JAGANNATH RAMACHANDRA JAMADAR,BIDAR vs. ITO, BIDAR

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ITA 515/BANG/2016Status: DisposedITAT Bangalore22 February 2017AY 2007-083 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee was not afforded sufficient time to file objections to the DVO's report and that the issue required proper adjudication by the AO. Therefore, the matter was set aside and restored to the AO for fresh adjudication.

What were the facts?

The assessee made investments in building construction which were not accepted by the AO, who referred the matter to the DVO. The DVO estimated the cost of construction significantly higher than the assessee's shown investments. The assessee contended that sufficient time was not given to file objections to the DVO's report.

What were the issues?

Whether the assessee was given adequate opportunity to object to the DVO's valuation report and whether the AO properly adjudicated the unexplained investment in building construction.

Which sections of the Income-tax Act were involved?

Section 69,Section 69B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI SUNIL KUMAR YADAV & SHRI INTURI RAMA RAO

For Appellant: Shri Kedarnath Shetkar, Advocate
For Respondent: Shri M.K. Biju, JCIT(DR)
Hearing: 23.01.2017Pronounced: 22.02.2017

Date of hearing : 23.01.2017 Date of Pronouncement : 22.02.2017 O R D E R Per Sunil Kumar Yadav, Judicial Member

These appeals are preferred by the assessee against the consolidated order of the CIT(A) pertaining to AYs 2007-08 to 2009-10 on a solitary ground that CIT(A) has erred in confirming the addition made on account of unexplained investment in construction of the building.

2.

During the course of hearing our attention was invited to the fact that assessee has made certain investments in the construction of building which was not accepted by the AO and he made a reference to the DVO. The DVO has estimated the cost of construction during all the three years at Rs. 83,42,900/- against the investments shown by the assessee at Rs. 41,66,000/- (for AY 2007-08). The AO has issued show cause to the assessee but the assessee did not file objection to the valuation report, he rather filed registered valuer’s report. According to assessee sufficient time was not afforded to the assessee by the AO to file the objections with respect to DVO’s report. He, however, filed registered valuer’s report which was not taken into account by the AO.

3.

It was also contented before us that assessee has not controverted the finding of the DVO by filing objection to it. It is for the assessee to point out the specific defects in the valuation report.

4.

During the course of hearing the ld. Counsel for the assessee has tried to explain the fallacy in the valuation report. Since all these arguments are raised for the first time before the Tribunal, we are of the view that this issue requires adjudication by the AO. It is also noticed from the orders of lower authorities that during the course of assessment proceedings, sufficient time was not afforded to the assessee to file objection to the DVO’s report. Though assessee has filed registered valuer’s report, but he is also required to file objections pointing out the specific defects in the DVO’s report. In the absence of all these relevant information, we are of the view that this issue requires proper adjudication by the AO. We accordingly set aside the order of CIT(A) and restore the issue to the file of AO to readjudicate the issue afresh, after affording opportunity of being heard to the assessee.

5.

In result, the appeals of assessee are allowed for statistical purposes.

Pronounced in the open court on this 22nd day of February, 2017.

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