M/S ISLAMIC ACADEMY OF EDUCATION vs. ACIT,

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ITA 64/BANG/2014Status: DisposedITAT Bangalore03 May 2017AY 2004-053 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the AO was bound to follow the directions of the CIT under Section 263, which had attained finality. Therefore, the additions made based on the DVO's report were justified.

What were the facts?

The assessee-trust appealed against the CIT(A)'s order sustaining additions made by the AO. The additions were based on the DVO's report regarding the cost of construction of buildings, following a direction from the CIT under Section 263.

What were the issues?

Whether the AO was justified in making additions under Section 69 based on the DVO's report when directed by the CIT under Section 263.

Which sections of the Income-tax Act were involved?

Section 69,Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CIRCUIT BENCH AT MANGALURU

Before: SHRI INTURI RAMA RAO & SHRI SUDHANSHU SRIVASTAVA

For Appellant: Shri P.Dinesh, Advocate, Shri R.N.Siddappaji, Addl.CIT &, Shri S.Sreenivasan, DCIT (DRs)
Hearing: 03/02/2017Pronounced: 03/05/2017

O R D E R & Per INTURI RAMA RAO, AM : These are appeals filed by the assessee-trust directed against the order of the CIT(A), Mysore, dated 15/10/2013 for the assessment years 2004-05, 2006-07 and 2007-08.

2.

The only issue that arises for consideration in all these appeals is whether the AO was justified in making addition u/s 69 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short][hereinafter referred to as 'the Act' for short] based on to 66/Bang/2014 Page 2 of 3 DVO’s report in respect of cost of construction of buildings. The impugned orders have been passed pursuant to the directions of the Hon’ble CIT u/s 263 dated 23/03/2010 to make addition of difference in cost of construction shown in books of account and the cost of construction as per the DVO report. This issue was not open for consideration before the AO. It is bounden duty of the AO to follow the directions of the CIT in the order u/s 263 and the order passed u/s 263 has attained finality. Therefore, we do not find any reason to interfere with the orders passed by the CIT(A) sustaining the addition.

3.

Reliance placed by the learned counsel for the assessee on the decision of the Hon’ble High Court in the case of S.S.Jyothiprakash vs. Addl.CIT in dated 07/06/2016 is not applicable to the facts of the present case having regard to the fact that in that case, the Hon’ble High Courft felt that no addition u/s 69 can be made without establishing that consideration over and above what is stated in the registered sale deed has flown to the assessee. The facts of the present case are totally different.

4.

In the result, the appeals filed by the assessee are dismissed.

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