Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: cpt :: empanelment :: form 3cd :: articles on VAT and GST in India :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD
 
 
From the Courts »
  Vatsala Shenoy vs. JCIT (Supreme Court)
  Vatsala Shenoy vs. JCIT (Supreme Court)
 M.K.Overseas Pvt. Ltd. Vs. Pr.Commissioner Of Income Tax-06
 Arshia Ahmed Qureshi Vs. Pr. Commissioner Of Income Tax-21
 CHAUDHARY SKIN TRADING COMPANY Vs. PR. COMMISSIONER OF INCOME TAX-21
  Sushila Devi vs. CIT (Delhi High Court)
  Vatsala Shenoy vs. JCIT (Supreme Court)
 Deputy Director Of Income Tax Vs. Virage Logic International
 Commissioner Of Income Tax-3 International Taxation Vs. Virage Logic International India
 Pr. Commissioner Of Income Tax-06 Vs. Moderate Leasing And Capital Services Pvt. Ltd.
 ITO vs. Vikram A. Pradhan (ITAT Mumbai)

M/s Mahadev Rice & General Mills H.No. 62, Jawahar Nagar Ahmedgarh Vs. The ACIT, Circle IV Ludhiana
May, 02nd 2014
           IN THE INCOME TAX APPELLATE TRIBUNAL
            CHANDIGARH BENCHES `B' CHANDIGARH

       BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND
               SHRI. SANJAY GARG, JUDICIAL MEMBER


                                ITA No. 579/Chd/2012
                               Assessment Year : 2003-04

M/s Mahadev Rice & General Mills           Vs.      The AC IT, Circle IV
H.No. 62, Jawahar Nagar                             Ludhiana
Ahmedgarh

PAN No.AAJFM2848K

(Appellant)                                         (Respondent)

                    Appellant By              : Shri Sudhir Sehgal
                    Respondent By             : Shri J.S. Nagar

                    Date of hearing       : 23/04/2014
                    Date of Pronouncement : 28/04/2014


                                      ORDER


Per Sanjay Garg, Judicial Member



      The present appeal has been preferred by the assessee against order dated

30.03.2012 of C IT(A)-II, Ludhiana relevant to assessment year 2003-04


2.    The assessee has taken the following grounds of appeal:-

      1.      "That the Worthy Commissioner of Income Tax (Appeals) has
              erred in upholding that the Assessing Officer was justified in
              invoking the provisions of section 148.


      2.      That the Worthy CIT(A) has also erred in holding that on
              account of survey operation and close inspection of the
              building, the investment shown in the construction was no
              proper. That the finding of the CIT(A) in this regard is totally
              void abinitio since there was neither any inspection of the
              building   nor   any   measurement     of   building   nor   any
              measurement of building and, therefore, reference to the DVO
              by the Assessing Officer was not called, for specially when
                                                                                2



           nothing had been confronted about the alleged physical
           inspection / measurement during the survey.


     3.    That the CIT(A) has also erred in holding that the case could
           be reopened on the basis of report of the DVO, specially
           when nothing has been confronted during survey and no
           material has been brought on record that there was any
           unaccounted investment on the building.







     4.    That the CIT(A) has also erred in holding that there was
           pendency of proceedings when the reference to the DVO was
           made, which is also not a correct finding and the binding
           judgment of Hon'ble Supreme Court has been totally ignored
           that no case could be reopened on the basis of DVO's report
           as held by the Supreme Court in the case of ACIT vs Dhariya
           Construction Company as reported in 236 CTR 226.


     5.    Notwithstanding   the   above   said   ground   of   appeal,   the
           CIT(A)'s order in upholding that addition of Rs. 5,28,353/-
           was not called for on the basis of difference in the estimated
           investment as pointed out by the DVO to the tune of Rs.
           5,28,353/-


     6.    That the CIT(A) has also erred in ignoring the binding
           judgment of Hon'ble Supreme Court in the case of Sargam
           Cinema vs. CIT as reported in 241 CTR 179 as cited before
           him that since no defects have been pointed out in the books
           of accounts and the reliance by the CIT(A) on the physical
           inspection of the old building was without any evidence on
           record and is totally misconceived and liable to be brushed
           aside since, how, can alleged physical inspection led to
           undisclosed investment in the property since the AO is not a
           technical person, at all."



3.   A perusal of the above grounds taken by the assessee reveals that the onl y

effective issue which emerges of the above grounds is regarding reopening of
                                                                               3



the assessment u/s 147 of the Income Tax Act by the Assessing Officer on the

basis of report of the Department Valuation Officer (DVO)



4.    The brief facts of the case are that the assessee in its return of income

disclosed investment of Rs.21,88,315/- towards land and building. The return

was processed u/s 143(1) of the Act. However, later on the Assessing Officer

referred the case of the DVO who estimated the total amount of investment in

land and building at Rs. 27,16,628/- vide his report dated 10.01.2007. The

Assessing Officer thereafter reopened the case u/s 147 and made the addition of

the difference of amount between that was disclosed by the assessee and the

amount estimated by the DVO which came out at Rs. 5,28,353/- and added back

the same to the total income of the assessee.



5.    Aggrieved against the order of the Assessing Officer, the assessee

preferred an appeal before the C IT(A) which was dismissed by the CIT(A) vide

impugned order. Thus, the assessee is in appeal before us.



6.    We have heard the Ld. Representatives of both the sides and have also

gone through the records. From the perusal of the record, it reveals that the

Assessing Officer had not any other information or reason to believe that the

income disclosed by the assessee had escaped assessment except the report of

the DVO.     The reopening was made merel y on the basis of estimation of

investment made by the DVO. The Hon'ble Supreme Court in the case of AC IT

Vs. Dhari ya Construction Company (2010) 328 ITR 515 (SC) has held that the

opinion of the DVO per se is not an information for the purpose of reopening of

assessment u/s 147 of the Income Tax Act. Such a reopening which is based on

merel y upon the opinion of the DVO was held to be bad in law.    Similarl y, in

the case of Sargam Cinema Vs. C IT (2010) 328 ITR 513 (SC), the Hon'ble
                                                                                 4






Supreme Court has held that Assessing Officer could not refer the matter to the

DVO without the books of account of the assessee being rejected.


In the case in hand also, neither any information nor any such material was in

possession of the Assessing Officer from     which it could have been gathered

that the income of the assessee has escaped assessment nor the Assessing

Officer rejected the books of account of the assessee. The addition was made

onl y on the basis of information / estimation of the DVO, which per se, is not an

information for the purpose of reopening of assessment u/s 147 as has been held

by the Hon'ble Supreme Court in the case of ACIT Vs. Dharia Construction

Company (supra). In view of the above settled legal position, the reopening in

this case is held to be bad in law. Therefore, the additions so made by the lower

authorities are ordered to be deleted.


7.    In the result, appeal of the assessee is hereby allowed.


      Order Pronounced in the Open Court on this 28/04/2014



               Sd/-                                    Sd/-
      (T.R. SOOD)                                   (SANJAY GARG)
ACCOUNTANT MEMBER                                 JUDICIAL MEMBER
Dated : 28 t h April, 2014
Rkk
Copy to:
  1.     The Appellant
  2.     The Respondent
  3.     The CIT
  4.     The CIT(A)
  5.     The DR

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Custom Software Development Outsourcing Custom Software Development Offshore Cus

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions