Dr. G. Subba Rao, Kadapa V. ACIT,Range-2, Valsad

MA 185/HYD/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8041 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 27-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K VISHWANATHAM
• Assessee Lawyers: S RAMA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER MA NO. 185/HYD/2011 IN ITA NO. 232/HYD/2009 ASSESSMENT YEAR 2004-05 DR. G. SUBBA RAO KADAPA PAN: ACTPG9211A VS. ASST. COMMISSIONER OF INCOME-TAX, RANGE 2, TIRUPATI APPELLANT RESPONDENT APPELLANT BY: SHRI S. RAMA RAO RESPONDENT BY: SHRI K. VISHWANATHAM DATE OF HEARING: 04 . 05 .201 2 DATE OF PRONOUNCEMENT: 04 .05.2012 O R D E R PER CHANDRA POOJARI, AM: BY THIS MA THE ASSESSEE SEEKS RECTIFICATION IN THE ORDER OF THE TRIBUNAL DATED 16 TH OCTOBER, 2009 IN I.T.A. NO. 232/HYD/2009 FOR ASSESSMENT YEAR 2004-05. 2. THE LEARNED AR SUBMITTED THAT THE ASSESSEE RAISED T WO GROUNDS IN HIS APPEAL, AS FOLLOWS: 2. THE LEARNED CIT(A) HAD ALLOWED ONLY 3.5% FOR SE LF SUPERVISION AND OUGHT TO HAVE ALLOWED 10% ON THE VA LUE FINALLY FIXED. 3. THE DIFFERENCE BETWEEN THE VALUE FINALLY FIXED B Y THE DEPARTMENT (CIT(A)) AND COST OF CONSTRUCTION ADMITT ED BY THE APPELLANT IS LESS THAN 10% AND HENCE THE ADDITION M ADE TOWARDS COST OF CONSTRUCTION MAY BE DELETED. 3. HOWEVER, THE TRIBUNAL ADJUDICATED ONLY ONE GROUND W ITH REGARD TO ALLOWABILITY OF SELF SUPERVISING CHARGES AND OMITTED TO ADJUDICATE THE OTHER GROUND. HE SUBMITTED THAT THE ITAT AFTER HEARING THE PETITIONER PASSED AN ORDER ON 16.10.200 9 ALLOWING PARTIAL RELIEF. AT PARA 4 OF THE TRIBUNAL ORDER, G ROUND NO. 2 WAS MA NO. 185/HYD/2011 DR. G. SUBBA RAO ================ 2 DECIDED IN FAVOUR OF THE ASSESSEE AND THE ITAT HELD THAT 10% OF THE DEDUCTION BE ALLOWED TOWARDS SELF SUPERVISION AGAINST 3.5% ALLOWED BY THE LOWER AUTHORITIES. HOWEVER, THE NEXT GROUND RAISED WITH REGARD TO THE DIFFERENCE IN THE COST OF CONSTRUCTION BETWEEN THE AMOUNT ARRIVED AT BY THE DEPARTMENT AFT ER ALLOWING RELIEFS GRANTED BY THE APPELLANT AUTHORITY AND THE COST OF CONSTRUCTION AS ESTIMATED IS LESS THAN 10%, AND HENCE THE DIFFERENCE IS TO BE IGNORED. IN THE CASE OF THE ASSESSEE HEREIN, THE PETITIONER FILED PAPER BOOK SHOWING THA T THE TOTAL COST OF CONSTRUCTION INCURRED BY THE PETITIONER HER EIN AND HIS WIFE AGGREGATED TO RS. 31,62,747 AND NOT RS. 27,62, 747 AS MISTAKENLY CONSIDERED BY THE ITO IN HIS ASSESSMENT ORDER. THE SAME IS WORKED OUT BY TAKING INTO CONSIDERATION THE EXPENDITURE INCURRED BY THE PETITIONER DURING THE F INANCIAL YEAR 2003-04 AND 2004-05 AND THE EXPENDITURE INCURR ED BY THE PETITIONER'S WIFE OF RS 3,06,616. THE BUILDING ACCOUNT IS AT PAGES 8 TO 17 OF THE PAPER BOOK SUBMITTED. IF THE R ELIEF AS DIRECTED BY THE ITAT WERE TO BE ALLOWED, THE COST O F CONSTRUCTION AS PER THE DIRECTIONS WOULD AMOUNT TO RS. 34,09,771. IF THE AMOUNT INCURRED BY THE ASSESSEE O F RS. 31,62,747 IS DEDUCTED FROM THERE, THE DIFFERENCE WO RKS OUT TO RS. 2,47,024 WHICH IS LESS THAN 8% OF THE TOTAL COS T INCURRED BY THE PETITIONER. IN THIS VIEW OF THE MATTER, THE ASSESSEE SUBMITTED THAT NO ADDITION BE MADE ON ACCOUNT OF DI FFERENCE IN THE COST OF CONSTRUCTION. THE AR SUBMITTED THAT THIS GROUND OF APPEAL IS NOT DECIDED BY THE ITAT WHILE PASSING THE ORDER ON 16.10.2009. 4. THE LEARNED DR SUBMITTED THAT THERE IS NO SUCH RULE TO PERMIT SUCH CLAIM OF THE ASSESSEE. HE RELIED ON TH E ORDER OF THE TRIBUNAL. MA NO. 185/HYD/2011 DR. G. SUBBA RAO ================ 3 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. ADMITTEDLY IN THIS CASE THE TRIBUNAL FAILE D TO CONSIDER GROUND NO. 3 RAISED BY THE ASSESSEE WHILE ADJUDICAT ING THE ORIGINAL APPEAL OF THE ASSESSEE. TO THAT EXTENT TH ERE IS MERIT IN THE ARGUMENT OF THE AR. HOWEVER, WE ARE OF THE OPINION THAT IF THE DIFFERENCE WORKED OUT BETWEEN THE VALUE DISCLOSED B Y THE ASSESSEE AND COST OF CONSTRUCTION DETERMINED BY THE ASSESSIN G OFFICER WHILE PASSING THE CONSEQUENTIAL ORDER TO THIS ORDER, IS L ESS THAN 5%, THE SAME BE IGNORED. ONCE THE ABOVE DIFFERENCE IS MORE THAN 5%, THE SAME HAS TO BE CONSIDERED IN ITS ENTIRETY AND THE A DDITION HAS TO BE SUSTAINED. 6. IN THE RESULT, THE MA FILED BY THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MAY, 2012. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 4 TH MAY, 2012 COPY FORWARDED TO: 1. DR. G. SUBBA RAO, H. NO. 20/1109 - C/R.K. NAGAR, KADAPA. 2. ACIT, RANGE 2, TIRUPATI. 3. THE CIT(A), TIRUPATI. 4 . THE CIT, TIRUPATI CHARGE, TIRUPATI . 5. THE DR B BENCH, ITAT, HYDERABAD. TPRAO