Commissioner Of Income Tax-Ii vs. Shri Rajeev Kumar Mehta

ITA NO.53/2009

04/03//2014 Shri Sanjay Lal, learned counsel for the appellant. This is a revenues appeal under section 260-A of the Income Tax Act, challenging the concurrent orders passed by the Commissioner(Appeals) and the Income Tax Appellate Tribunal, in the matter of permitting addition of certain amounts spent by the assessees towards construction of house on the ground that certain amount has not been disclosed. Facts in brief go to show that the assessees are individuals and they were assessed for income for the year 2000-2001, a search and seizure was conducted under section 132 of the Income Tax Act and it was found that the assessees have constructed a house. Construction took place during the period 1999-2000 and 2000-2001 and cost of house was shown at Rs.26,27,730/-, which included cost of land in the regular return filed by the assessees. If the cost of land was excluded, the cost of construction in two years comes to Rs.19,81,408/-. Based on search and seizure done, the matter was referred to the Departmental Valuation Officer, who submitted report and valued the property at Rs.41,55,000/-. There was a difference of Rs.21,73,592 and as both assessees were joint owners of the property to the extent of 50% each, the addition of Rs.10,86,796/- each was made in the hands of both the assessees. The appeal was preferred and it was held by the Appellate Authority that addition on account of difference in cost of construction could not be made in block assessment and therefore, the matter was remanded . Finally, assessment was made by the Assessing Officer and undisclosed investment of Rs.16,99,521/- in all was deducted and the shares of each assessee came to Rs.8,49,760/-. The matter was challenged by the assessees before the Commissioner, Income Tax and the Appellate Tribunal and the only question that was canvassed before the authorities were with regard to the fact as to why the Assessing Officer had re-opened assessment based on the valuation report based on the judgment rendered by this court in the case of CTI Vs. S.R. Construction 2002 257 ITR 502 (MP). It has been held by the Tribunal that from books of account and vouchers that were seized during the course of seizure and the Assessing Officer had not pointed out any defect of irregularity in these books . It was also found that there was no concealment by the assessees with regard to construction in the books of account, that apart it is found that no loose papers or vouchers are seized, accordingly, it has been held that opening of the assessment merely on the basis of valuation report was not proper, holding so the appeal has been decided against the revenue. Even though Shri S.M.Lal, learned counsel for the appellant tried to indicate that based on judgment in the case of Vippy Processors Pvt. Ltd. Vs. Commissioner of Income Tax, (2001) 249 ITR 0007, orders of the authorities are not proper. From perusal of the order passed in the case of Vippy Processors Pvt.Ltd.(supra), it is seen that in the particular case apart from the report of the Departmental Valuation Officer, the Assessing Officer from the records available on record had also found that there was certain material which disclosed that the assessee has not accounted for various amounts based on entries made which remained unexplained.. It was based on these factors that case was decided in the case of Vippy Processors Pvt.Ltd.(supra). On the contrary in the present case there is no defect of discrepancy found in the accounts book and therefore merely based on the report of departmental valuer, it has been held that re-opening of the assessment was not permissible. In doing so, no error has been committed by the Appellate Authority and the Tribunal warranting interference. Accordingly, the appeal is dismissed, as no substantial question of law ares for consideration in this appeal. (RAJENDRA MENON) (J.K.JAIN) JUDGE JUDGE hsp