Income Tax Officer-I, Faizabad v. Dr. Mahesh Surtani, Faizabad

ITA 713/LKW/2013 | 2002-2003
Pronouncement Date: 11-11-2014 | Result: Dismissed

Appeal Details

RSA Number 71323714 RSA 2013
Assessee PAN AGFPS6326Q
Bench Lucknow
Appeal Number ITA 713/LKW/2013
Duration Of Justice 1 year(s) 23 day(s)
Appellant Income Tax Officer-I, Faizabad
Respondent Dr. Mahesh Surtani, Faizabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 11-11-2014
Date Of Final Hearing 05-09-2014
Next Hearing Date 05-09-2014
Assessment Year 2002-2003
Appeal Filed On 18-10-2013
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO.713/LKW/2013 ASSESSMENT YEAR:2002 - 03 DR. MAHESH SURTANI C/O M/S HAPPY NURSING HOME MAQBARA FAIZABAD. PAN:AGFPS6326Q VS. INCOME TAX OFFICER - 1 FAIZABAD. (RESPONDENT) (APPELLANT) SHRI ALOK MITRA D. R. APPELLANT BY SHRI RAJIV AGARWAL C. A. RESPONDENT BY 05/09/2014 DATE OF HEARING 11 /11/2014 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I LUCKNOW DATED 29/07/2013 FOR THE ASSESSMENT YEAR 2002 - 2003. 2. THE GROUNDS RAISED BY THE REVENUE AS PER REVISED GROUNDS ARE AS UNDER: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ANNULLING THE ASSESSMENT MADE U/S 141 OF THE I.T. ACT IGNORING THE FACT THAT THE ASSESSMENT WAS RE - OPENED ON THE BASIS OF THE INFORMATION GATHERED DURING ASSESSMENT PROCEEDING FOR THE ASSESSMENT YEAR 2003 - 04 IN THE CASE OF THE ASSESSEE AND NOT ON THE BASIS OF REPORT OF THE D.V.O. AS EVIDENT FROM THE ASSESSMENT ORDER. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1 25 000/ - AS INCOME FROM MEDICAL PRACTICE IGNORING THE F ACT THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE BEFORE THE AO OF THE CONSULTATION FEES RECEIVED FROM THE PATIENTS. 2 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5 72 956/ - AS UNEXPLAINED INVESTMENT IN CONSTRUCTION OF BUILDING IGNORING THE FACT THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE BEFORE THE AO OF THE SOURCE OF INVESTMENT IN THE CONSTRUCTION. 4. THE LD. CTT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2 40 000/ - AS UNSECURED LOAN TO M /S HAPPY NURSING HOME SHOWN IN THE CAPITAL ACCOUNT IGNORING THE FACT THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE BEFORE THE AO ABOUT THE ABOVE UNSECURED LOAN. 5. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2 40 000/ - A S SECURED LOAN SHOWN IN THE CAPITAL ACCOUNT IGNORING THE FACT THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE BEFORE THE AO ABOUT THE ABOVE SECURED LOAN. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSE E SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT THE ASSESSING OFFICERS ACTION IS ONLY ON THE BASIS OF D.V.O. REPORT AND HENCE NOT VALID. HE ALSO SUBMITTED THAT THE REFERENCE TO D.V.O. WAS MADE BY THE ASSESSING OFFICER ON 04/05/2005 WHIC H ITSELF IS NOT VALID. HE PLACED RELIANCE ON THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE REPORTED AT 197 TAXMAN 202. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING ARE R EPRODUCED BY CIT(A) IN PARA 5 OF HIS ORDER AND THEREFORE PARA 5 OF CIT(A) IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 5. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE ASSESSMENT ORDER SUBMISSIONS MADE BY THE APPELLANT AND THE JUDI CIAL PRONOUNCEMENTS IN RESPECT OF THE ISSUES INVOLVED. IN GROUND NO. 1 THE APPELLANT HAS OBJECTED TO THE VALIDITY OF PROCEEDINGS INITIATED ON THE BASIS OF THE REPORT OF A VALUER. THE CRUX OF THE ISSUE IS THE VALIDITY OF NOTICE ISSUED UNDER SECTION 148 OF THE ACT ON THE BASIS OF REASONS RECORDED UNDER SECTION 147 OF THE ACT. I THEREFORE REPRODUCE THE REASONS RECORDED BY THE AO WHICH ARE AS UNDER: - 3 'THE ASSESSEE IS A REGISTERED MEDICAL PRACTITIONER. HE CONSTRUCTED A HOUSE PROPERTY STATED TO BE JOINTLY AL ONG WITH HIS WIFE SMT. MANJU SURTANI. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR AY 2003 - 04 THE PROPERTY WAS REFERRED TO THE VALUATION OFFICER VAL. CELL I.T. DEPTT. ALLAHABAD TO WORK OUT THE YEAR WISE COST OF INVESTMENT IN THE PROPERTY. THE V.O. S UBMITTED HIS REPORT DATED 31.10.2005 ESTIMATING THE TOTAL COST OF CONSTRUCTION IN THE BUILDING AT RS.36 60 000/ - AS AGAINST RS.19 11 290/ - SHOWN BY THE ASSESSEE BEFORE HIM. THUS ACCORDING TO HIS REPORT THERE WAS A TOTAL DIFFERENCE OF RS.17 48 710/ - IN THE COST OF INVESTMENT. THE V.O. HOWEVER REPORTED THE ADMITTED INVESTMENT OF RS.1 66 000/ - IN FY 1999 - 2000 WHEREAS IT WAS ACTUALLY RS.1 50 000/ - IN CASE OF DR. MAHESH SURTANI. FURTHER MRS. MANJU SURTANI HAD ALSO CLAIMED TO HAVE MADE INVESTMENT IN THE PROPER TY IN AY 2000 - 01 AY 2001 - 02 AND IN AY 2004 - 05 RS.75 000/ - RS.1 25 000/ - AND RS.2 50 000/ - RESPECTIVELY. WHEREAS DVO IN HIS REPORT TAKEN THE TOTAL INVESTMENT IN ASSESSMENT YEAR 2004 - 05 AT RS.4 50 000/ - . THUS THE ADJUSTED FIGURES OF INVESTMENTS BY DR. MAHESH SURTANI & SMT. MANJU SURTANI AND THE ADJUSTED UNEXPLAINED INVESTMENT REQUIRING CONSIDERATION IS GIVEN BELOW: ASSESSMENT YEAR AS REPORTED BY DR. MAHESH SURTANI AS REPORTED BY SMT. MANJU SURTANI TOTAL DECLARED INVESTMENT AS ESTIMATED BY DVO (DISTRIBUTED YEAR WISE ACCORDINGLY DIFFERENCE 2000 - 01 1 50 000 75 000 2 25 000 4 30 860 2 05 860 2001 - 02 1 19 386 1 25 000 2 44 386 4 67 983 2 23 597 2002 - 03 2 99 204 2 99 F 204 5 72 956 2 73 725 2003 - 04 1 02 500 1 02 500 1 94 700 92 200 2004 - 05 ' __ 2 50 000 2 50 000 4 78 F 734 2 28 734 2005 - 06 5 40 200 2 50 000 7 90 200 15 14 767 7 24 567 19 11 290 17 48 710 4 HENCE THE DIFFERENCE OF RS.2 73 752/ - REMAINS UNEXPLAINED AND SHOWS UNEXPLAINED INVESTMENT OF THE ASSESSEE. THUS I HAVE REASON TO BELIEVE THAT OWING TO FAILURE ON PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT INCOME OF RS.2 73 752/ - BESIDES THE UNEXPLAINED INVESTMENT OUT OF RS.2 99 204/ - (DECLARED INVESTMENT OF THE ASSESSEE) IF ANY HAS ESCAPED THE ASSESSMENT FOR AY 2002 - 03.' 4.1 FROM THE ABOVE REASONS RECORDED BY THE ASSESSING OFFICER IT IS APPARENT THAT HIS BELIEF THAT SOME INCOME HAS ESCAPED ASSESSMENT IS ONLY ON THE BASIS OF D.V.O. REPORT BECAUSE HE HAS WORKED OUT THE DIFFERENCE IN THE AMOUNT OF INVESTMENT AS PER THE INVESTMENT DECLARED BY THE ASSESSEE AND AS PER D.V.O. REPORT. FOR THE PRESENT YEAR THIS DIFFERENCE HAS BEE N NOTED BY THE ASSESSING OFFICER AT RS.2 73 725/ - . THEREAFTER THE CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AS PER PARA 5.4 OF HIS ORDER WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 5.4 IN THE INSTANT CASE THE REASONS RECOR DED BY THE AO SHOW THAT THERE WERE NO REASONS AVAILABLE WITH THE AO EXCEPT THE REPORT OF A VALUER WHICH SHOWED THE VALUATION OF BUILDING HIGHER THAN THE INVESTMENT DISCLOSED BY THE APPELLANT. IN VIEW OF THE JUDICIAL PRONOUNCEMENTS REFERRED SUPRA I FIND TH AT THE REASONS RECORDED BY THE AO CANNOT BE CONSTRUED AS VALID REASONS FOR REOPENING OF ASSESSMENT AS THESE ARE BASED SOLELY ON THE REPORT OF A VALUER. SINCE THE REASONS RECORDED BY THE AO FOR REOPENING OF ASSESSMENT ARE INSUFFICIENT AS HELD BY VARIOUS CO URTS; THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT IS NOT PROPER AND THERE WAS NO VALID ASSUMPTION OF THE JURISDICTION BY THE ASSESSING OFFICER. I ACCORDINGLY ANNUL THE IMPUGNED ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. GROUND NO. 1 IS ALLOWED IN FAVOUR OF THE APPELLANT. 4.2 FROM THE ABOVE PARA FROM THE ORDER OF CIT(A) IT IS SEEN THAT HE HAS GIVEN A CLEAR FINDING THAT THERE WAS NO REASON AVAILABLE WITH THE ASSESSING OFFICER EXCEPT THE REPORT OF A VALUER WHICH SHOWED THE VALUATION OF THE BUIL DING HIGHER THAN THE INVESTMENT DISCLOSED BY THE ASSESSEE. WE HAVE ALREADY REPRODUCED THE REASONS RECORDED BY THE ASSESSING OFFICER AND IT IS 5 SEEN THAT THE ONLY BASIS REGARDING THE ASSESSING OFFICERS BELIEF THAT SOME INCOME HAS ESCAPED ASSESSMENT IS D.V .O.S REPORT ONLY. THE CIT(A) HAS NOTED DOWN VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME - TAX VS DHARIYA CONSTRUCTION CO. [2010] 328 ITR 515 (SC) WHEREIN IT WAS HELD THAT THE OPINION GIVEN BY THE DISTRICT VALUATION OFFICER IS NOT PER SE INFORMATION FOR THE PURPOSE OF REOPENING AN ASSESSMENT UNDER SECTION 147 OF THE INCOME - TAX ACT. CONSIDERING ALL THESE FACTS AND LEGAL POSITION WE DO NOT FIND ANY REASON TO INTERFERE I N THE ORDER OF CIT(A). 5. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 /11/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5.D.R. I.T.A.T. LUCKNOW ASSTT. REGISTRAR