. THE ONLY GROUND LEFT FOR CONSIDERATION IS GROUND NO. 4 ON WHICH ASSESSEE CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN CONFIRMING THE ADDITION AMOUNTING T O RS. 16,23,429/- MADE ON ACCOUNT OF UNEXPLAINED INVESTME NT IN THE CONSTRUCTION OF HOUSE ON THE GROUND THAT DIFFERENCE IN DEPARTMENTAL VALUATION OFFICERS REPO RT AND INVESTMENT MADE BY ASSESSEE. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSING OFFICER MADE ADDITION OF RS. 16,23,429/- ON THE BAS IS OF COST OF CONSTRUCTION WORKED OUT BY THE DVO. THE DVO HAS ESTIMATED THE VALUE OF COST OF CONSTRUCTION IN ASSESSMENT YEAR UNDER APPEAL AT RS. 30,23,429/-. T HE REPORT WAS CONFRONTED TO THE ASSESSEE. THE ASSESSI NG OFFICER, HOWEVER, ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION REPORTED BY DVO AND ASSESSEE, MADE THE ABOVE ADDITION. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT ASSESSEE JOINTLY WITH HIS WIFE HA S PURCHASED PLOT NO. 996 SECTOR 4, PANCHKULA DURING FINANCIAL YEAR 2006-07 FOR A SUM OF RS. 28 LACS AND HAVE SUBSEQUENTLY UNDERTAKEN THE CONSTRUCTION OF HOUSE WHEREIN THEY HAVE SPENT THE AMOUNT IN VARIOUS YEARS AND IN ASSESSMENT YEAR UNDER APPEAL RS. 14 LACS WAS SPE NT. IT WAS SUBMITTED THAT ESTIMATION OF COST OF CONSTRU CTION IS, BY ITS NATURE, SUBJECTIVE DEPENDING AS IT IS ON A HOST OF VARIABLE FACTORS SUCH AS THE QUALITY OF MATERIAL USED, THE LEVEL OF PERSONAL SUPERVISION, ABILITY OF THE OWNER/BUILDER TO GET BEST PRICE OF THE CONSTRUCTION 3 MATERIAL DEPENDING ON HIS BARGAINING POWER AND STAN DING IN THE MARKET ETC. THE PROPERTY WAS CONSTRUCTED UND ER THE SUPERVISION OF THE OWNER. THE ASSESSEE, THEREF ORE, SUBMITTED THAT ADDITION ON ESTIMATE BASIS IS ON HIG HER SIDE. IT WAS ALSO SUBMITTED THAT DIFFERENCE WAS AB OUT 10% THEREFORE, ENTIRE ADDITION MAY BE DELETED. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 6. I HAVE HEARD RIVAL CONTENTIONS. THE LD. COUNSEL FOR THE ASSESSEE FILED A CHART SHOWING THE RELIEF ENTIT LED TO THE ASSESSEE ON VARIOUS ITEMS AS PER DVOS REPORT. THE SAME IS REPRODUCED AS UNDER : SH. KRISHAN KUMAR GOYAL ITA NO 94/CHD/2013 FOR A.Y.2008-09 CHART SHOWING THE RELIEF ENTITLED TO THE ASSESSEE A S PER VALUATION REPORT OF THE REGISERED VALUER AND AS PER VALUATION REPORT OF THE DEPARTMENTAL VALUER. 1. WE HAVE ALREADY EXPLAINED THAT THE DEPARTMENTAL VALUER HAD APPLIED CPWD RATES WHICH ARE QUITE HIGHER AS COMPARED TO PWD RAT ES, WHICH SHOULD BE APPLIED AND FOR THAT THE FOLLOWING DECISIONS ARE BE ING RELIED UPON:- I). CIT VS ELEGANT HOMES (P) LTD. 259 ITR 23 2 (RAJ) II). CIT VS DINESH TALWAR 265 ITR 344 (RAJ) III). CIT VS SMT. V. GAJALAKSHMI 331 ITR 216 ( MAD). 2. THIS FINDING HAS BEEN APPROVED BY THE HON'BLE BE NCH OF THE ITAT, CHANDIGARH BENCH IN THE CASE OF SH. PARMINDER SINGH AND SH. HA RVINDER SINGH BEARING ITA 4 NO. 453/CHD/2012 AND IN ITA NO.454/CHD/2012 AS PER FINDING GIVEN IN PARA -7 OF THE ORDER. 3. BESIDES, THE DISTRICT VALUATION OFFICER HAS GIVE N THE BENEFIT OF 7.5% ONLY AGAINST 10% ALLOWED FOR SELF SUPERVISION AS PER PAG E 5 OF THE PAPER BOOK AND ALSO 3% BUILDER'S EFFORT HAVE BEEN ADDED, WRONGLY W ITHOUT ANY REASON AND LOGIC SINCE THE PROPERTY WAS CONSTRUCTED SELF AND ALSO 1% FOR ARCHITECTURE FEATURES HAVE BEEN ADDED. THEREFORE, IF THE BENEFIT OF PWD RATES IS GIVEN AND THE ABOVE ITEMS ARE CONCERNED ONLY THEN, THE RELIEF WOULD BE ALLOWABLE TO THE ASSESSEE AS UNDER:- A). REBATE FOR SELF SUPERVISION TO BE ALLOWED @ 10% AGAINST 7.5% ALLOWED BY THE DVO AND OUR VALUER HAS ALLOWED THE REBATE @ 10% AS PER PAGE 16 OF THE PAPER BOOK. IF THE BENEFIT OF SELF SUPERVISION IS ALLOWED @ 10% THEN THE BENEFIT WOULD BE AS UNDER:- I). 10% OF REBATE WORKS OUT AS PER DV O VALUATION 5,68,716.00 LESS: RELIEF 7.5% ALLOWED BY THE DVO 4,26,53 7.00 II). ADDL. BENEFIT ALLOWABLE 1,42,179.00 III) 3% BUILDER'S EFFORTS SINCE THE BUILD ING HAS BEEN 1,66,514.00 MADE UNDER SELF SUPERVISION- NO ADDITION CALLED AND RELIEF WORKS OUT IV). VALUE OF FF AS CALCULATED BY THE DEPA RTMENTAL VALUER ON THE BASIS OF CPWD RATE AS PER PAGE 4 OF THE PAPER BOOK. 13,88,188.00 LESS : VALUE OF FF AS CALCULATED ON THE 11.46.000.00 2,42,188.00 ON THE BASIS OF PWD RATES BY THE REGD. VALUER AS PER PAGE 14 OF T HE PAPER BOOK. V). VALUE OF WHITE MARBLE AS CALCULATED BY THE 14,12,616.00 DEPARTMENTAL VALUER ON THE BASIS OF CPWD RATES AS PER PAGE 4 OF THE PAPER BOOK. LESS: VALUE OF WHITE MARBLES AS CALCULATED 6.39.000.00 7,73,616.00 ON THE BASIS OF PWD RATES BY THE REGD. VALUER AS PER PAGE 15 OF THE PAPER BOOK. TOTAL RELIEF ALLOWED 13,24,497.00 5 COPY OF THE SAME WAS ALSO SUPPLIED TO LD.DR FOR HIS COMMENTS IN WHICH NO SPECIFIC COMMENTS HAVE BEEN OFFERED. THEREFORE, IN THE LIGHT OF THE SUBMISSION S OF THE ASSESSEE, DVOS REPORT AND REPORT OF THE VALUATION OFFICER SUBMITTED BY ASSESSEE ON RECORD, CLEARLY RE VEALED THAT ADDITION IS ON HIGHER SIDE. IT IS NOTED THAT GENERALLY THE REBATE FOR HIS SUPERVISION IS ALLOWED AT 10% AS AGAINST 7.5% ALLOWED BY THE DVO. FURTHER, IT WAS SUBMITTED BEFORE AUTHORITIES BELOW THAT BUILDING WA S CONSTRUCTED UNDER SELF SUPERVISION, THEREFORE, THER E WAS NO BASIS FOR DVO TO ADD 3% FOR BUILDERS EFFORTS AN D 1% FOR BUILDING ARCHITECTURAL FEATURE. THE DIFFERENCE IN THE VALUE OF FIRST FLOOR AS CALCULATED BY DVO AND AS PE R REGISTERED VALUER, IS APPROXIMATELY 21% ON ESTIMATE D BASIS WHICH IS NEGLIGIBLE AND INSIGNIFICANT AND ACC ORDING TO THE EXPLANATION OF THE ASSESSEE, THE CALCULATION OF COST OF WHITE MARBLE WAS ALSO EXCESSIVE. THEREFORE, CONSIDERING EXPLANATION OF THE ASSESSEE, IT IS CLEA R THAT THE ESTIMATE MADE BY THE DVO IS ON HIGHER SIDE. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AN D CIRCUMSTANCES, I AM OF THE VIEW THAT ASSESSEE COULD BE GRANTED RELIEF ON ESTIMATE BASIS IN A SUM OF RS. 7 LACS AS AGAINST CLAIM MADE BY ASSESSEE OF RS. 13.24 LACS. THEREFORE, I SET ASIDE AND MODIFY THE ORDERS OF AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO RECALCULATE THE ADDITION BY GIVING RELIEF TO THE AS SESSEE IN A SUM OF RS. 7 LACS. 6 7. IN THE RESULT, THIS GROUND OF APPEAL OF THE ASSE SSEE IS ALLOWED PARTLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 7 TH NOVEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH