Sh. Rakesh Kumar, Mandi Gobindgarh v. DCIT, Mandi Gobindgarh

ITA 507/CHANDI/2011 | 2007-2008
Pronouncement Date: 27-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 50721514 RSA 2011
Assessee PAN ACIPK2561J
Bench Chandigarh
Appeal Number ITA 507/CHANDI/2011
Duration Of Justice 2 month(s) 18 day(s)
Appellant Sh. Rakesh Kumar, Mandi Gobindgarh
Respondent DCIT, Mandi Gobindgarh
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 27-07-2011
Assessment Year 2007-2008
Appeal Filed On 09-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NO. 507/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI RAKESH KUMAR VS. THE DCIT CIRCLE PROP M/S POOJA STEEL & AGRO INDUSTRIES MANDI GOBIN DGARH MANDI GOBINDGARH PAN NO. ACIPK2561J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY: SMT. SARITA KUMARI ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) PATIALA DATED 27.2.2011 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT 1961. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER:- 1. THAT THE LD. CIT(A) HAS ERRED IN GIVING ONLY PAR T RELIEF OUT OF ADDITION OF RS. 7 52 280/- AND UPHOLD ING BALANCE OF ADDITION MADE BY THE ASSESSING OFFICER O N ACCOUNT OF DIFFERENCE IN THE VALUATION AS SHOWN BY THE APPELLANT OF RS. 11 25 000/- AND VALUATION MADE BY THE GOVT. APPROVED VALUER OF RS. 18 77 280/- ON CONSTRUCTION OF HOUSE NO. 72 SECTOR 5/C SHASTRI NAGAR MANDI GOBINDGARH. 2 2. THAT THE LD. CIT(A) HAS ALSO ERRED IN UPHOLDING ADDITION OF RS. 1 25 000/- MADE BY THE ASSESSING OFFICER IN RESPECT OF THE GIFT RECEIVED BY THE APPE LLANT FROM AUNT SMT. PUSHPA RANI AND NOT TAKING INTO ACCOUNT THIS AMOUNT FOR THE PURPOSE OF INVESTMENT I N HOUSE NO.72 SECTOR 5/C SHASTRI NAGAR MANDI GOBINDGARH. 3. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING ADDITION OF RS. 60 000/- MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF HOUSE HOLD EXPENSES WITHOUT CONSIDERI NG THE STATUS OF THE FAMILY AND PAST HISTORY OF THE CA SE. 3. THE ISSUE IN GROUND NO.1 RAISED BY THE ASSESSEE IS AGAINST THE ESTIMATION OF INVESTMENT IN THE CONSTRUCTION OF THE HOUSE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFF ICER NOTED THE ASSESSEE TO HAVE CONSTRUCTED A HOUSE I.E. H.NO. 72 SECTOR 5-C SHASTRI NAGAR MANDI GOBINDGARH. THE ASSESSEE CLAIMS TO HA VE CONSTRUCTED 1864 SQUARE FEET OF COVERED AREA AT A COST OF RS. 10 LAK HS DURING THE YEAR SOURCES OF WHICH WAS EXPLAINED TO BE LOAN RAISED FR OM STATE BANK OF PATIALA. THE SAID CONSTRUCTION OF THE HOUSE WAS CO MPLETED DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAD NOT MAINTAIN ED ANY RECORDS IN RESPECT OF CONSTRUCTION OF THE HOUSE. THE ASSESSI NG OFFICER REFERRED THE CASE TO THE VALUATION OFFICER PATIALA U/S 142A OF THE INCOME TAX ACT. THE DISTRICT VALUATION OFFICER ESTIMATED THE COST O F CONSTRUCTION AT RS. 27 45 000/- OVER THE PERIOD OF YEARS STARTING FROM ASSESSMENT YEAR 2006- 07 TO 2009-10. THE ASSESSEE WAS SHOW CAUSED AS TO WHY COST OF CONSTRUCTION DURING THE YEAR BE NOT ADOPTED AT RS. 18 77 280/- AGAINST RS. 10.00 LAKHS SHOWN BY THE ASSESSEE. THE ASSESSING OFFICER ISSUED LETTER DATED 25.11.2009 WHICH IS EXTRACTED UNDER PARA 3.4 AT PAGE 3 OF THE ASSESSMENT ORDER. AS NOTED BY THE ASSESSING OFFICER VIDE PARA 3.5 THE 3 ASSESSEE DID NOT RAISE ANY OBJECTION ON THE VALUATI ON REPORT OF THE DISTRICT VALUATION OFFICER IN SPITE OF ATTENDING THE HEARI NG TWICE I.E. 2.12.2009 AND 9.12.2009. THE ASSESSING OFFICER MADE AN ADDIT ION OF RS. 7 52 280/- U/S 69B OF THE INCOME TAX ACT. IN APPEAL THE CONT ENTION OF THE ASSESSEE WAS THAT THE DISTRICT VALUATION OFFICER HAD ADOPTED THE CPWD RATES FOR VALUING THE PROPERTY SITUATED IN PUNJAB WHICH WERE GENERALLY APPLIED TO MULTI STORIED BUILDING. THE CLAIM OF THE ASSESSEE WAS THAT THE SAID RATES WERE ON A HIGHER SIDE. FURTHER THE DISTRICT VALU ATION OFFICER HAD NOT GIVEN A CREDIT OF 10% ON ACCOUNT OF SELF SUPERVISIO N. FURTHER ALLOWANCE WAS TO BE ALLOWED ON ACCOUNT OF CERTAIN ITEMS WHICH AS PER THE ASSESSEE WERE TAKEN ON THE HIGHER SIDE. THE SAID OBJECTION O F THE ASSESSEE WAS CONFRONTED TO ASSESSING OFFICER WHO SUBMITTED ITS R EPORT. THE CIT(A) DIRECTED THE ASSESSING OFFICER TO GIVE BENEFIT OF 1 0% REBATE ON SELF SUPERVISION AND 1% FOR BUILDERS EFFORT. THE ASSES SEE IS IN APPEAL AGAINST THE AFORESAID PARTIAL RELIEF OUT OF ADDITION OF RS. 7 52 280/-. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFF ICER HAD APPLIED CPWD RATES WHEREAS THE PWD RATES WERE ON THE LOWER SIDE. THE LD. DR PLACED RELIANCE ON THE ORDER OF CIT(A). 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD CO NSTRUCTED PART OF ITS HOUSE IN MANDI GOBINDGARH. DURING THE YEAR UNDER C ONSIDERATION THE ASSESSEE CLAIMS TO HAVE INCURRED EXPENDITURE OF RS. 11 25 000/-. THE ASSESSING OFFICER HAD REFERRED THE VALUATION OF THE COST OF CONSTRUCTION OF THE SAID HOUSE TO THE DISTRICT VALUATION OFFICER UN DER THE PROVISIONS OF SECTION 142A OF THE ACT. AS PER THE REPORT OF THE DISTRICT VALUATION OFFICER THE COST OF CONSTRUCTION SHOWN BY THE ASSE SSEE WAS ON THE LOWER SIDE FOR THE YEAR UNDER CONSIDERATION. THE VALUE ES TIMATED BY THE DISTRICT 4 VALUATION OFFICER WAS RS. 18 77 280/- AS AGAINST RS . 11 25 000/- SHOWN BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS THE ASSESSEE DID NOT RAISE ANY OBJECTION TO THE SAID RE PORT OF DISTRICT VALUATION OFFICER ALTHOUGH THE ASSESSING OFFICER IS SUED A SHOW CAUSE NOTICE TO THE ASSESSEE AS PER PARA 3.4 OF THE ASSES SMENT ORDER. BEFORE THE CIT(A) THE CONTENTION OF THE ASSESSEE WAS THAT RAT ES OF CPWD FOR VALUING THE PROPERTY WERE ON THE HIGHER SIDE AND FURTHER TH E VALUER HAD NOT ALLOWED CERTAIN CONCESSIONS ON ACCOUNT OF SELF SUPE RVISION AND BUILDERS PROFIT. THE CIT(A) ALLOWED THE BENEFIT OF 10% ON S ELF SUPERVISION AND 1% ON BUILDERS EFFORT. THE PLEA OF THE ASSESSEE B EFORE US WAS THAT THE CPWD RATES WERE ON HIGHER SIDE AND FURTHER THE VALU ATION WAS AN ESTIMATION MADE BY THE DISTRICT VALUATION OFFICER. WE FIND NO MERIT IN THE STAND OF THE ASSESSEE AS THE ASSESSEE HAS FAILE D TO PIN POINT THE DIFFERENCE IN RATES ADOPTED BY THE DISTRICT VALUATI ON OFFICER AND THOSE CLAIMED BY THE ASSESSEE. FURTHER THE CIT(A) HAD A LREADY ALLOWED THE RELIEF ON ACCOUNT OF BENEFIT OF 10% FOR SELF SUPER VISION AND 1% FOR BUILDERS EFFORT AND IN THE ABSENCE OF ANY OTHER EVI DENCE BEING FURNISHED BY THE ASSESSEE TO POINT OUT ANY DISCREPANCY IN THE REPORT OF THE DISTRICT VALUATION OFFICER WE FIND NO MERIT IN GROUND NO.1 RAISED BY THE ASSESSEE. UPHOLDING THE ORDER OF CIT(A) WE DISMIS S THE GROUND NO.1 RAISED BY THE ASSESSEE. 5. THE ISSUE IN GROUND NO.2 RAISED BY THE ASSESSEE IS AGAINST THE ADDITION MADE ON ACCOUNT OF GIFT RECEIVED BY THE AS SESSEE. THE ASSESSEE CLAIMED TO HAVE RECEIVED CASH GIFT OF RS. 1 25 000/ - FROM SMT. PUSHPA MATA ON 12.3.2007. THE ASSESSEE FURNISHED A COPY OF THE GIFT DEED AND COPY OF THE BANK ACCOUNT FROM WHERE THE WITHDRAWAL OF RS. 1 25 000/- WAS MADE. THE ASSESSING OFFICER OBSERVED THAT THE ASSES SEE HAD DURING THE 5 ASSESSMENT PROCEEDINGS CLAIMED TO HAVE INVESTED RS. 10 LAKHS IN THE CONSTRUCTION OF THE HOUSE WHICH IN TURN WAS RAISED AS LOAN FROM STATE BANK OF PATIALA. HOWEVER BEFORE THE DISTRICT VALU ATION OFFICER THE ASSESSEE DECLARED AN INVESTMENT OF RS. 11 25 000/- BY CLAIMING THAT HE HAD RECEIVED A GIFT OF RS. 1 25 000/-. THE ASSESSI NG OFFICER HELD THE SAME TO BE AN AFTER THOUGHT AND ASKED THE ASSESSEE TO PRODUCE SMT. PUSHPA MATA. THE ASSESSEE DURING THE ASSESSMENT PROCEEDING S SUBMITTED THAT THE LADY WAS SUFFERING FROM CANCER AND WAS UNABLE TO AT TEND THE OFFICE. THE GIFT BEING MADE IN CASH AND THE DONOR BEING NOT PRO DUCED BY THE ASSESSEE THE GENUINENESS OF THE TRANSACTIONS WAS DOUBTED AND ADDITION OF RS. 1 25 000/- WAS MADE. THE CIT(A) UPHELD THE AFORESA ID ADDITION OF RS. 1 25 000/-. THE LD. AR FOR THE ASSESSEE POINTED O UT THAT ADDITION IN THE PRESENT CASE WAS MADE AS THE ASSESSEE WAS UNABLE TO PRODUCE THE DONOR ALTHOUGH THE ASSESSEE HAD ESTABLISHED THE IDENTITY AND CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THE LD. DR PL ACED RELIANCE ON THE FINDINGS OF THE ASSESSING OFFICER AND CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ASSESSEE CLAIMED TO HAVE RECEIVED GIFT OF RS. 1 25 000/- IN CASH FROM SMT. PUSHPA MATA ON 12.3.2007. THE ATTESTED COPY OF THE GIFT DEED IS PLACED AT PAGE 11 OF THE PAPER BOOK. IN THE AFORESAID GIFT D EED IT HAS BEEN MENTIONED THAT THE SAID GIFT BEING MADE BY THE DONO R TO HIS NEPHEW IN CASH AFTER WITHDRAWAL OF THE SAID AMOUNT FROM HER B ANK ACCOUNT WITH CENTURIAN BANK OF PUNJAB LIMITED ON 12.3.2007. TH E AFFIDAVIT OF THE DONOR DATED 21.12.2009 IS PLACED AT PAGE 12 OF THE PAPER BOOK. THE BANK ACCOUNT OF THE DONOR IS PLACED AT PAGE 10 OF THE PA PER BOOK. IN VIEW OF THE ABOVE SAID EVIDENCE BEING FURNISHED BY THE ASSE SSEE WE ARE OF THE VIEW THAT THE ASSESSEE HAD DISCHARGED THE ONUS OF P ROVING THE IDENTITY OF 6 THE DONOR HER CREDITWORTHINESS AND ALSO ESTABLISHE D THE GENUINENESS OF THE TRANSACTIONS. THE SAID GIFT HAS BEEN MADE BETW EEN RELATIVES AND THE SOURCES OF THE SAID GIFT STANDS ESTABLISHED BY THE WITHDRAWAL FROM THE BANK ACCOUNT OF THE DONOR COPY OF WHICH IS AVAILAB LE ON RECORD. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO MERIT IN THE AFORESAID ADDITION OF RS. 1 25 000/- AND HENCE THE ASSESSING OFFICER IS DIRECTED TO DELETE THE SAME. THE GROUND NO.2 RAISE D BY THE ASSESSEE IS ALLOWED. 7. THE GROUND NO.3 RAISED BY THE ASSESSEE RELATES T O THE ESTIMATION OF HOUSE HOLD EXPENDITURE. THE ASSESSEE HAD SHOWN HOU SE HOLD EXPENSES OF RS. 60 000/- FOR A FAMILY OF FIVE MEMBERS AND HIS W IFE HAD WITHDRAWN RS. 28 445/- ON ACCOUNT OF ELECTRICITY BILLS PAYMENTS A ND RS. 46 845/- FOR SCHOOL FEE OF CHILDREN. THE ASSESSING OFFICER ESTIM ATED THE HOUSE HOLD EXPENSES AT RS. 1 20 000/- RESULTING IN AN ADDITION OF RS. 60 000/- WHICH WAS UPHELD BY THE CIT(A). WE FIND NO MERIT IN THE AFORESAID ADDITION I.E. ESTIMATION OF HOUSEHOLD EXPENDITURE BEING MADE BY T HE AUTHORITIES BELOW IN THE ABSENCE OF ANY EVIDENCE BEING FOUND AGAINST THE ASSESSEE. WE DELETE THE ADDITION OF RS. 60 000/-. GROUND NO.3 RAISED BY THE ASSESSEE IS THUS ALLOWED. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF JULY 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : JULY 2011 RKK 7 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH