ITO, CHENNAI vs. P.MANDIRA MURTHY, CHENNAI

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ITA 1121/CHNY/2017Status: DisposedITAT Chennai14 May 2018AY 2005-063 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The tribunal upheld the CIT(A)'s order, finding a violation of natural justice as the DVO's report was not provided to the assessee for rebuttal. The tribunal also noted that the assessee had produced books of accounts and vouchers for construction, which the Assessing Officer had not faulted.

What were the facts?

The Assessing Officer made an addition based on the Departmental Valuation Officer's (DVO) higher valuation of a property. The assessee had disclosed a lower valuation. The CIT(A) deleted the addition.

What were the issues?

Whether the addition made based on DVO's valuation without providing the report to the assessee for rebuttal is valid. Whether the CIT(A) was justified in deleting the addition based on the assessee's production of books of accounts and vouchers.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘ C’ SMC BENCH : CHENNAI

Before: SHRI GEORGE MATHAN

आदेश / O R D E R

1.

This is an appeal filed by the Revenue against the order of the Commissioner of Income-tax (Appeals)-4, Chennai in ITA No.330/2013-14/A.Y 2005-06/CIT(A)-4, dated 27.02.2017 for the assessment year 2005-06.

2.

Shri Mr.B. Sagadevan represented on behalf of the Revenue, and Shri A.S. Sriraman represented on behalf of the Assessee.

3.

It was submitted by the ld.D.R that assessee is an individual, who is running a provision store, convention hall and having income from house property. It was a submission that assessee had during the relevant to assessment year disclosed an investment in the property at 32, Seethammal Colony. The ld. Assessing Officer had referred the matter to Departmental Valuation Officer (DVO), who have valued the property at `76,68,800/- as against `43,34,091/- disclosed by the assessee. The ld. Assessing Officer had adopted the DVO’s valuation and made the addition, being the differential amount as per the value of cost of construction of the property, admitted by the assessee and the value determined as per the DVO. It was a submission that on appeal, Ld.CIT(A) had deleted the addition on the ground that DVO’s report was never given to the assessee for rebuttal, and the same was given to the assessee only in the course of Remand Proceedings. It was submitted by ld.D.R that the deletion made by Ld.CIT(A) was liable to be reversed.

4.

In reply, ld.A.R vehemently supported the order of Ld.CIT(A).

5.

I have considered the rival submissions. A perusal of the order of the CIT(Appeals) at para-19 clearly shows that in respect of the valuation done by the DVO, there has been a clear violation of natural justice. Further perusal of para-19 of his order clearly shows that the ld.CIT(A) had deleted the addition on the ground that books of accounts and relevant bills and vouchers, pertaining to the construction work maintained by the assessee, were produced before the ld. Assessing Officer. These findings of the ld.CIT(A) has not been dislodged by the Revenue. This being so, as it is noticed that the books of accounts maintained by the assessee in respect of construction of building have been produced before the ld. Assessing Officer and no defects have been pointed out by ld. Assessing Officer, I find no error in the findings of the Ld.CIT(A), which calls for any interference in the order of the CIT(Appeals). Accordingly, the order of the CIT(Appeals) stands confirmed.

6.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court after conclusion of hearing on 14yh May, 2018, at Chennai.

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