P.Sundareerajaiah Chetty, Chittoor v. ITO, Madanapalle

ITA 1626/HYD/2008 | 2005-2006
Pronouncement Date: 07-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 162622514 RSA 2008
Assessee PAN AEIPP6849Q
Bench Hyderabad
Appeal Number ITA 1626/HYD/2008
Duration Of Justice 2 year(s) 2 month(s) 3 day(s)
Appellant P.Sundareerajaiah Chetty, Chittoor
Respondent ITO, Madanapalle
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 07-01-2011
Date Of Final Hearing 08-12-2010
Next Hearing Date 08-12-2010
Assessment Year 2005-2006
Appeal Filed On 03-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A' HYDERABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.1626/HYD/08 : ASSTT . YEAR 2005-06 SHRI P.SUNDARARAJAIAH CHETTY PUNGANUR. ( PAN AEIPP 6849 Q ) V/S. INCOME-TAX OFFICER WRED-1 MADANAPALLE (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. K.NEERAJA RESPONDENT BY : SMT. V.MADHUVANI O R D E R PER G.C.GUPTA VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-0 6 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME -TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER- '1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS B OTH IN LAW AND ON FACTS IN SO FAR AS IT IS AGAINST THE INTERESTS OF T HEY APPELLANT. 2. THE REFERENCE MADE BY THE ASSESSING OFFICER TO THE DEPARTMENTAL VALUATION OFFICER AT BANGALORE IS WITHOUT JURISDICT ION AND THEREFORE THE ADDITION MADE ON THE BASIS OF THE VALUATION REP ORT OF THE BANGALORE D.V.O. IS ILLEGAL AND LIABLE TO BE DELETE D. 3. BEFORE MAKING THE ADDITION TOWARDS DIFFERENCE IN CO ST OF CONSTRUCTION THE ASSESSING OFFICER FAILED TO PROVI DE AN OPPORTUNITY TO THE APPELLANT CALLING FOR HIS OBJECTIONS AND THU S THE ADDITION SUFFERS FROM FAILURE OF NATURAL JUSTICE. 4. THE LEARNED CIT(A) FAILED TO CONSIDER THE FACTS RE LATING TO THE ADDITION MADE BY THE ASSESSING OFFICER IN PROPER PE RSPECTIVE IN THAT THE EXPENDITURE INCURRED IN THE SECOND PERIOD OF CONSTRUCTION OUGHT TO HAVE BEEN INCLUDED TO ARRIVE AT THE TOTAL COST OF CONSTRUCTION OR ALTERNATIVELY OUGHT TO HAVE BEEN E XCLUDED FROM THE ITA NO.1626./HYD/0 8 SHRI P.SUNDARARAJAIAH CHETTY PUNGANUR. 2 TOTAL COST OF CONSTRUCTION WORKED OUT BY THE D.V.O. WHILE PROCEEDING WITH THE ASSESSMENT FOR THE ASSESSMENT Y EAR 2005-06. 5. THE LEARNED CIT(A) ERRED IN NOT ALLOWING DEDUCTION OF AT LEAST 10% TOWARDS ELF SUPERVISION FROM THE COST OF CONSTRUCTION ARRIVED AT BY THE D.V.O. 6. THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED DEDUCTION OF 15% FROM THE VALUE ARRIVED AT BY THE D.V.O. TOWARDS DIFFEREN CE IN VARIATION IN RATES OF CPWD AND LOCAL PWD. 7. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE ADVANC ED AT THE TIM E OF HEARING THE APPELLANT PRAYS THAT THE ADDITION OF RS.7 78 476/- MADE TOWARDS DIFFERENCE IN COST OF CO NSTRUCTION MAY BE DELETED OR ALTERNATIVELY SUITABLY REDUCED. ' 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT BE FORE MAKING THE ADDITION TOWARDS THE DIFFERENCE IN COST OF CONSTRUCTI ON THE ASSESSING OFFICER FAILED TO PROVIDE AN OPPORTUNITY OF HEARING TO THE ASSESSEE CALLING FOR HIS OBJECTIONS AND THUS THE ADDITION SUFFERS FROM FAILURE O F NATURAL JUSTICE. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED ON TH E ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND TH AT IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE THE ASSESS ING OFFICER WAS DUTY BOUND TO PROVIDE AN OPPORTUNITY TO THE ASSESSEE CALLING FOR HIS OBJECTIONS IF ANY TO THE ADDITION PROPOSED ON ACCOUNT OF DIFFERENCE IN TH E COST OF CONSTRUCTION IN THE LIGHT OF THE REPORT OF THE DEPARTMENTAL VALUATI ON OFFICER WHICH THE ASSESSING OFFICER HAS FAILED TO PROVIDE IN THIS CASE. WE THEREFORE FIND MERIT IN THE GROUND OF APPEAL NO.3 OF THE ASSESSEE AND ACCORDING LY ON THIS GROUND ITSELF WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) & AO A ND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECI DE THE SAME DE-NOVO IN ACCORDANCE WITH LAW AND AFTER PROVIDING REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE TO FILE ITS OBJECTIONS IF ANY WITH REGARD TO THE DIFFERENCE IN THE ESTIMATE OF COST OF CONSTRUCTION BETWEEN THE ASSESSEE AND THE DEPARTMENTAL VALUATION OFFICER. THE ASSESSEE SHALL BE AT LIBERTY TO RA ISE ANY OBJECTION WITH ITA NO.1626./HYD/0 8 SHRI P.SUNDARARAJAIAH CHETTY PUNGANUR. 3 REGARD TO THE ISSUE OF VALUATION OF PROPERTY AND TO F ILE ANY EVIDENCE IN SUPPORT OF HIS CASE. IN VIEW OF OUR DECISION WITH REGARD TO GROU ND NO.3 OF THE ASSESSEE IN THIS APPEAL WE ARE NOT INCLINED TO ADJUDICATE UPON THE ISSUES RAISED IN OTHER GROUNDS OF THE ASSESSEE IN THIS APPEAL ON THE MERITS THERE OF. 5. IN THE RESULT ASSESSEE'S APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 7.1.2011 SD/- SD /- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 7TH JANUARY 2011 COPY FORWARDED TO: 1. SHRI P.SUNDARARAJAIAH CHETTY 18-126. SUBEDAR ST REET PUNGANUR. CHITTOOR DISTRICT. 2. INCOME TAX OFFICER WARD-1 MADANAPALLE. 3. COMMISSIONER OF INCOME-TAX(APPEALS) TIRUPATI 4. COMMISSIONER OF INCOME-TAX TIRUPATI 5. THE DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S