M/s Gems Park Hotels Pvt.Ltd., Tiruvannamalai v. ACIT, Vellore

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NO. 1432/MDS/2009 ASSESSMENT YEAR : 2005-06 M/S. GEMS PARK HOTELS PVT. LTD. 66 PONDY-BANGALORE HIGHWAY CHENGAMROAD TIRUVANAMALAI. V. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-I VELLORE. (PAN: AABCG8996R ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.S. JAYAKUMAR RESPONDENT BY : SHRI TAPAS KUMAR DUTTA O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-IX CHENNAI IN ITA NO. 160/07-08 DATED 10-7-2008 FOR THE ASSESSMENT YEAR 2005-06. 2. SHRI V.S. JAYAKUMAR ADVOCATE REPRESENTED ON BEH ALF OF THE ASSESSEE AND SHRI TAPAS KUMAR DUTTA LEARNED CIT-DR REPRESENTED ON BEHALF OF THE REVENUE. I.T.A. NO.1432/MDS/2009 2 3. AT THE TIME OF HEARING IT WAS SUBMITTED BY THE L EARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSEE IS A COMPANY WHICH IS DOING THE BUSINESS OF RUNNING HOTELS. IT WAS THE SUBMISSION THAT THE ASS ESSMENT HAD BEEN COMPLETED WHEREIN AN ADDITION REPRESENTING UNEXPLAINED INVEST MENT IN THE CONSTRUCTION OF THE HOTEL BUILDING HAD BEEN MADE BY THE ASSESSING O FFICER. IT WAS THE SUBMISSION THAT ON APPEAL THE LEARNED CIT(A) HAD H ELD THAT THE REFERENCE MADE BY THE ASSESSING OFFICER TO THE VALUATION OFFICER U NDER THE PROVISIONS OF SECTION 142A WAS BAD IN LAW. IT WAS THE SUBMISSION THAT TH E LEARNED CIT(A) HAD NOT GIVEN ANY FINDING ON THE MERITS OF THE CASE. IT WAS THE SUBMISSION THAT ON APPEAL BY THE REVENUE BEFORE THE TRIBUNAL THE TRIBUNAL HA D REVERSED THE FINDING OF THE LEARNED CIT(A). HOWEVER IT WAS THE SUBMISSION THA T THE GROUNDS IN REGARD TO THE MERITS OF THE ADDITION AS CHALLENGED BY THE REV ENUE HAD NOT BEEN DISPOSED OF BY THE TRIBUNAL ALSO. IT WAS THE SUBMISSION THA T CONSEQUENT TO THE ORDER OF THE TRIBUNAL AS THERE WAS NO DECISION BY EITHER THE LEARNED CIT(A) OR THE TRIBUNAL ON MERITS IN RESPECT OF THE ADDITION THE ASSESSEE HAS FILED THIS APPEAL WHICH IS DELAYED BY 332 DAYS. IT WAS THE SUBMISSIO N THAT THE ORDER OF THE TRIBUNAL IN THE REVENUES APPEAL IN ITA NO.1952/MDS /2008 DATED 21-8-2009 WAS RECEIVED SOMETIME TOWARDS THE END OF AUGUST 2009 A ND IMMEDIATELY WHEN THIS ERROR WAS NOTICED THE ASSESSEE HAS FILED THE APPEAL ON 10.9.2009. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSEE HAD ALSO FILED A MISCELLANEOUS APPLICATION BEFORE THE HON'BLE TRIBUNAL AGAINST THE ORDER OF TH E TRIBUNAL IN ITA NO. I.T.A. NO.1432/MDS/2009 3 1952/MDS/2008 WHICH IS ALSO DISMISSED ON THE GROUND THAT THE ASSESSEE WAS ONLY A RESPONDENT AND IT COULD NOT FILE A MISCELLAN EOUS APPLICATION. IT WAS THE SUBMISSION BY THE LEARNED AUTHORISED REPRESENTATIVE THAT HE HAD NO OBJECTION IF THE ISSUES WERE RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR GIVING A FINDING ON MERITS IN RESPECT OF THE ADDITION WHICH HAS BEEN CH ALLENGED BY THE ASSESSEE. 4. IN REPLY THE LEARNED DR SUBMITTED THAT THE GROU NDS FOR CONDONATION OF DELAY AS RAISED BY THE ASSESSEE WERE FRIVOLOUS AND THE APPEAL OF THE ASSESSEE WAS LIABLE TO BE DISMISSED IN LIMINE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE THE LEARNED CIT (A) CLEARLY SHOWS THAT THE ASSESSEE HAS CHALLENGED THE ADDITION MADE BY THE AS SESSING OFFICER. A PERUSAL OF THE ORDER OF THE LEARNED CIT(A) CLEARLY SHOWS TH AT THE LEARNED CIT(A) HAS ALLOWED THE ASSESSEES APPEAL BY ONLY DECIDING THE LEGAL ISSUE BEING AS TO WHETHER THE REFERENCE MADE TO THE VALUATION OFFICER BY THE ASSESSING OFFICER WAS VALID OR NOT. HE HAS NOT GIVEN ANY FINDING ON THE MERITS. A PERUSAL OF THE GROUNDS RAISED BY THE REVENUE BEFORE THE TRIBUNAL W HICH HAVE BEEN BROUGHT OUT IN THE ORDER OF THE TRIBUNAL IN ITA NO. 1952/MDS/20 08 CLEARLY SHOWS THAT THE REVENUE HAS CHALLENGED THE ACTION OF THE LEARNED CI T(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER AND WHEREIN IT HAS CL AIMED THAT THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSES SEE HAS ALSO NOT GIVEN PROPER EXPLANATION/REASON FOR NOT ACCEPTING THE VALUE ADOP TED BY THE DVO EXCEPT THAT I.T.A. NO.1432/MDS/2009 4 DVO HAS ADOPTED HIGHER VALUE. THE REVENUE HAS ALSO CHALLENGED THE ACTION OF THE LEARNED CIT(A) IN NOT APPRECIATING THE FACT THA T THE ASSESSEE HAS NOT GIVEN ANY ALLOWANCE OF ARCHITECT FEE LOCAL BODY EXPENSES ETC. WHICH FACT HAD ALSO BEEN TAKEN INTO CONSIDERATION BY THE DVO WHILE ADOPTING THE SAID VALUE. THUS IT IS NOTICED THAT IN THE REVENUES APPEAL THE REVENUE HA S CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN REGARD TO THE DELETION OF THE SAME ON MERITS ALSO. HOWEVER A PERUSAL OF THE ORDER OF THE TRIBUNAL CLE ARLY SHOWS THAT THE TRIBUNAL HAD ONLY DECIDED THE APPEAL OF THE REVENUE IN REGAR D TO THE LEGAL ISSUE AS TO WHETHER THE REFERENCE TO THE VALUATION OFFICER WAS BAD IN LAW OR NOT. THE TRIBUNAL HAS ALSO NOT GIVEN ANY FINDING IN REGARD T O THE MERITS OF THE ADDITION. THUS THE FACT THAT EVEN THE REVENUE HAS ASSUMED THA T THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED ON MERITS CLEARLY SHOWS T HE BONA FIDES OF THE ASSESSEE. HOWEVER AS IT IS NOTICED THAT THE LEARN ED CIT(A) HAS NOT GIVEN ANY FINDING ON THE ISSUES RAISED BY THE ASSESSEE IN REG ARD TO THE MERITS OF THE ADDITION WE ARE OF THE VIEW THAT THE DELAY IN FILI NG THE APPEAL OF THE ASSESSEE REQUIRES TO BE CONDONED AND WE DO SO AND THE ISSUE ON MERITS IN THE APPEAL OF THE ASSESSEE IS REQUIRED TO BE RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR RE- ADJUDICATION AND WE DO SO. IN THE CIRCUMSTANCES TH E DELAY IN FILING THE APPEAL OF THE ASSESSEE BEFORE THE TRIBUNAL IS CONDONED AND TH E ISSUES IN THIS APPEAL ARE RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR RE-A DJUDICATION AFTER GRANTING THE I.T.A. NO.1432/MDS/2009 5 ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS C ASE. IN THE CIRCUMSTANCES THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSES. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 10/2/20 11. SD/- SD/- (B. RAMAKOTAIAH) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 10 TH FEBRUARY 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE