L.G. Trinadha Rao, Visakhapatnam V. The Dy. Commissioner of Welth Tax, Visakhapatnam

WTA 16/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3890 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V MADHUVANI
• Keywords: Valuation report
• Section: 143(3); 153A; 132

Judgement Text

WTA NOS.15 TO 19 /VIZAG/2017 L.G. TRINADHA RAO, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./W.T.A.NOS.15 TO 19/VIZAG/2017 ( / ASSESSMENT YEARS: 2007-08 TO 2011-12) L.G. TRINADHA RAO, VISAKHAPATNAM [PAN NO.AAEPL0979M] D Y. COMMISSIONER OF WEALTH TAX CIRCLE-5(1), VISAKHAPATNAM ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI C. SUBRAHMANYAM, AR / RESPONDENT BY : SMT. V. MADHUVANI, DR / DATE OF HEARING : 20.11.2017 / DATE OF PRONOUNCEMENT : 29.11.2017 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE WEALTH TAX APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX-2, VISAKHAPATNAM VIDE F.NO.PR.CIT-2/VSP/25(2) OF WT AC T/2016-17 DATED 13.3.2017 FOR THE ASSESSMENT YEARS 2007-08 TO 2011- 12. WTA NOS.15 TO 19 /VIZAG/2017 L.G. TRINADHA RAO, VISAKHAPATNAM 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL AND THE PROPRIETOR OF M/S. ULTRA DIMENSIONS, WHICH IS INVOL VED IN EXECUTION OF CONTRACT WORKS FOR THE GOVERNMENT OF DEFENCE ORGANI SATIONS, SUCH AS SHIP BUILDING CENTRE, VISAKHAPATNAM, DGNP, VISAKHAP ATNAM, ETC. A SEARCH OPERATION U/S 132 OF THE INCOME TAX ACT, 196 1 WAS CONDUCTED IN THE CASE OF THE ASSESSEE. ACCORDINGLY, ASSESSMEN TS WERE COMPLETED U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT DATED 30.12.2011. SUBSEQUENTLY, IT IS NOTICED FROM THE BALANCE SHEET FOR THE YEAR ENDED 31.3.2007 AND SCHEDULE OF FIXED ASSETS FOR THE ASSE SSMENT YEAR 2007-08 ENCLOSED TO THE RETURN OF NET WEALTH THAT T HE ASSESSEE IS HAVING MOVABLE AND IMMOVABLE ASSETS, WHICH FALL WIT HIN THE DEFINITION OF SECTION 2(A) OF THE WEALTH TAX ACT, 1957 AND HEN CE ARE ASSESSABLE TO WEALTH TAX ACT. IN RESPECT OF IMMOVABLE PROPERTI ES AS ON THE VALUE DATED 31.3.2007, THE MARKET VALUE OF THESE PROPERTI ES ARE TO BE ASCERTAINED AND TAXABLE WEALTH HAS TO BE DETERMINED . THE ASSESSEE HAS NOT FILED ANY WEALTH TAX RETURN FOR ASSESSMENT YEAR 2007-08, ACCORDINGLY, A NOTICE U/S 17(1) OF THE ACT DATED 18 .4.2013 WAS ISSUED BY THE A.O. TO THE ASSESSEE CALLING THE RETURN OF N ET WEALTH. IN RESPONSE TO THIS, THE ASSESSEE FILED WEALTH TAX RET URN ON 7.5.2013 ADMITTING NET WEALTH OF ` 97,92,200/-. ACCORDINGLY, THE ASSESSMENT WAS COMPLETED U/S 16(3) R.W.S. 17(1) OF THE WEALTH TAX ACT ON WTA NOS.15 TO 19 /VIZAG/2017 L.G. TRINADHA RAO, VISAKHAPATNAM 3 30.3.2015. ON VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE, IT IS NOTICED BY THE A.O. THAT THE ASSESSEE HAS SHOWN THE VALUES OF THE IMMOVABLE PROPERTIES AS PER THE BOOKS OF ACCOUNTS B UT FOR THE PURPOSE OF WEALTH TAX, THE VALUES OF SUCH ASSETS SH OULD BE SHOWN AS MARKET VALUES AS ON RELEVANT VALUATION DATES. SINCE THE ASSESSEE FAILED TO DO SO, THE VALUATION OF THESE PROPERTIES WAS REFERRED TO DEPARTMENTAL VALUATION CELL (DVC), VISAKHAPATNAM TO ASCERTAIN THE CORRECT VALUE OF THE IMMOVABLE PROPERTIES SCIENTIFI CALLY. HOWEVER, THE EXECUTIVE ENGINEER, VISAKHAPATNAM REFERRED THE VALU ATION TO SUPERINTENDING ENGINEER (SE), HYDERABAD. THOUGH THE REMINDER REQUEST WAS MADE TO THE DVC TO EXPEDITE THE VALUATION REPOR T, THE SAME WAS ONLY RECEIVED BY THE A.O. ON 17.4.2015. AS THE ASSE SSMENT ORDER GETTING TIME BARRED BY LIMITATION BY 31.3.2015, THE RELEVAN T ASSESSMENT WAS COMPLETED ON 31.3.2015 FOR THE ASSESSMENT YEAR 2007 -08. IN THE ASSESSMENT ORDER, THE A.O. HAS TAKEN CARE MENTIONIN G THAT AS AND WHEN VALUATION REPORT IS RECEIVED FROM DVC, THE ASSESSME NT WOULD BE REVISED ADOPTING THE VALUES ESTIMATED BY S.E., DVC, HYDERAB AD DETERMINED THE FOLLOWING VALUES U/S 2(E)(A) OF THE WEALTH TAX ACT A ND SUBSEQUENTLY, THE A.O. RECEIVED THE REPORT FROM DVC ON 17.4.2015 BY T HE TIME THE A.O. HAS COMPLETED THE ASSESSMENT. THE LD. COMMISSIONER ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 20.7.2016 PROPOSING TO REVISE THE WTA NOS.15 TO 19 /VIZAG/2017 L.G. TRINADHA RAO, VISAKHAPATNAM 4 ASSESSMENT FOR 2007-08 ON THE GROUND THAT THE A.O. HAS COMPLETED THE ASSESSMENT ORDER WITHOUT REPORT FROM THE DVC AND TH EREFORE, THERE IS ERROR COMMITTED BY A.O. AND NOT ASSESSED THE ORIGIN AL WEALTH TAX ASSESSMENT ORDER. THIS HAS CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE. THE ASSESSEE HAS SUBMITTED BEFORE THE A.O. THAT THERE IS NO ERROR IN THE ASSESSMENT ORDER. THE DELAY IN RECEIPT OF THE VALUATION REPORT FROM THE DVC CANNOT BE ATTRIBUTABLE TO THE A SSESSEE AND THE ASSESSMENT COMPLETED CANNOT SAID TO BE ERRONEOUS. T HE LD. COMMISSIONER AFTER CONSIDERING THE ABOVE EXPLANATIO N OF THE ASSESSEE, HE PASSED AN ORDER U/S 25(2) OF THE WEALT H TAX ACT AND DIRECTED THE A.O. 'TO ADOPT THE VALUES DETERMINED B Y THE DEPARTMENTAL VALUATION CELL U/S 2(E)(A) OF THE WEAL TH TAX ACT COMPLETE THE ASSESSMENT ACCORDINGLY. 3. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN APPE AL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT THE ASSESSEE HAS NOT RECEIVED REPORT OF THE DEPARTMENTA L VALUATION CELL, THEREFORE, A COPY SHOULD BE GIVEN TO THE ASSESSEE, IF ANY OBJECTIONS ARE THERE, THE SAME HAS TO BE CONSIDERED AND ASSESS MENT HAS TO BE COMPLETED. THEREFORE, HE PRAYED THAT THE ORDER PASS ED BY THE LD. COMMISSIONER MAY BE MODIFIED AND SUITABLE DIRECTION MAY BE GIVEN. WTA NOS.15 TO 19 /VIZAG/2017 L.G. TRINADHA RAO, VISAKHAPATNAM 5 4. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE ORDER PASSED BY THE LD. COMMISSIONER. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL S AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THERE IS A SEARCH IN THE CASE OF THE ASSESSEE AND S UBSEQUENTLY IT IS FOUND THAT THERE ARE SOME IMMOVABLE PROPERTIES A ND THE ASSESSEE HAS TO FILE A WEALTH TAX RETURN, WHICH HE WAS NOT FILED. THE A.O. HAS ISSUED A NOTICE, ACCORDINGLY, ASSESSEE FILED THE WEALTH TAX RETURN AND DECLARED IMMOVABLE PROPERTIES AS PER THE BOOKS OF ACCOUNTS. THE A.O. HAS REFERRED THE MATTER TO THE DEPARTMENTAL VALUATION CELL TO ASCERTAIN THE MARKET VALUE OF THE IMMOVABLE PROPERTIES, HOWEVER, THE A.O. HAS NOT REC EIVED THE REPORT OF THE DEPARTMENTAL VALUATION CELL, AND THER EFORE, HE HAS COMPLETED THE ASSESSMENT WITH A RIDER THAT ASSESSME NT WILL BE REVISED AFTER REPORT RECEIVED FROM THE DEPARTMENTAL VALUATION CELL. SUBSEQUENTLY, THE LD. COMMISSIONER PASSED AN ORDER U/S 25(2) OF THE WEALTH TAX ACT, DIRECTING THE ASSESSING OFFICER TO ADOPT THE VALUE DETERMINED BY THE DEPARTMENTAL VALUATION CELL AND COMPLETE THE ASSESSMENT. WE FIND THAT THE ABOVE ORDER PASSED BY THE LD. COMMISSIONER IS NOT CORRECT AND NOT JUSTIFIED. IT N EEDS MODIFICATION. IN VIEW OF THE ABOVE, 'WE DIRECT THE A.O. TO ISSUE ONE COPY OF THE REPORT OF THE DEPARTMENTAL VALUATION CELL TO THE ASSESSEE AND IF ANY WTA NOS.15 TO 19/VIZOG/2017 L.G. TRINODHA ROO, WTA NOS.15 TO 19 /VIZAG/2017 L.G. TRINADHA RAO, VISAKHAPATNAM 6 OBJECTIONS RAISED BY THE ASSESSEE, THE SAME MAY BE CONSIDERED AND COMPLETE THE ASSESSMENT IN ACCORDANCE WITH LAW. T HUS, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATI STICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 29 TH NOV17. SD/- SD/- ( . . ' ) ( . ) (D.S. SUNDER SINGH) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /VISAKHAPATNAM: ' /DATED : 29.11.2017 VG/SPS * + /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SRI L.G. TRINADHA RAO, PROP: M/S . ULTRA DIMENSIONS, D.NO.46-32/7, DONDAPARTHI, VISAKHAPATNAM 2. / THE RESPONDENT THE DCWT, CIRCLE-5(1), VISAKHAP ATNAM 3. , / THE PRINCIPAL CIT-2, VISAKHAPATNAM. 4. , ( ) / THE CIT (A), VIJAYAWADA 5. / , / , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM