M/S. MASHAL HOTEL PVT. LTD., Indore V. THE ACIT-3(1), Indore

MA 27/Ind/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 5598 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-06-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 25-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJEEB JAIN
• Assessee Lawyers: SHREYA JAIN CAS
• Keywords: Rejection of books of accounts; Unexplained investment; Value adopted by valuation officer; Fair market value; Valuation report; Reassessment proceedings; Set aside
• Section: 143(3); 56(2); 260A; 69B; 254(2); 145(3); 147; 69; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER M.A. NOS.27 TO 29/IND/2018 (ARISING OUT OF ITA NOS.618 TO 620/IND/2015) ASSESSMENT YEARS: 2008-09 TO 2010-11 M/S MASHAL HOTEL PVT. LTD., JHOOMAR GHAT, RASALPURA, A.B. ROAD, INDORE / VS. ACIT-3(1) INDORE ( APPELLANT ) ( RE VENUE ) PAN: AAFCM7187G APPELLANT BY SHRI PRAKASH JAIN, & SHREYA JAIN C AS, RE VENUE BY SHRI RAJEEB JAIN, SR. DR DATE OF HEARING: 13.09.2019 DATE OF PRONOUNCEMENT: 06.11.2019 / O R D E R PER MANISH BORAD, A.M: THE ABOVE CAPTIONED MISCELLANEOUS APPLICATIONS AT T HE INSTANCE OF ASSESSEE FILED U/S 254(2) OF THE ACT AR E DIRECTED AGAINST THE ORDER OF THE TRIBUNAL DATED 28.02.2018 VIDE ITA NOS.618, 619 & 620/IND/2015 PERTAINING TO ASSESSMENT YEARS 2008-09 , 2019-10 & 2010-11, ALLEGEDLY POINTING OUT CERTAIN MISTAKES AP PARENT FROM THE RECORDS IN THE IMPUGNED ORDER. M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 2 2. FIRST MISTAKE POINTED OUT IS THAT THE ASSESSEE D ID NOT RECEIVE REVISED GROUNDS OF APPEALS FILED BY THE REVENUE AT THE TIME OF HEARING. THESE WERE RECEIVED ONLY WHEN ASSESSEE APP LIED FOR CERTIFIED COPIES OF GROUNDS OF APPEALS AND OTHER DO CUMENTS FOR FILING OF APPEAL U/S 260A OF THE I.T. ACT 1961 BEFORE THE HON'BLE HIGH COURT OF MADHYA PRADESH. LD. COUNSEL FOR THE ASSESS EE HAS URGED THAT SINCE THE ASSESSEE WAS NOT PROVIDED COPIES OF REVISED GROUNDS OF APPEALS FILED BY THE REVENUE, THE IMPUGNED ORDER OF HON'BLE TRIBUNAL IS LIABLE TO BE RECALLED ON THIS SCORE ONL Y. 3. LD. DEPARTMENTAL REPRESENTATIVE (DR) STRONGLY OP POSED THE CONTENTIONS MADE BY THE LD. COUNSEL FOR THE ASSESSE E. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. LD. COUNSEL FOR THE ASSESSEE HAS REQUEST ED FOR RECALLING THE IMPUGNED ORDER DATED 28.02.2018 SINCE THE REVIS ED GROUNDS OF APPEALS FILED BY THE REVENUE WERE NOT GIVEN TO THE ASSESSEE BEFORE THE DATE OF HEARING. 5. FROM PERUSAL OF THE RECORDS WE OBSERVE THAT THE REVENUE FILED THE APPEALS AGAINST THE IMPUGNED ORDERS OF LD. CIT(A) O N 20.08.2015. THEREAFTER ON 24.08.2016 & 17.10.2016. REVENUE REQU ESTED FOR FILING REVISED GROUNDS OF APPEALS. ON BOTH THESE DA TES LD. COUNSEL FOR THE ASSESSEE WAS PRESENT. ON 18.11.2016 THE INC OME TAX DEPARTMENT FILED THE REVISED GROUNDS OF APPEALS. TH EREAFTER, REQUEST FOR ADJOURNMENT WAS MADE BY REVENUE ON 17.01.2017 & 21.09.2017 AND THE CASE WAS FINALLY HEARD ON 06.02. 2018. SO THE RECORDS SHOWS THAT THE LD. COUNSEL FOR THE ASSESSEE WAS WELL M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 3 INFORMED ON 24.08.2016 & 17.10.2016 THAT THE DEPART MENTAL REPRESENTATIVE IS GOING TO FILE THE REVISED GROUNDS OF APPEALS. DURING THE PERIOD OF ALMOST 15 MONTHS I.E. FROM 18. 11.2016 TILL 06.02.2018, SUFFICIENT TIME WAS AVAILABLE WITH THE LD. COUNSEL FOR THE ASSESSEE TO REQUEST FOR COPIES OF REVISED GROU NDS OF APPEALS IF THEY WERE NOT SUPPLIED TO THEM. EVEN AFTER 18.11.20 16 WHEN THE REVISED GROUNDS OF APPEALS WERE FILED, ON COUPLE OF OCCASIONS THE HEARING WAS ADJOURNED. LOOKING TO THESE SERIES OF E VENTS WE OBSERVE THAT THE LACKING WAS ON THE PART OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WHO SHOULD HAVE MADE EFFORTS TO PROCUR E REVISED GROUNDS OF APPEALS FROM THE OFFICE RECORDS OR FROM THE REVENUE AUTHORITIES. 6. IN OUR CONSIDERED VIEW THE FIRST GROUNDS RAISED IN THESE MISC. APPLICATIONS DESERVES TO BE DISMISSED SINCE WE FIND NO MERIT IN IT AS IT HAS NO BASIS FOR RECALLING WELL-REASONED ORDER O F THE TRIBUNAL. THUS, THE FIRST COMMON ISSUE RAISED IN THESE MISC. APPLICATIONS STANDS DISMISSED. 7. THROUGH SECOND GROUND COMMONLY RAISED IN THESE T HREE MISC. APPLICATIONS, LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT THE HON'BLE TRIBUNAL FAILED TO ADJUDICATE FOLLOWING REV ISED GROUND NO.(V) OF THE APPEALS FILED BY THE REVENUE: ERRED IN GIVING THE AFORESAID RELIEF- WHILE NOT AP PRECIATING THAT AS PER SECTION1 42A THE ONLY REQUIREMENT DURING THE COURSE OF ASSESSMENT OR REASSESSMENT IS WHERE ESTIMATE OF THE VALUE/FAIR MARKET VALUE OF ANY INVESTMENT REFERRED TO IN SECTI ON.69 OR 69B OR PROPERTY MENTIONED IN 56(2) IS REQUIRED TO BE MA DE, THE AO MAY REFER THE MATTER TO VALUATION OFFICER TO MAKE A N ESTIMATE OF M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 4 SUCH VALUE, AND THE INTERPRETATION OF SECTION. 142A BY THE CIT(A) WITH REGARD TO THE LINE OF ACTION TAKEN BY THE AO I S NOT CORRECT AS IT WAS NOT MANDATORY AS PER LAW. 8.LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT IN THE SYNOPSIS AT PAGES 15 & 17 RELIANCE WAS PLACED ON VARIOUS JUD GMENTS WHICH WERE NOT CONSIDERED BY THE HON'BLE TRIBUNAL. LD. CO UNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT IN PARA 5 OF THE IMPUG NED ORDER HON'BLE TRIBUNAL NOTED THE CRUX OF THE FINDING OF L D. CIT(A), WHO ALLOWED THE ASSESSEES GROUND CHALLENGING THE REOPE NING OF THE ASSESSMENT WAS NOT TENABLE IN LAW, OBSERVING THAT R EFERENCE WAS MADE TO THE DEPARTMENTAL VALUATION OFFICER ( IN SHO RT DVO) IN ORDER TO DETERMINE THE COST OF CONSTRUCTION/EXPANSI ON OF HOTEL BUILDING, WITHOUT ANY EVIDENCE AND WITHOUT REJECTIN G BOOKS OF ACCOUNT. THEREFORE, IT IS CLEAR THAT, FACTS REGARDI NG QUASHING OF ASSESSMENT BY LD. CIT(A) ON THE GROUND THAT REFEREN CE TO THE DVO WAS MADE WITHOUT REJECTING THE BOOKS OF ACCOUNT IS NOT VALID, WAS IN THE KNOWLEDGE OF THE HON'BLE BENCH. 9. PER CONTRA LD. DR STRONGLY OPPOSED THE SUBMISSIO NS OF LD. COUNSEL FOR THE ASSESSEE AND ALSO SUBMITTED THAT HO N'BLE TRIBUNAL HAS ADJUDICATED THE ISSUE OF REOPENING OF THE ASSES SMENT AND HAS SET ASIDE ALL THE ISSUES ON MERITS TO THE FILE OF LD. CIT(A) FOR AFRESH ADJUDICATION. 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. THROUGH COMMON GROUND NO. 2 OF THESE THR EE MISC. APPLICATIONS THE GRIEVANCE OF THE ASSESSEE IS THAT GROUND NO.(V) OF M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 5 REVENUES REVISED GROUNDS OF APPEALS HAS NOT BEEN A DJUDICATED AND ALSO NO FINING HAS BEEN GIVEN BY THE TRIBUNAL ON TH IS ISSUE THAT WHETHER THE LD. AO CAN REFER VALUATION OF PROPERTY TO THE DVO WITHOUT REJECTING THE BOOKS OF ACCOUNT. 11. AS FAR AS, POINTING OUT THE ALLEGED MISTAKE THA T THE CASES REFERRED BY ASSESSEE HAVE NOT BEEN CONSIDERED, WE F IND NO FORCE IN THE CONTENTION SINCE IN PARA 9 AT PAGE 10 OF THE IM PUGNED ORDER, WE HAVE GIVEN A FINDING THAT THE FACTS OF THE JUDGMEN T RELIED UPON BY THE ASSESSEE AS WELL AS CIT(A) ARE DIFFERENT FROM T HE FACTS OF THE INSTANT APPEAL. TO ARRIVE ON THIS FINDING WE HAVE DULY CONSIDERED THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF DHARIYA CONSTRUCTION CO. (2010) 328 ITR 515 (SC). IN THIS JUDGMENT THE FACT WAS THAT THE CASE OF THE ASSESSEE WAS REOPENED MERE LY ON THE BASIS OF DVOS REPORT. IN OTHER WORKDS REASONS FOR REOPEN ING WAS THE DVOS REPORT. 12. HOWEVER, IN THE INSTANT CASE THE FACTS WERE DIF FERENT BECAUSE IN THIS CASE LD. AO DURING THE COURSE OF ASSESSMENT PR OCEEDINGS U/S 143(3) OF THE ACT FOR A.Y. 2010-11 INITIATED THE PR OCESS OF REFERRING THE VALUATION OF THE CONSTRUCTION WORK DONE BY THE ASSESSEE TO THE DVO. THE DVO REPORT WAS NOT RECEIVED BEFORE 25.03.2 013 I.E. THE DATE OF COMPLETING ASSESSMENT PROCEEDINGS U/S 143( 3) OF THE ACT. JUST AFTER 3 DAYS OF THE FRAMING OF ASSESSMENT ORDE R U/S 143(3) OF THE ACT, ON 28.03.2013 THE REPORT OF DVO WAS RECEIV ED. ON THE BASIS OF THIS REPORT REASSESSMENT PROCEEDINGS WERE INITIATED FOR A.Y. 2008-09, 2009-10 & 2010-11 AND ADDITION FOR UNACCOU NTED M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 6 INVESTMENT U/S 69 OF THE ACT WAS MADE BY THE LD.AO. IT SHOWS THAT ASSESSMENTS WERE NOT REOPENED ON THE BASIS OF INDEP ENDENT INFORMATION IN THE FORM OF VALUATION REPORT OF THE DVO. IT WAS THE ASSESSING OFFICER WHO HAS INITIATED THE PROCESS OF VALUATION BY REFERRING IT TO THE DVO IN THE REGULAR ASSESSMENT P ROCEEDINGS U/S 143(3) OF THE ACT. THEREAFTER, THE CASES WERE REOPE NED FOR A.YS. 2008-09, 2009-10 & 20010-11 WHICH WERE WELL WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. THE ABOVE FIND ING DULY APPEARS IN THE IMPUGNED ORDER AND ON THE BASIS OF T HIS FINDING WE COME TO A CONCLUSION THAT THE FACTS OF THE CASE OF THE ASSESSEE WERE DIFFERENT FROM THE FACTS OF THE CASE LAWS REFERRED AND RELIED BY THE LD. COUNSEL FOR THE ASSESSEE AS WELL AS LD. CIT(A). IT IS AN ESTABLISHED JUDICIAL JURUSPRUDENCE THAT RATIO OF JU DGMENT/DECISION OF THE HON'BLE COURT/TRIBUNAL CAN BE APPLIED ONLY I F THE FACTS ARE SIMILAR. 13. TOTAL GROUNDS OF APPEALS RAISED BY THE REVENUE WERE RAISING TWO ISSUES FIRSTLY CHALLENGING THE FINDING OF LD. CIT(A ) QUASHING THE REASSESSMENT PROCEEDINGS AND SECONDLY THE ISSUES ON MERITS INCLUDING THE ADDITION MADE U/S 69B OF THE ACT WHIC H WERE NOT ADJUDICATED BY THE LD. CIT(A), BECAUSE THE REASSESS MENT PROCEEDINGS ITSELF WERE QUASHED. IN THE GROUND OF A PPEALS THE REVENUE AUTHORITIES HAVE ONLY REFERRED TO THE JUDGM ENT OF HON'BLE APEX CORUT IN THE CASE DHARIYA CONSTRUCTION CO. (2010) 328 ITR 515 (HON'BLE SUPREME COURT). THERE IS NO MENTION ABOUT THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF M/S SARGAM CINEMA VS. CIT M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 7 (2010) (SC) 328 ITR 513 IN THE REVISED GROUND FILED BY THE REVENUE. THEREFORE, THIS PLEA OF THE ASSESSEE THAT GROUND NO .(V) OF THE REVENUES GROUND OF APPEALS FILED BY THE REVENUE HA S NOT BE ADJUDICATED HAS NO MERITS ON IS LIABLE TO BE REJECT ED. 14. WE, THEREFORE, ARE OF THE CONSIDERED VIEW THAT GROUND NO.(V) OF THE REVISED GROUNDS OF APPEALS FILED BY THE REVENUE STANDS DULY ADJUDICATED. 15. AS REGARDS THE CONTENTION OF THE LD. COUNSEL FO R THE ASSESSEE THAT THE HON'BLE TRIBUNAL HAS NOT ADJUDICATED THE I SSUE THAT THE LD. AO REFERRED THE MATTER OF THE VALUATION TO THE DVO WITHOUT REJECTING THE BOOKS OF ACCOUNTS WHICH IS NECESSARY AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF M/S SARGAM CINEMA VS. CIT (2010) (HON'BLE SUPREME COURT) 328 ITR 513, WE OBSERVE THAT BEFORE US THE APPEALS OF THE REVENUE IS FOR ADJUDICATION. ALL THE GROUNDS RAISED IN THE REVISED GROUNDS OF APPEALS BY THE REVENUE HAVE BEEN ADJUDICATED IN WHICH THE ISSUE OF REOPENING OF ASSE SSMENT WAS HELD IN FAVOUR OF REVENUE AND THE REMAINING ISSUES ON ME RITS WERE SET ASIDE TO THE FILE OF THE LD. CIT(A) FOR AFRESH ADJU DICATION. THE ISSUE WHETHER THE ADDITION CAN BE MADE WITHOUT REJECTING THE BOOK OF ACCOUNTS RESULTS STILL REMAINS LIVE SINCE THE ISSUE ON MERIT HAS BEEN SET ASIDE TO THE FILE OF THE LD. CIT(A) WHO CAN DEC IDE IT AFRESH AS DIRECTED BY US IN THE IMPUGNED ORDER. 16. SO FAR AS THE CONTENTION OF THE ASSESSEE THAT T HE LD. AO HAS NOT REJECTED THE BOOKS OF ACCOUNTS WE FIND THAT FOR THE PURPOSE OF M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 8 COMPUTING THE INCOME ONE HAS TO ADOPT OR IMPORT PRO FIT/INCOME FROM THE PROFIT AND LOSS ACCOUNT. EVERY ASSESSEE WH O MAINTAINS BOOKS OF ACCOUNTS, PUNCHES OR WRITES THE TRANSACTIO NS IN THE FORM OF AN ENTRY IN THE BOOKS OF ACCOUNTS MAINTAINED MAN UALLY/ON COMPUTER. AT THE END OF THE YEAR THE RESULT OF ALL SUCH ENTRIES COMES IN THE FORM OF BALANCE SHEET AND PROFIT AND LOSS AC COUNT. GENERALLY WHEN THE LD. AO SCRUTINIZE THE BOOKS AND FIND SOME ERROR/MISTAKE IN THE FIGURE OF REVENUE OR EXPENDITURE I.E. SOME U NACCOUNTED SALES, OVERVALUED/UNDERVALUED REVENUE/EXPENSES, BOGUS PURC HASES ETC. AND RAISES DOUBTS ON THE GROSS PROFIT OR NET PROFIT WRITE AT THE END OF YEAR, THEN, THE LD. AO MAY DECIDE TO REJECT THE BOO KS OF ACCOUNTS U/S 145(3) OF THE ACT AND ESTIMATE THE INCOME FOR T HE YEAR BY APPLYING A HIGHER RATE OF GROSS PROFIT OR NET PROFI T ON THE REVENUE SHOWN BY THE ASSESSEE OR CALCULATED BY THE LD. AO. 17. IN THE INSTANT CASE, WE FIND THAT DURING THE CO URSE OF REASSESSMENT PROCEEDINGS U/S 147 R.W. SECTION 143(3 ) OF THE ACT. LD. AO HAS NOT GIVEN ANY SPECIFIC FINDING POINTING OUT MISTAKE IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE AND THE REFORE, THERE WAS NO NEED FELT TO ESTIMATE PROFIT OF THE ASSESSEE COM PANY AFRESH. THE ALLEGED TRANSACTIONS WHICH WERE OUTSIDE THE BOOKS O F ACCOUNTS I.E. THE ALLEGED UNACCOUNTED INVESTMENT IS THE ONLY ADDI TIONS MADE BY THE LD. AO. IT SEEMS THAT THE LD. AO HAS NOT REJECT ED THE BOOKS OF ACCOUNTS SINCE HE WAS SATISFIED BY THE BOOK RESULTS WHICH ARE ONLY RELEVANT FOR CALCULATING GROSS PROFITS/NET PROFIT F OR YEAR. LD. AO WAS NOT SATISFIED BY THE FIGURE OF INVESTMENT IN HOTEL PROJECT AND FOR MAKING ADDITION FOR UNACCOUNTED INVESTMENT, HE/SHE HAS NO REASON M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 9 TO ESTIMATE INCOME OF THE ASSESSEE AFRESH BASED ON THE RECEIPTS/SALES NOT DISPUTED BY HIM. EVEN OTHERWISE SINCE THE ISSUES ON MERITS HAVE BEEN SET ASIDE TO THE FILE OF LD. CIT(A) SAME CAN BE TAKEN CARE OF IN THE SET ASIDE PROCEEDINGS. 18. ALL THE OTHER REMAINING ISSUES RAISED IN THESE MISC. APPLICATIONS ARE GENERAL IN NATURE AND MERELY REFER TO THE MERIT S OF THE CASE WHICH ALREADY STANDS SET ASIDE TO THE FILE OF THE L D. CIT(A) FOR AFRESH ADJUDICATION AND ARE ALSO NOT SUCH MISTAKES WHICH CAN BE TERMED AS MISTAKE APPARENT FROM RECORD AS PROVIDED U/S 254 (2) OF THE ACT. WE, THEREFORE, ARE OF THE CONSIDERED VIEW THAT ALL THE ISSUES RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IN THE MISC. AP PLICATIONS NO. 27, 28 & 29/IND/2018 DO NOT POINT OUT ANY APPARENT MIST AKE IN THE IMPUGNED ORDER OF THE TRIBUNAL DATED 28.02.2018, AS PROVIDED IN SECTION 254(2) OF THE ACT AND THUS ALL THESE MISC. APPLICATIONS NOS.27,28 & 29/IND/2018 DESERVES TO BE DISMISSED. 19. IN THE RESULT, THESE MISC. APPLICATIONS OF THE ASSESSEE ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 06.11.20 19. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 06/11/2019 CTX? P.S/. . . M.A. MASHAL HOTEL PVT. LTD. MANOS.27 TO 29/IND/2018 10 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR