The ACIT, Central Circle-2, Surat V. Shri Virenbhai Sureshbhai Shah, Surat

ITSSA 149/AHD/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8438 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 10-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C PATWARI
• Keywords: Unexplained investment; Valuation report
• Section: 143(3); 132

Judgement Text

IT(SS)A.NO. 149/2009 . ASSESSMENT YEAR 2005-06. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH,AHME DABAD. ( BEFORE SHRI MUKUL KUMAR SHRAWAT & SHRI D.C. AGRAWAL ) I.T . (SS) A. NO.149/AHD/2009 (ASSESSMENT YEAR: 2005 -2006 ) THE ASSISTANT COMMISSIONER OF INCOME TAX, CETRAL CIRCLE 2, AAYAKAR BHAVAN, MAJURA GATE, SURAT . (APPELLANT) VS SHRI VIRENBHAI SURESHBHAI SHAH, 8/A, RATNAKUNJ SOCIETY APARTMENT, NR.CHILDREN PARK, GHOD DOD ROAD, SURAT . (RESPONDENT) PAN: AHHPS 2739Q APPELLANT BY : SHRI D.C. PATWARI, CIT (DR) RESPONDENT BY : SHRI HARDIK VORA. ( (( ( )/ )/)/ )/ ORDER PER: SHRI MUKUL KUMAR SHRAWAT, J.M. THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHIC H IS EMANATED FROM THE ORDER OF THE CIT (A)-II, AHMEDABAD DATED 18-8-2 009 FOR ASSESSMENT YEAR 2005-06 AND THE RELEVANT SUBSTANTIVE GROUNDS A RE REPRODUCED BELOW:- GROUND NO.1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN TH E LAND ON THE BASIS OF THE VALUATION REPORT OF THE DVO, ON REFERENCE U/ S. 142A OF THE ACT, RELYING UPON THE DECISION OF HON. ITAT, AHMEDABAD B ENCH IN THE IT(SS)A.NO. 149/2009 . ASSESSMENT YEAR 2005-06. 2 CASE OF BALKISHAN PODDAR, EVEN WHEN THE SAME HAS NO T BECOME FINAL AND ON THE SAME APPEAL IS PENDING WITH HONBLE MUMB AI HIGH COURT. GROUND NO.6 ` THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN H OLDING THAT ONUS U/S. 69B WAS NOT DISCHARGED BY THE A.O. EVEN W HEN THE HUGE DIFFERENCE IN VALUATION OF RS.1,20,95,950/- ESTIMAT ED BY THE VALUATION OFFICER AND RS.30,60,550/- SHOWN AS THE COST OF LAN D PURCHASED WAS NOT FULLY EXPLAINED BY THE ASSESSEE AND IN DOING SO COMPLETELY IGNORED THE RATIO LAID DOWN BY THE HONBLE RAJASTHAN HIGH C OURT IN THE CASE OF AMAR KUMAR SURANA VS. CIT (226 ITR 344). 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S.153A WERE THAT THE ASSESSE E IN INDIVIDUAL CAPACITY WAS SUBJECTED TO SEARCH U/S.132 O 7-3-2006. SUBSEQU ENTLY A RETURN WAS FILED ON 26-11-2007 DISCLOSING AN INCOME OF RS. 28, 67,77 0/-.IT WAS OBSERVED BY THE A./O. THAT THE ASSESSEE HAS PURCHASED A PROPERT Y SITUATED AT 65, ADARSH SOCIETY, ATHWA LINES, SURAT ADMEASURING 725 SQ. MTR S. FOR A SUM OF RS.99,99,999/-. THE A.O. HAS REFERRED THE VALUATION TO DISTRICT VALUATION OFFICER AND VIDE VALUATION REPORT DATED 27-12-2007. THE SAID PROPERTY WAS VALUED AT RS. 1,59,51,000/-. ON RECEIVING THE SAID DVOS REPORT, THE ASSESSEE HAD MADE CERTAIN OBJECTIONS HOWEVER, BY TH E TIME THE ASSESSMENT WAS COMPLETED NO COMMENTS FROM THE DVOS OFFICE WER E RECEIVED AD THE A.O. HAS FINALIZED THE ASSESSMENT ON THE GROUND OF EXPIRY OF LIMITATION. RESULTANTLY, AN ADDITION OF RS. 59,51,000/-, THE DI FFERENCE BETWEEN THE TWO VALUES, WAS TAXED IN THE HANDS OF THE ASSESSEE. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LD. CIT (A) HAS MADE AN OBSERVATION THAT THE JANTRI RATE OF THE AREA WAS RS.6,000/- WHEREAS THE ASSESSEE HIMSELF HA S SHOWN THE PURCHASE IT(SS)A.NO. 149/2009 . ASSESSMENT YEAR 2005-06. 3 PRICE AT RS.12,000/- PER SQ. METER. LD. CIT (A) HAS ALSO COMMENTED THAT THE STAMP DUTY AUTHORITIES HAVE ACCEPTED THE PURCHASE C ONSIDERATION FOUND TO BE FAIR IN RESPECT OF THE IMPUGNED PROPERTY AND NO ADD ITIONAL STAMP DUTY WAS LEVIED. THE LD. CIT (A) HAS ALSO MADE AN OBSERVATIO N THAT THOUGH A SEARCH WAS CONDUCTED BUT NO EVIDENCE WAS FOUND TO DEMONSTR ATE THAT THE ASSESSEE HAD MADE ANY PAYMENT OVER AND ABOVE THE PURCHASE PR ICE. THE LD. CIT (A) HAS ALSO MADE AN OBSERVATION THAT DVO HAD VALUED TH E PROPERTY BY APPLYING A ADHOC RATE OF RS.20,000/- PER SQ. METER WITHOUT A SSIGNING ANY EVIDENCE OR SPECIFIC REASON. RELEVANT PORTION IS REPRODUCED BE LOW:- 3.2. I HAVE CONSIDERED THE FACTS AND THE SUBMISSIO NS. I AGREE WITH THE APPELLANTS VIEW FOR THE FOLLOWING REASONS; A) THE APPELLANT HAS PURCHASED THESE PROPERTI ES. DURING THE SEARCH, NO EVIDENCE WAS FOUND INDICATING THAT THE APPELLANT HAS PAID OVER AND ABOVE THE PURCHASE PRICE. AS PER HONBLE AHMEDABAD BENCHS DECISION IN THE CASE OF ACIT VS. SHRI BALKRISHAN PO DDAR ITA NO.3412 TO 3414/AHD/2008 FOR A.YS. 2000-01, 2003-04 & 2005- 06 DATED 12- 6-2009, NO SUCH ADDITION CAN BE MADE ON THE BASIS O F DVOS REPORT WHEN NO EVIDENCE IS FOUND IN THE SEARCH AND NO MATE RIAL IS AVAILABLE WITH THE A.O. FOR MAKING REFERENCE TO THE DVO. B) THE VALUATION OFFICER AS WELL ASSESSING OFFI CER HAS NOT CONSIDERED THE OBJECTION OF THE APPELLANT WHICH IS MAINLY THAT THE DVO HAS VALUED THE PROPERTY BY APPLYING ADHOC RATE OF RS. 20,000/- PER SQ. MTR. BUT NO REASON OR EVIDENCE IS GIVEN FOR THIS. THE CASE REPORTED BY DVO WAS FOR THE PRICE AT RS.12,200/- PE R SQ. MTR. BUT ON THAT BASIS, HE ADOPTED RATE OF RS. 20,000/- PER SQ. MTR. THE SALE INSTANCE RELIED BY THE DVO WERE FOR SALE OF LAND WH ICH IS MORE THAN 6 KMS AWAY FROM MY PROPERTY. THE DVO TOOK THE SALE IN STANCE OF 5-4- 2005 WHEREAS MY PROPERTY WAS PURCHASED IN NOVEMBER, 2003 AND PAYMENT MADE IN SEPTEMBER, 2004. THE PROPERTY UNDER REFERENCE IS LEASE HOLD PROPERTY WHEREAS THE DVO TOOK THE RATE F OR FREEHOLD PROPERTY. IT(SS)A.NO. 149/2009 . ASSESSMENT YEAR 2005-06. 4 WITH THE RESULT ASSESSEES APPEAL WAS ALLOWED AND T HE ADDITION WAS DELETED. 4. WE HAVE HEARD BOTH THE SIDES. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE COMPILATI ON FILED BEFORE US. MOST SIGNIFICANT IS THE DVOS REPORT DATED 27-12-2007 WH ICH WAS MADE THE BASIS FOR THE IMPUGNED ADDITION. IT IS PLACED IN THE COMP ILATION AT PAGE NO.8 AND WE HAVE FOUND THAT IT IS A HAND-WRITTEN REPORT. THE COMPILATION THEREFORE, CONSISTS AN LEGIBLE TYPED COPY OF THE REPORT THROUG H WHICH WE HAVE FOUND THAT IT WAS REPORTED AS UNDER:- ASSESSEE VIDE ABOVE SAID LETTER HAVE SENT COPY OF AGREEMENT AND SATAKHAT SHOWING PURCHASE VALUE OF PLOT MEASURING 7 97.55 SQ. MTS. FOR APPARENT CONSIDERATION OF RS.99,99,999/-. PAYMENT FOR PURCHASE MADE IN INSTALLMENTS COMMENCIN G FROM 21-11- 2003 TO 24-09-2004. THE AREA OF ADARSH SOCIETY COVERED 2 TO 4 TIMES I V ALUE COMPARED TO NEWLY DEVELOPED/DEVELOPING AREA OF VESU. SUDA CONDU CTED AUCTION ON 5-4-2005, WHICH GIVES LAND RATE OF RS. 12,205/- SQ. MTR AS REPORTED VIDE THEIR LETTER DATED /11/2007 IN CASE OF JIVRAJ TEA AND INDUSTRIES LTD. THUS FAIR VALUE OF PUC MAY WORK OUT TO 797.55 SQ. M TRS. X RS. 20,000/- PER SQ. MTR = 1,59,51,000/-, AS AGAINST DE CLARED VALUE OF RS.99,99,999/-. 5.IT HAS BEEN VEHEMENTLY ARGUED THAT AN ADHOC RATE OF RS.20,000/- WAS ADOPTED BY THE DVO WHICH WAS NEITHER COMPARABLE NOR THE SAID LOCALITY WAS CLOSED TO THE SITE OF THE ASSESSEE. FURTHER, IT WAS ALSO PLEADED THAT THE DVO HAD TAKEN THE SALE INSTANCE OF 5-4-2005 WHEREAS THE ASSESSEE HAD PURCHASED THE PROPERTY IN THE MONTH OF NOVEMBER, 2003. IT IS EVIDENT THAT WITHOUT MENTIONING ANY COMPARABLE SALE INSTANCE, THE DVO HA S ADOPTED AN ADHOC IT(SS)A.NO. 149/2009 . ASSESSMENT YEAR 2005-06. 5 FIGURE WHICH REMAINED UNSUBSTANTIATED. IT IS ALSO N OT IN DISPUTE THAT EVEN AFTER CONDUCTING SEARCH U/S. 132 OF THE ACT, NO EVI DENCE OF EXTRA PAYMENT WAS DETECTED. ON MERITS, WE ARE OF THE VIEW THAT LD . CIT (A) HAS RIGHTLY DELETED THE ADDITION. RESTS OF THE ARGUMENTS OF LD. D.R. IN SUPPORT OF LEGAL QUESTIONS RAISED AS PER THE GROUNDS OF APPEAL HAVE NO RELEVANCE AT PRESENT HENCE NEED NO INDEPENDENT ADJUDICATION. GROUND OF T HE REVENUE CHALLENGING THE QUANTUM ADDITION IS HEREBY DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 27 - 05 - 201 1. SD/- SD/- (D.C.AGRAWAL) (MUKU L KUMAR SHRAWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER AHMEDABAD. DATED: 27 - 05 - 2011. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-II, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER TRUE COPY DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. IT(SS)A.NO. 149/2009 . ASSESSMENT YEAR 2005-06. 6 1.DATE OF DICTATION 23 -5 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 23 / 5 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 27 - 05 -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..