Medical Trust Hospital, Idukki v. ITO, Thodupuzha

IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY AR ORA AM I.T.A. NOS. 306 307 308/COCH/2003 ASSESSMENT YEARS : 1996-97 1998-99 & 1999-2000 M/S. MEDICAL TRUST HOSPITAL NEDUNKANDAM IDUKKI DISTT. [PAN: AAEFM 4671M] VS. THE INCOME-TAX OFFICER WARD-2 THODUPUZHA. (ASSESSEE -APPELLANT) (REVENUE- RESPONDENT) I.T.A. NO. 684/COCH/2006 & C.O. NO. 03/COCH/2007 ASSESSMENT YEAR: 2000-01 THE INCOME-TAX OFFICER WARD-2 THODUPUZHA. VS. M/S.MEDICAL TRUST HOSPITAL NEDUNKANDAM IDUKKI DISTT. [PAN: AAEFM 4671M] (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) ASSESSEE BY SHRI HARI SANKAR V.MENON ADV. REVENUE BY SHRI T.J.VINCENT DR O R D E R PER BENCH: THESE ARE THREE APPEALS BY THE ASSESSEE AND ONE BY THE REVENUE ALONG WITH A CROSS OBJECTION BY THE ASSESSEE (FOR THAT YEAR) FO R FOUR YEARS I.E. FOR ASSESSMENT YEARS (AYS) 1996-97 1998-99 1999-2000 AND 2000-01 ARIS ING OUT OF THE ORDER/S BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-II KOCHI DAT ED 2.5.2003 (FOR THE FIRST THREE YEARS) AND BY THE COMMISSIONER OF INCOME-TAX (APPEA LS)-III KOCHI DATED 08/8/2006 (FOR AY 2000-01). 2. THE APPEALS FOR THE FIRST THREE YEARS WERE ADJU DICATED BY THE TRIBUNAL ON AN EARLIER OCCASION WITH IT STRIKING DOWN THE RE-OPENING OF T HE ASSESSMENT WHICH WAS UNDERTAKEN ITA NOS. 306 TO 308/COCH/2003 684/COCH/20 06 & CO 3/COCH./2007 2 BY THE REVENUE ON THE BASIS OF THE REPORT BY THE DE PARTMENTAL VALUER (DVO) VALUING THE COST OF CONSTRUCTION OF THE ASSESSEES (A PARTNERSH IP FIRM RUNNING A HOSPITAL) NEW BLOCK OF THE HOSPITAL AT ` 41 11 736/- AS AGAINST THE DISCLOSED FIGURE OF ` 29 09 201/- PER ITS ACCOUNTS. THE REVENUE PURSUED THE MATTER WITH THE HONBLE JURISDICTIONAL HIGH COURT WHICH VIDE ITS ORDER DATED 10.11.2009 (IN I.T.A. N OS. 626 663 676 & 1050/2009 COPY ON RECORD) REVERSED THE DECISION BY THE TRIBUNAL HOLDING THAT THE DVO BEING A SPECIALIZED PROFESSIONALLY QUALIFIED PERSON FOR TH E PURPOSE OF VALUATION HIS REPORT CONSTITUTED AN EXPERT OPINION AND THEREFORE RELIA BLE INFORMATION AND THUS A VALID BASIS FOR REOPENING AN ASSESSMENT PARTICULARLY WHERE THE DIFFERENCE IN VALUE AS IN THE INSTANT CASE WAS NOT INSIGNIFICANT VACATING THE FINDINGS BY THE TRIBUNAL REMITTING THE MATTER BACK THERE-TO FOR A DECISION ON MERITS ON WHICH TH E TRIBUNAL HAD NOT EXPRESSED ANY OPINION IN THE FIRST INSTANCE IN VIEW OF ITS SETTIN G ASIDE THE ASSESSMENTS ON LEGAL GROUND/S. THE REVENUE IS IN APPEAL FOR THE FOURTH YEAR I.E. A.Y. 2000-01(AS AGAINST THE ASSESSEE FOR THE FIRST THREE); ITS APPEAL (AS WELL AS THE AS SESSEES CROSS OBJECTION) FOR THAT YEAR ALSO RELATING TO THE SAME CAUSE OF ACTION; THE ASSESSMEN T HAVING BEEN LIKEWISE SET ASIDE BY THE LD. CIT(A) FOLLOWING THE DECISION BY THE TRIBUNAL F OR THE EARLIER YEARS. 3.1 OPENING THE ARGUMENTS ON BEHALF OF THE ASSESSEE IT WAS SUBMITTED BY THE LD. AR THE ASSESSEES COUNSEL THAT THE HONBLE APEX COURT VIDE ITS DECISION IN THE CASE OF SARGAM CINEMA VS. CIT (2010) 328 ITR 513 (SC) HAS SINCE SETTLED THE ISSU E AS REGARDS THE REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER (DV O) BY THE ASSESSING OFFICER (AO) CATEGORICALLY HOLDING THAT SUCH REFERENCE WAS NOT V ALID IN THE ABSENCE OF REJECTION OF BOOKS OF ACCOUNTS BY THE AO SO THAT RELIANCE THERE ON IN THE ABSENCE OF THE SAID REJECTION WAS MISCONCEIVED. IN VIEW THEREOF THE PRESENT SET OF ASSESSMENTS BEING BASED ON THE DVOS REPORT MERIT BEING STRUCK DOWN ON THAT ACCOU NT; THERE BEING NO SPECIFIC REJECTION OF THE ASSESSEES ACCOUNTS BY THE AO. WHEN QUERIED BY THE BENCH THAT IN THAT CASE WOULD NOT THE PROPER FORUM OR RECOURSE FOR THE ASSE SSEE LIE WITH THE HONBLE HIGH COURT IN A REVIEW PETITION THE LD. AR WOULD SUBMIT THAT IT IS NOT SO AS THE HONBLE HIGH COURT HAD DECIDED THE ISSUE BEFORE IT I.E. WHETHER THE VALU ATION REPORT BY THE DVO CONSTITUTED A VALID BASIS FOR THE AO TO INITIATE RE-OPENING PROCE EDINGS AND WHICH IT HELD IN THE AFFIRMATIVE; THE SAID REPORT BEING AN EXPRESSION OF EXPERT OPINION BY A TECHNICALLY ITA NOS. 306 TO 308/COCH/2003 684/COCH/20 06 & CO 3/COCH./2007 3 QUALIFIED PERSON ENGAGED BY THE REVENUE FOR THE PUR POSE. THE QUESTION HERE IS NOT THE VALIDITY OF THE RE-OPENING WHICH STANDS DECIDED BY THE HIGH COURT BUT OF WHETHER HIS REPORT COULD BE CONSIDERED BY THE AO AS DONE BY HI M FOR THE PURPOSE OF FRAMING THE ASSESSMENT IN THE ABSENCE OF REJECTION OF THE ASSES SEES ACCOUNTS BY HIM. HE THEN PROCEEDED TO ARGUE THE ASSESSEES CASE ON MERITS AS WELL; THE RELEVANT GROUND/S OF ITS APPEALS HAVING NOT BEEN DECIDED BY THE TRIBUNAL IN THE FIRST INSTANCE. THE DVO HAD ADOPTED THE CPWD RATES WHICH YIELD AN AVERAGE PLIN TH AREA RATE OF ` 4347 PER SQ. MTR. THE CORRESPONDING RATE BY THE STATE PWD FOR WHICH THERE IS PRECEDENCE IN THE FORM OF THE DECISION BY THE TRIBUNAL (COCHIN BENCH) IN THE CASE OF P.V.RAJAMMA VS. CIT (ASSISTANT) (I.T.A. 42/COCH/1995 DATED 23.5.1995) IS AT ` 1945 AND ` 1851 PER SQ. METRE FOR THE GROUND/SECOND FLOOR AND THE FIRST FLOOR RES PECTIVELY. EVEN IF A LATER CIRCULAR DATED 7.9.1996 WHICH WOULD BE MORE APPROPRIATE CONSIDERI NG THE PERIOD OF CONSTRUCTION IS ADOPTED THE RATES WOULD BE ` 2529 AND ` 2906 PER SQ. METRE RESPECTIVELY. FURTHER THE AO HAS ALLOWED A SELF-SUPERVISION REBATE OF ONLY 1% AS AGAINST THE ACCEPTED NORM OF 7.5% TO 10%; THE LATTER RATE HAVING BEEN ACCEPTED BY THE TR IBUNAL IN THE CASE OF P. V. RAJAMMA (SUPRA). ON BEING QUESTIONED BY THE BENCH THAT THE BASIC RAW MATERIALS VIZ. STEEL CEMENT ETC. ARE AVAILABLE ACROSS THE COUNTRY AT UNIFORM R ATES AS THE MAJOR AND REPUTED SUPPLIERS ARE THE COMPANIES WITH PAN-INDIA PRESENCE AS IS AL SO THE CASE WITH SANITARY GOODS ETC. HE CONCEDED THERE-TO STATING THAT EVEN SO THERE A RE OTHER LOCAL PURCHASES AS WELL. 3.2 THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT BEEN ABLE TO POINT OUT ANY INFIRMITY IN THE VALUATION REPORT WHICH IS BY AN OFFICER OF THE RANK OF AN EXECUTIVE ENGINEER VALUING THE ASSESSEES PROPERTY AT ` 41.12 LAKHS AS AGAINST ITS DECLARED VALUE OF ` 29.09 LAKHS. SECONDLY REFERRING TO THE RELEVANT CIRCULA RS ADVERTED TO BY THE LD. AR SIGNIFYING KERALA PWD RATES (PB 16-17) HE CLAIMED THAT THE SA ME ARE NOT APPLICABLE IN VIEW OF THEIR STATED PURPOSE I.E. FOR FIXATION OF STANDAR D RENT. FURTHER TAKING US THROUGH THE `ABSTRACT OF COST (PB PGS. 7-9) HE PLEADED THAT T HE ASSESSEE HAS BEEN ALLOWED REBATE FOR EACH AND EVERY ASPECT OF ITS CONSTRUCTION VIZ. FOR ENGAGEMENT OF AGRICULTURAL LABOURERS FOR UNSKILLED JOBS (AT ` 2.53 LAKHS); ON ACCOUNT OF SHALLOW FOUNDATION ON RO CKY FORMATION (AT ` 1.58 LAKHS); FOR NOT USING TEAKWOOD (AT ` 2.64 LAKHS); FOR NOT APPLYING EMULSION ON WALL SURFACE (AT ` 3.16 LAKHS); FOR CONSTRUCTION IN REMOTE AREA DUE TO AVAILABILITY OF SOME ITA NOS. 306 TO 308/COCH/2003 684/COCH/20 06 & CO 3/COCH./2007 4 MATERIALS AT LOW RATES ( ` 2.24 LAKHS); MOSAIC FLOORING ETC INCLUDING FOR DI RECT PURCHASE OF MATERIALS AND ENGAGEMENT OF LABOUR I.E. A SELF-SU PERVISION REBATE OF ` 3.96 LAKHS AT THE RATE OF 7.5%. AS SUCH NO FURTHER RELIEF IS EXIGIB LE UNDER THE CIRCUMSTANCES. FURTHER AS CLARIFIED BY THE REPORT ITSELF THE RATES ADOPTED A RE IN TERMS OF THE CBDT INSTRUCTION NO. 1671 READ WITH INSTRUCTION NO. 319/6/92-WT DATED 13 .12.1998. THE LD. AR IN REJOINDER SUBMITTED THAT IT IS NOT CORRECT TO SAY THAT THE AS SESSEE HAS NOT CONTESTED THE REPORT BY THE DVO; IT FILING A SEPARATE REPORT DATED 21.6.2002 V ALUING THE CONSTRUCTION AT ` 32.86 LAKHS (PB PGS. 10-13). 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. 4.1 WE SHALL ADDRESS THE LEGAL ISSUE FIRST AND ON BOTH ITS LEGAL AND FACTUAL ASPECTS. IN OUR VIEW THE ASSESSEE CANNOT SEEK SHELTER OF THE O RDER BY THE HONBLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT (SUPRA) AS THE PURVIEW OF THE TRIBUNAL IS TO CARRY OUT DIRECTIONS BY THE JURISDICTIONAL HIGH COURT. THIS F OLLOWS THE SETTLED LAW ON PRECEDENCE. THE PROPER COURSE FOR THE ASSESSEE IN CASE IT CONS IDERS THAT THE DECISION BY THE HONBLE HIGH COURT REQUIRES RECONSIDERATION IN LIGHT OF THE SAID DECISION BY THE APEX COURT AS ALSO INDICATED BY THE BENCH DURING HEARING WOULD BE A R EVIEW PETITION THERE-WITH. THE ASSESSEES CONTENTION THAT EVEN SO NO RELIANCE ON THE DVOS REPORT COULD BE PLACED IN VIEW OF THE CITED DECISION BY THE APEX COURT IN OU R VIEW ONLY AMOUNTS TO AN UNWARRANTED HAIR-SPLITTING AND A HYPER-TECHNICAL VIEW IN THE MA TTER. WOULD IT MEAN THEREFORE THAT WHILE THE SAID REPORT IS A VALID BASIS AND PROPER M ATERIAL FOR THE FORMATION OF BELIEF FOR INFERRING ESCAPEMENT OF INCOME AND REOPENING THE AS SESSMENT IT IS NOT SO FOR THE PURPOSE OF RELYING THEREON FOR FRAMING THE ASSESSMENT? THE FORMATION OF BELIEF AND THE CONSEQUENT INITIATION OF REASSESSMENT PROCEEDINGS I S IT MAY BE APPRECIATED ONLY TOWARD BRINGING SUCH ESCAPED INCOME TO TAX AND NO OTHER. IN FACT SECTION 142A BROUGHT ON STATUTE BY FINANCE (NO. 2) ACT 2004 (W.R.E.F. 15.1 1.1972) IS ONLY TO FACILITATE SUCH REFERRAL BY THE AO TO THE VALUATION OFFICER (EXCEPT WHERE THE ASSESSMENT STANDS CONCLUSIVELY FINALIZED BEFORE 30/9/2004 SO AS NOT TO DISTURB SETTLED MATTERS WHILE THE ONES UNDER DISPUTE - AS THE PRESENT ONE - WOULD NOT BE GOVERNED BY THE EXCEPTION). THE DECISION BY THE JURISDICTIONAL HIGH COURT EXPRESSES THE SAME VIEW AS EXPRESSED EARLIER IN THE DECISION IN THE CASE OF BAWA ABHAI SINGH V. CIT (DY.) 253 ITR 83 (DEL.) AFTER AN ITA NOS. 306 TO 308/COCH/2003 684/COCH/20 06 & CO 3/COCH./2007 5 EXTENSIVE REVIEW OF THE CASE LAW IN THE MATTER FOL LOWING THE DECISION BY THE APEX COURT IN ITO V. SELECTED DALURBAND COAL CO. (P.) LTD . (1996) 217 ITR 597 (SC). THE DECISION BY THE APEX COURT IS BASED O N THE NON-REJECTION OF THE ASSESSEES ACCOUNTS BY THE AO AND WHICH COULD ONLY BE IN THE COURSE OF SOME PROCEEDINGS UNDER THE ACT IMPLYING VALID PROCEEDINGS. THE SAID DECIS ION IS THUS RENDERED IN THE CONTEXT OF SOME VALID PROCEEDINGS. READING THE SAME HARMONIOU SLY I.E. IN CONSISTENCE WITH THE LAW IN THE MATTER AS WELL AS THE OTHER APPLICABLE P ROVISIONS WE UNDERSTAND IT AS TO HOLD THAT THE REFERRAL TO THE VALUATION OFFICER BY THE A SSESSING AUTHORITY IS TO BE PRECEDED BY AND ON SOME VALID BASIS/CAUSE AS SAY THE REJEC TION OF THE BOOKS OF ACCOUNT OF ASSESSEE. IN OTHER WORDS THE SAME THOUGH PERMISSIBLE UNDER THE ACT IS ONLY A POWER TO FACILITATE ASSESSMENT AND THUS IS TO BE EXERCISED WITH DUE C IRCUMSPECTION AND APPLICATION OF MIND AND CANNOT BE ARBITRARY SO THAT THERE OUGHT TO BE ENABLING OR COGENT BASIS THEREFOR. THE PRESENT SET OF CASES IS QUA REASSESSMENTS AND FOR WHICH THE LAW ITSELF PROVID ES FOR A DEFINITE PROCEDURE IN TERMS OF FORMATION OF `REASON TO BELIEVE AS TO THE ESCAPEMENT OF TAXABLE INCOME FOR THE RELEVANT YEAR/S FROM ASSESSM ENT AND WHICH IS JUSTICIABLE. THE EXERCISE OF POWER IN SUCH CASES (I.E. IN REOPENING AN ASSESSMENT) BEING IN RELATION TO ASSESSMENTS THAT HAVE OTHERWISE ATTAINED FINALITY IS RATHER SUBJECT TO A QUALITATIVELY HIGHER THRESHOLD QUALIFICATION BESIDES BEING SUBJE CT TO REVIEW PROCEDURE AND IN APPROPRIATE CASES WRIT JURISDICTION. THAT IS THE TEST OF A COGENT BASIS FOR INTERFERENCE WITH COMPLETED ASSESSMENT PROCESS IS INBUILT IN THE ACT WITH SUITABLE CHECKS AGAINST ANY ARBITRARY USE OF POWER. THE VALIDITY OF THE REASSE SSMENTS IN THE PRESENT CASE IS NOT IN ISSUE HAVING BEEN APPROVED BY THE HONBLE HIGH COU RT. PLACING AN EMBARGO ON THE MATERIALS BEING SOUGHT TO BE RELIED UPON IN SUCH VA LIDATED PROCEEDINGS IS THUS NOT WARRANTED IN LAW AND NEITHER CAN BE TAKEN TO BE THE IMPORT OF THE ORDER BY THE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT (SUPRA) WHICH HAS IN THE CASE OF POORAN MAL V. DIRECTOR OF INSPECTION (INV.) (1974) 93 ITR 505 (SC) CLARIFIED THAT THE AO IS E MPOWERED TO RELY FOR THE PURPOSE OF FRAMING ASSESSMENT ON MA TERIALS GATHERED (SUBJECT TO FOLLOWING THE DUE PROCESS OF LAW) EVEN IF THE SAME ARE OBTAI NED OR SECURED IN A MANNER THAT CANNOT BE SAID TO BE LEGAL OR THE LEGALITY OF WHICH IS SUS PECT STATING THAT IT IS THE RELEVANCY OF THE MATERIALS/EVIDENCE AND NOT THE MECHANISM PER WHICH IT STANDS OBTAINED THAT IS PERTINENT AND MATERIAL. ITA NOS. 306 TO 308/COCH/2003 684/COCH/20 06 & CO 3/COCH./2007 6 FURTHER ON IN THE FACTS OF THE PRESENT CA SE THE AO CLEARLY HOLDS VIDE PARA 3 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS NOT MAINTAI NED A PROPER CONSTRUCTION ACCOUNT AND WAS UNABLE TO FURNISH THE REQUISITE DETAILS. THIS F INDING HAS BEEN FURTHER VERIFIED AND CONFIRMED BY THE FIRST APPELLATE AUTHORITY VIDE HIS IMPUGNED ORDER; THE ASSESSEE BEING UNABLE TO PRODUCE THE RELEVANT DETAILS SO AS TO SH OW BEFORE EITHER AUTHORITY THAT IT HAD PROPERLY ACCOUNTED FOR ALL THE EXPENSES ON CONSTRUC TION. IN VIEW OF THE FOREGOING THE ASSESSEES CASE ON ITS LEGAL GROUND IS NOT TENABLE BOTH ON LEGAL AS WELL AS FACTUAL CONSIDERATIONS. 4.2 COMING TO THE MERITS OF THE CASE I.E. OF THE ADDITION/S EFFECTED U/S. 69B WE FIND THAT THE MATTER HAS BEEN EXAMINED IN EXTENSO BY THE FIRST APPELLATE AUTHORITY DEALING WITH EACH OF THE ISSUES RAISED BY THE ASSESSEE BEFORE HI M DELINEATING HIS FINDINGS AT PGS. 9 TO 14 OF HIS IMPUGNED ORDER (FOR THE FIRST THREE YEARS ). THE SAME STANDS UNREBUTTED. NO INFIRMITY THEREIN OR IN THE VALUATION REPORT DATED 18.1.2000 WHICH FORMS THE BASIS OF THE REVENUES CASE HAS BEEN SHOWN TO US. IN FACT THE ARGUMENTS ADVANCED BEFORE US BY THE LD. AR WERE WITHOUT REFERENCE TO AND DE HORS THE SAME. THE VALUATION REPORT HAS BEEN PREPARED AFTER CARRYING OUT A DETAILED INSPECTION O F THE BUILDING ON 8.1.2000 DULY INCORPORATING THE ASSESSEES REMARKS/OBJECTIONS THE RETO ( REFER PARA 5.2 THEREOF ). THE VALUATION OFFICER HAS HIMSELF TAKEN PAINS TO ADDRES S EACH OF THE ASSESSEES CLAIMS AS WOULD BE APPARENT FROM THE DEDUCTIONS AGGREGATING T O ` 19.62 LAKHS ALLOWED BY HIM (IN VALUING THE STRUCTURE AT ` 41.12 LAKHS). THE PLINTH AREA RATE/S HAS BEEN APPLI ED AS EXCEPT FOR ARCHAEOLOGICAL DRAWINGS NO WORKING DRAWINGS/SE RVICE DRAWINGS WITH DETAILS OF MEASUREMENT; BILLS OF MATERIALS ETC. WERE SUPPLIED TO THE DVO TO PROCEED TO APPLY THE DETAILED ESTIMATION METHOD. ( REFER PARA 4.2 ). AS REGARDS THE NON-APPLICATION OF STATE PWD RATES WHICH CONSTITUTES THE ASSESSEES PRINCIP AL GRIEVANCE BEFORE US THE SAME IS AS THE KERALA PWD IS NOT HAVING ANY PLINTH AREA RATES FOR THE RCC FRAMED STRUCTURE (WITH RCC COLUMN BEAMS AND SLABS) AS OBTAINS IN THE ASS ESSEES CASE ( REFER PARA 3(V) & 3(VI) OF THE IMPUGNED ORDER ). THE STATE PWD RATES AS ALSO SHOWN TO US BY THE LD. DR ARE ONLY FOR TAKING THE STANDARD RENT BASED ON THE CAPI TAL COST OF BUILDING AND IT IS FOR THIS REASON THAT THEY ARE REVISED ONCE IN THREE YEARS. T HE VO HAS FOLLOWED CBDT INSTRUCTION NO. 1671 WHICH PROVIDES STANDARD PLINTH AREA RATES FOR VARIOUS TYPES OF SPECIFICATIONS; THE ITA NOS. 306 TO 308/COCH/2003 684/COCH/20 06 & CO 3/COCH./2007 7 ASSESSEES BUILDING BEING A HOSPITAL BUILDING. THE ASSESSEES CLAIM OF A FIXED RATE HAVING BEEN APPLIED FOR ALL THE YEARS I.E. TO A CONSTRUC TION WHICH SPANNED A PERIOD OF FIVE YEARS HAS BEEN FOUND INCORRECT ON FACTS BY THE LD. CIT(A) ; THE VO HAVING APPLIED THE COST INDEX AND WORKED OUT THE SEPARATE RATE FOR THE CEL LAR AND THE THREE (GROUND FIRST AND SECOND) FLOORS ON THAT BASIS. THE ASSESSEES CLAIM OF HAVING BEEN ALLOWED SELF- SUPERVISION REBATE AT ONLY 1% WAS AGAIN FOUND BY TH E LD. CIT(A) TO BE INCORRECT ON FACTS; IT HAVING BEEN ALLOWED A REBATE OF ` 3.96 LAKHS (AT 7.5%) ON ACCOUNT OF DIRECT PURCHASE OF MATERIALS AND ENGAGEMENT OF LABOUR. THE 1% REBATE I S TOWARD REBATE ON ACCOUNT OF ARCHITECT AND LICENSE FEE (ACCEPTING THE CLAIM OF T HE PARTNERS BROTHER BEING AN ARCHITECT SO THAT HE WORKED FOR THE PROJECT FREE OF COST) AN D WHICH STANDS ENHANCED BY THE LD. CIT(A) FROM 0.5% TO 1%. IN FACT IT IS ON ACCOUNT O F THE ASSESSEES CLAIMS WITH REGARD TO ITS CONSTRUCTION COST ALLOWING IT SUBSTANTIAL RELI EF ON ACCOUNT OF THE VARIOUS EVIDENCES COLLECTED/CLAIMS PREFERRED BY IT IN RELATION THERET O THAT THE APPLICATION OF STATE PWD RATES WOULD EVEN AS POINTED OUT BY THE BENCH DURING HEAR ING LEAD TO A REDUCTION IN ITS VALUATION EVEN BELOW THAT ADOPTED OR CONCEDED TO BY IT PER ITS BOOKS OF ACCOUNTS AS WELL AS THE REGISTERED VALUERS REPORT. THE DECISION BY THE TRIBUNAL IN THE CASE OF P.V. RAJAMMA VS. CIT (ASSISTANT) (SUPRA) WOULD THEREFORE NOT APPLY IN THE FACTS O F THE CASE. WE THEREFORE FIND NO MERIT IN THE ASSESSEES CASE . WE DECIDE ACCORDINGLY. 4.3 FOR THE FOURTH YEAR (AY 2000-01) WHILE TH E REVENUE CHALLENGES THE SET ASIDE OF THE ASSESSMENT ON LEGAL GROUNDS THE ASSESSEES CO PROJECTS ITS GRIEVANCE AS ON ACCOUNT OF NON-ADJUDICATION (A) OF ITS GROUND IN RELATION T O THE IMPUGNED VALUATION OF ITS NEW HOSPITAL BLOCK; AND (B) THE OTHER GROUNDS RAISED BE FORE HIM I.E. OTHER THAN THAT IN RELATION TO THE REOPENING OF ASSESSMENT. THE LD. CIT(A) HAS NOT DECIDED ANY OF THESE ISSUES AS THE REOPENING FOR THE EARLIER (THE FIRST THREE) YEARS H AD ITSELF BEEN STRUCK DOWN BY THE TRIBUNAL VIDE ITS ORDER DATED 21/3/2006 SO THAT FOLLOWING T HE SAME; THE REOPENING BEING FOR THE SAME REASON/S AND QUA THE SAME MATERIAL/S STOOD ALSO CANCELLED BY HIM. AS REGARDS THE LATTER ISSUE (B) THE ASSESSEE STANDS TO BE PREJUDI CED BY THE SAID NON-ADJUDICATION INASMUCH AS THE ASSESSMENT STANDS VALIDATED BY THE HONBLE HIGH COURT. THE MATTER WOULD THEREFORE HAVE TO TRAVEL BACK TO THE FILE OF THE FI RST APPELLATE AUTHORITY IN ALL RELATION TO ALL SUCH GROUNDS; HIS ORDER BEING SILENT THEREON. AS RE GARDS THE FORMER GROUND (A) THE ITA NOS. 306 TO 308/COCH/2003 684/COCH/20 06 & CO 3/COCH./2007 8 ASSESSEES CLAIM THOUGH FACTUALLY CORRECT IS OF N O MOMENT. AS AFORE-SAID THE REOPENING FOR ALL THE YEARS INCLUDING AY 2000-01 HAS BEEN O N THE BASIS OF AND THE ADDITION U/S. 69B EFFECTED IN PURSUANCE TO THE SAME DVOS REPORT . THE ASSESSEES AS WELL AS THE REVENUES CASE IN THE MATTER IS THE SAME I.E. AS FOR THE FIRST THREE YEARS AND WHICH STANDS ADJUDICATED BY US VIDE PARA 4.1 & 4.2 OF THIS ORDER . IN FACT HAD IT BEEN NOT SO AND NO ADJUDICATION BY THE FIRST APPELLATE AUTHORITY FOR T HE EARLIER YEARS AS WELL THE MATTER WOULD REQUIRE REMISSION BACK TO HIS FILE FOR A DECISION O N MERITS LIKE HAS BEEN DONE BY THE HONBLE HIGH COURT IN RELATION TO THE ORDER BY THE TRIBUNAL FOR ALL THE YEARS CONSEQUENT TO THE ASSESSMENTS BEING RESTORED. THE ASSESSEES FIRS T GROUND THEREFORE DESERVES TO FAIL WHILE THE REVENUE CLAIM WOULD SUCCEED. WE DECIDE AC CORDINGLY. 5. IN THE RESULT THE ASSESSEES APPEALS ARE DISMI SSED AND ITS CROSS OBJECTION PARTLY ALLOWED FOR STATISTICAL PURPOSES WHILE THE REVENUE S APPEAL IS ALLOWED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 01 FEBRUARY 2011 GJ COPY TO: 1. M/S. MEDICAL TRUST HOSPITAL NEDUMKANDAM IDUKKI . 2. THE INCOME-TAX OFFICER WARD-2 THODUPUZHA 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II/III KOCHI. 4. THE COMMISSIONER OF INCOME-TAX 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) ITA NOS. 306 TO 308/COCH/2003 684/COCH/20 06 & CO 3/COCH./2007 9