M.Selvaraju, Salem V. ITO, Namakkal

ITA 99/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90288 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 16-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 13-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: T S LAKSHMIVENKATARAMAN
• Keywords: Value adopted by valuation officer; Valuation report

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! , ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.99/MDS/2015 ( / ASSESSMENT YEAR : 2009-2010) SHRI. M. SELVARAJU, PROP:RMS TRANSPORTS, D.NO.3/148-D, TRICHY ROAD, NAMAKKAL TOWN, NAMAKKAL DIST. 637 001. [PAN:AGQPS 1175G] ( %& /APPELLANT) VS THE INCOME TAX OFFICER, WARD I (2), NAMAKKAL. ( !'%& /RESPONDENT) / APPELLANT BY : SHRI. T.S. LAKSHMI VENKATARAMAN, C.A. / RESPONDENT BY : SHRI. A.V. SREEKANTH, IRS, JCIT. /DATE OF HEARING : 15.04.2015 ! /DATE OF PRONOUNCEMENT : 15.04.2015 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL FILED BY ASSESSEE IS DIRE CTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DA TED 31.10.2014 FOR THE ASSESSMENT YEAR 2009-2010. I.T.A.NO.99/MDS/2015. :- 2 -: 2. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD TO SUSTAINING AN ADDITION OF F3,54,126/- TOWARDS DIFFERENCE IN COST OF CONSTRUCTION OF RESIDENTIAL BUILDING. THE FACTS OF THE ISSUE ARE TH AT THE ABOVE ADDITION OF F3,54,126/- HAS BEEN MADE IN RESPECT OF DIFFEREN CE BETWEEN THE DVOS VALUATION REPORT AND COST ADMITTED BY THE AS SESSEE IN HIS REGULAR BOOKS OF ACCOUNTS. THE ASSESSEE ADMITTED TH E COST OF CONSTRUCTION AT F1,43,25,000/- AS AGAINST THE DVOS VALUATION AT F1,46,79,126/-. THE DIFFERENCE WAS WORKED OUT AT F 3,54,126/- AND THE SAME WAS ADDED BY THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCO ME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER. AGAINST THIS, T HE ASSESSEE IS IN APPEAL BEFORE US 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE, THE DIFFERENCE IS WORKED OUT AT LESS THAN 3% OF THE COST ADMITTED BY THE ASSESSEE. THIS KIND OF MAR GINAL DIFFERENCE IS TO BE THERE WHEN WE COMPARE THE DVO REPORT WITH THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IN OUR OPINION, THE REPOR T OF THE DVO IS NOT A CONCLUSIVE EVIDENCE AND IT IS ONLY AN OPINION AND IT CANNOT ASCERTAIN EXACT AMOUNT INCURRED BY THE ASSESSEE ON CONSTRUCTI ON. HENCE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , IN OUR OPINION, IT I.T.A.NO.99/MDS/2015. :- 3 -: IS NOT APPROPRIATE TO SUSTAIN THIS KIND OF ADDITION WHICH IS VERY NOMINAL. ACCORDINGLY, THE ADDITION IS DELETED. 4. THE NEXT GROUND IS WITH REGARD TO SUSTAINING AN ADD ITION OF F2,00,000/- UNDER THE HEAD SPARES AND WORKSHOP EXPE NSES. THE FACTS OF THE ISSUE ARE THAT THE ABOVE DISALLOWANCE HAS BE EN MADE ON AN ESTIMATED BASIS ON THE GROUND THAT SOME OF THE VOUC HERS ARE SELF MADE. ACCORDING TO THE LD. AUTHORISED REPRESENTATI VE, THE ASSESSING OFFICER HAS NOT PIN POINTED THE DEFECTS IN THE SELF MADE VOUCHERS OR BOOKS OF ACCOUNTS, THEREFORE, THE SAID ADDITION IS TO BE DELETED. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE, IT IS NOT DISPUTED THAT THE E XPENDITURE INCURRED ARE SUPPORTED BY SELF-MADE VOUCHERS. IN SUCH CIRCUMSTA NCES, INFLATING OF EXPENDITURE BY ASSESSEE CANNOT BE RULED OUT. HENCE, WE DIRECT THE ASSESSING OFFICER TO DISALLOW ONLY 10% OF THE EXPEN SES COVERED BY SELF MADE VOUCHERS. THIS GROUND IS PARTLY ALLOWED. 6. THE LAST GROUND IN THIS APPEAL IS WITH REGARD TO C HARGING OF INTEREST U/S.234D OF THE I.T. ACT. THIS IS A CONSE QUENTIAL AND I.T.A.NO.99/MDS/2015. :- 4 -: MANDATORY IN NATURE AND TO BE COMPUTED IN ACCORDANC E WITH LAW, WHILE PASSING GIVING EFFECT ORDER BY THE ASSESSING OFFIC ER. 7. IN RESULT, THE APPEAL BY THE ASSESSEE IN ITA NO.99/MDS/2015 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIM E OF HEARING ON WEDNESDAY, THE 15 TH DAY OF APRIL, 2015 AT CHENNAI. SD/- SD/- ( ! ) (CHALLA NAGENDRA PRASAD) ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER '# /CHENNAI. $% /DATED:15.04.2015. KV %& '( )( /COPY TO: 1. * APPELLANT 2. / RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. (,- . /DR 6. -/ 0 /GF.