Sargam Cinema v. CIT

328 ITR 513Supreme Court of India2010#561 most cited

What is Sargam Cinema v. CIT authority for?

For an Assessing Officer to make a valid reference to the Departmental Valuation Officer for the estimation of the cost of construction, the books of accounts must first be rejected under Section 145(3) of the Income-tax Act.

172

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2012 to 2026.

Also referred to as

Sargam Cinema · CIT v Sargam Cinema · Section 145(3) · Section 142A · DVO reference · cost of construction estimation · rejection of books of accounts · Assessing Officer powers · valuation · assessment procedure · 328 ITR 513

Also reported as

197 Taxmann 203

Sections most often in play

Section 143(3)Section 132Section 153ASection 69BSection 292CSection 115BBESection 132(4)Section 153C

Issues it is cited on

section 142asection 131(1)(d)section 38surrender of incomesection 55asection 150mat creditsection 69baccumulated profitssection 158bdsection 131(1)retracted statement

Judgments citing Sargam Cinema v. CIT

ACIT, New Delhi vs. Sh. Inderpal Singh Wadhawan, New Delhi

In the result ground No. 2 of the appeal of the assessee is allowed

ITA 952/DEL/2013[2007-08]Status: DisposedITAT Delhi08 Jul 2016AY 2007-08

Bench: I.C.Sudhir & Shri Prashant Maharishiinder Pal Singh Wadhawan, Jcit, E/1/7, Ii Nd Floor, East Patel Vs. Circle-33, Nagar, New Delhi New Delhi Pan: Aarps6904L (Appellant) (Respondent) Acit, Inder Pal Singh Wadhawan, Circle-33(1), Room No.1505, E/1/7, Ii Nd Floor, Vs. 15Th Floor, Dr. Shyama Prasad East Patel Nagar, New Delhi Mukherjee Civil Centre, New Delhi Pan: Aarps6904L (Appellant) (Respondent) Inder Pal Singh Wadhawan, Acit, E/1/7, Ii Nd Floor, East Patel Circle-33, Vs. Nagar, New Delhi New Delhi Pan: Aarps6904L (Appellant) (Respondent) Acit, Inder Pal Singh Wadhawan, Circle-33(1), Room No.1505, 15Th E/1/7, Ii Nd Floor, Vs. Floor, Dr. Shyama Prasad East Patel Nagar, New Delhi Mukherjee Civil Centre, Pan: Aarps6904L New Delhi (Appellant) (Respondent)

For Appellant: Sh. Ajay Wadhwa, AdvFor Respondent: Sh. Vijay Verma, CIT DR
Section 142Section 143(3)Section 68

…adhawan ITA No 1155 & 1589 / Del/2013 & 1489 & 952 /Del/2013 A Y 2007-08 & 2008-09 Page 18 of 59 rejecting the books of accounts is not justified in the light of the principle laid down by the Hon'ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513. The Hon'ble Apex Court in this case have held that without rejecting the books of accounts no addition can be made towards the construction on the recommendation of the District Valuation Officer. The quantitative details were furnished by the appellant along with the return of income and was duly reflected in the trading account. Therefore, the…

ACIT, New Delhi vs. M/S Vardan Fashion, New Delhi

In the result ground No. 3 of the appeal of the assessee is dismissed

ITA 950/DEL/2013[2007-08]Status: DisposedITAT Delhi08 Jul 2016AY 2007-08

Bench: I.C.Sudhir & Shri Prashant Maharishivardan Fashions, Jcit, E-1/7, 2Nd Floor, East Patel Range-33, Vs. Nagar, New Delhi New Delhi Pan:Aacfv0423H (Appellant) (Respondent) Acit, Vardan Fashions, Circle-33(1) E-1/7, 2Nd Floor, East Patel Vs. New Delhi Nagar, New Delhi Pan:Aacfv0423H (Appellant) (Respondent)

For Appellant: Sh. Ajay Wadhwa, AdvFor Respondent: Sh. Vijay Verma, CIT DR
Section 142Section 40

…ndirectly enhanced the GP rate of the appellant to 34.15%. The disturbance of the GP rate without rejecting the books of accounts is not justified in the light of the principle laid down by the Hon'ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513. The Hon'ble Apex Court in this case have held that without rejecting the books of accounts no addition can be made towards the construction on the recommendation of the District Valuation Officer. The quantitative details were furnished by the appellant along with the return of income and was duly reflected in the trading account. Therefore, the…

Mr. Inder Pal Singh Wadhawan, New Delhi vs. ACIT, New Delhi

In the result ground No. 2 of the appeal of the assessee is allowed

ITA 1589/DEL/2013[2008-09]Status: DisposedITAT Delhi08 Jul 2016AY 2008-09

Bench: I.C.Sudhir & Shri Prashant Maharishiinder Pal Singh Wadhawan, Jcit, E/1/7, Ii Nd Floor, East Patel Vs. Circle-33, Nagar, New Delhi New Delhi Pan: Aarps6904L (Appellant) (Respondent) Acit, Inder Pal Singh Wadhawan, Circle-33(1), Room No.1505, E/1/7, Ii Nd Floor, Vs. 15Th Floor, Dr. Shyama Prasad East Patel Nagar, New Delhi Mukherjee Civil Centre, New Delhi Pan: Aarps6904L (Appellant) (Respondent) Inder Pal Singh Wadhawan, Acit, E/1/7, Ii Nd Floor, East Patel Circle-33, Vs. Nagar, New Delhi New Delhi Pan: Aarps6904L (Appellant) (Respondent) Acit, Inder Pal Singh Wadhawan, Circle-33(1), Room No.1505, 15Th E/1/7, Ii Nd Floor, Vs. Floor, Dr. Shyama Prasad East Patel Nagar, New Delhi Mukherjee Civil Centre, Pan: Aarps6904L New Delhi (Appellant) (Respondent)

For Appellant: Sh. Ajay Wadhwa, AdvFor Respondent: Sh. Vijay Verma, CIT DR
Section 142Section 143(3)Section 68

…adhawan ITA No 1155 & 1589 / Del/2013 & 1489 & 952 /Del/2013 A Y 2007-08 & 2008-09 Page 18 of 59 rejecting the books of accounts is not justified in the light of the principle laid down by the Hon'ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513. The Hon'ble Apex Court in this case have held that without rejecting the books of accounts no addition can be made towards the construction on the recommendation of the District Valuation Officer. The quantitative details were furnished by the appellant along with the return of income and was duly reflected in the trading account. Therefore, the…

Mr. Inder Pal Singh Wadhawan, New Delhi vs. JCIT, New Delhi

In the result ground No. 2 of the appeal of the assessee is allowed

ITA 1155/DEL/2013[2007-08]Status: DisposedITAT Delhi08 Jul 2016AY 2007-08

Bench: I.C.Sudhir & Shri Prashant Maharishiinder Pal Singh Wadhawan, Jcit, E/1/7, Ii Nd Floor, East Patel Vs. Circle-33, Nagar, New Delhi New Delhi Pan: Aarps6904L (Appellant) (Respondent) Acit, Inder Pal Singh Wadhawan, Circle-33(1), Room No.1505, E/1/7, Ii Nd Floor, Vs. 15Th Floor, Dr. Shyama Prasad East Patel Nagar, New Delhi Mukherjee Civil Centre, New Delhi Pan: Aarps6904L (Appellant) (Respondent) Inder Pal Singh Wadhawan, Acit, E/1/7, Ii Nd Floor, East Patel Circle-33, Vs. Nagar, New Delhi New Delhi Pan: Aarps6904L (Appellant) (Respondent) Acit, Inder Pal Singh Wadhawan, Circle-33(1), Room No.1505, 15Th E/1/7, Ii Nd Floor, Vs. Floor, Dr. Shyama Prasad East Patel Nagar, New Delhi Mukherjee Civil Centre, Pan: Aarps6904L New Delhi (Appellant) (Respondent)

For Appellant: Sh. Ajay Wadhwa, AdvFor Respondent: Sh. Vijay Verma, CIT DR
Section 142Section 143(3)Section 68

…adhawan ITA No 1155 & 1589 / Del/2013 & 1489 & 952 /Del/2013 A Y 2007-08 & 2008-09 Page 18 of 59 rejecting the books of accounts is not justified in the light of the principle laid down by the Hon'ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513. The Hon'ble Apex Court in this case have held that without rejecting the books of accounts no addition can be made towards the construction on the recommendation of the District Valuation Officer. The quantitative details were furnished by the appellant along with the return of income and was duly reflected in the trading account. Therefore, the…

M/S Vardaan Fashion, New Delhi vs. JCIT, New Delhi

In the result ground No. 3 of the appeal of the assessee is dismissed

ITA 1143/DEL/2013[2007-08]Status: DisposedITAT Delhi08 Jul 2016AY 2007-08

Bench: I.C.Sudhir & Shri Prashant Maharishivardan Fashions, Jcit, E-1/7, 2Nd Floor, East Patel Range-33, Vs. Nagar, New Delhi New Delhi Pan:Aacfv0423H (Appellant) (Respondent) Acit, Vardan Fashions, Circle-33(1) E-1/7, 2Nd Floor, East Patel Vs. New Delhi Nagar, New Delhi Pan:Aacfv0423H (Appellant) (Respondent)

For Appellant: Sh. Ajay Wadhwa, AdvFor Respondent: Sh. Vijay Verma, CIT DR
Section 142Section 40

…ndirectly enhanced the GP rate of the appellant to 34.15%. The disturbance of the GP rate without rejecting the books of accounts is not justified in the light of the principle laid down by the Hon'ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513. The Hon'ble Apex Court in this case have held that without rejecting the books of accounts no addition can be made towards the construction on the recommendation of the District Valuation Officer. The quantitative details were furnished by the appellant along with the return of income and was duly reflected in the trading account. Therefore, the…

Chhote Prasad, Asansol vs. I.T.O.-Ward-2(3), Asansol

In the result, appeal of assessee is partly allowed for statistical purposes

ITA 2390/KOL/2013[2009-2010]Status: DisposedITAT Kolkata20 May 2016AY 2009-2010

Bench: Shri N. V. Vasudevan, Jm & Shri M. Balaganesh, Am]

For Appellant: Shri Vishal Shaw, AdvocateFor Respondent: Md. Ghayas Uddin Ansari, JCIT, Sr. DR
Section 133(6)Section 143(3)Section 145(3)

…in fact by holding that provision of Section 145(3) was not required to be invoked, though the addition towards trading account has been made. This observation of Ld. CIT (A) is contrary to the Hon'ble Supreme Court decision in Sargam Talkies v / s CIT (2010) 328 ITR 513 SC and Kolkata IT AT decision in the case of ITO v / s Pranav Prakash Dutta ITR 1492/kol/2011 AY 2007-08.” 3. The first issue to be decided in this appeal is as to whether addition of Rs.1,83,088/- towards difference in balance in the account of Upline Travels Pvt. Ltd. (in short UTPL) could be made in the facts and circumstances of the case. 2…

Mount View Club & Resorts P. Ltd, Navi Mumbai vs. ITO 10(3)(4), Mumbai

In the result, the appeals filed by the assessee for assessment years 2003-04 and 2004-05 are allowed and the appeals for the assessment years 2005-06 and 2006-07 are partly allowed

ITA 1358/MUM/2011[2003-04]Status: DisposedITAT Mumbai29 Apr 2016AY 2003-04

Bench: Shri C.N. Prasad & Shri Rajesh Kumarआयकर अपील सं /I.Ta Nos.1358 To 1360 & 1362/Mum/2011 ("नधा"रण वष" / Assessment Years: 2003-04 To 2006-07 M/S. Mount View Club & The Ito-10(3)(4), बनाम/ Resorts Pvt. Ltd., Mumbai Vs. 27, Mahavir Centre, Sector-17, Vashi Navi Mumbai "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaccm 5353M (अपीलाथ" /Appellant) .. (""यथ" / Respondent) अपीलाथ" ओर से/ Appellant By: Shri Prakash Pandit Shri Asghar Zain Vp ""यथ" क" ओर से/Respondent By:

For Appellant: Shri Prakash Pandit
Section 142ASection 143(3)Section 148Section 263Section 69B

…Officer completed the assessment by accepting the books of accounts of the assessee. The Assessing Officer never rejected the books of accounts before making the reference to the Valuation Officer. The Hon’ble Supreme Court in the case of Sargam Cinema Vs CIT 328 ITR 513 has held that the Assessing Officer cannot refer the matter to the District Valuation Officer without rejecting the books of account. Similar view has taken by the Hon’ble Telangana & Anbdhra Pradesh High Court in the case of Laxmi Constructions (supra) by following the decision of the Hon’ble Supreme Court in the case of Sargam Cinema (supra). R…

ITO, New Delhi vs. Sh. Ashwani Kumar Malik, Meerut

ITA 3871/DEL/2013[2009-10]Status: DisposedITAT Delhi23 Sept 2015AY 2009-10

Bench: Shri S.V. Mehrotra & Smt. Beena Pillai

Section 143(2)Section 34ASection 55A

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH:‘A’ NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .No. 3871/Del/2013 (ASSESSMENT YEAR-2009-10) ITO, vs Ashwani Kumar Malik, Ward 1(1), 4, Vardan Street No. 4/5, New Delhi. Thapar Nagar, Meerut. AAXPM8541R & Cross Objection No. 15/Del/2014 (In ITA No. 3871/Del/2013) (ASSESSMENT YEAR-2009-10) Ashwani Kumar Malik, vs ITO, 4, Vardan Street No. 4/5, Ward 1(1), Thapar Nagar, Meerut. New Delhi. AAXPM8541R Appellant by Sh. K.K. Jaiswal, DR Respondent by Sh. Sandeep Sapra, Adv. & Sh. O.P. Sapra, Adv. Date of Hearing…

Prafulla Kumar Ghosh, Malda vs. ITO, Ward-2, Malda

In the result, the appeal of the assessee is partly allowed

ITA 686/KOL/2012[2006-07]Status: DisposedITAT Kolkata18 Sept 2015AY 2006-07

Bench: Shri Mahavir Singh, Jm & Shri M.Balaganesh, Am] Assessment Year : 2006-07 (Appellant ) (Respondent) Prafulla Kumar Ghosh -Versus- I.T.O., Ward-2, Malda Malda (Pan:Adhpg 8048 C) For The Appellant : Shri K.M.Roy, Fca For The Respondent : Shri S.S.Alam, Jcit Date Of Hearing : 10.09.2015. Date Of Pronouncement : 18.09.2015. Order Per Shri M.Balaganesh, Am 1. This Appeal Of The Assessee Arises Out Of The Order Of The Learned Cita In Appeal No. 279/Mld/Cit(A)/Jal/08-09 Dated 02.03.2012 For The Asst Year 2006-07 Arising Out Of The Order Of The Learned Assessing Officer Framed U/S 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As The ‘Act’).

For Appellant: Shri K.M.Roy, FCAFor Respondent: Shri S.S.Alam, JCIT
Section 133(6)Section 142ASection 143(3)Section 145(3)Section 69B

…ld as the same is done with cogent reasons by the learned AO and not objected by the learned AR for resorting to estimate the net profit of assessee for determining business income. The Hon’ble Apex Court in the case of Sargam Cinema vs CIT reported in (2010) 328 ITR 513 (SC) had held that reference to DVO could be made only after rejection of the books of accounts by the Learned AO. 2.6. Sec. 69B could be used even if business income is estimated as they do not come under any specific heads of income. Reliance in this regard is placed on the decision of Hon’ble Gujarat High Court in the case of Fakir Mohammed H…

C.R.Selvaraj, Salem vs. ITO, Namakkal

In the result, the appeal of the assessee in ITA

ITA 100/CHNY/2015[2011-12]Status: DisposedITAT Chennai22 May 2015AY 2011-12

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. No.100/Mds/2015 ("नधा"रण वष" / Assessment Year : 2011-2012)

For Appellant: Shri. T.S. Lakshmi Venkataraman, C.AFor Respondent: Shri. A.V. Sreekanth, IRS, JCIT
Section 143(1)

…construction needs to be deleted. c. Further reliance is placed on the order of ITAT, Lucknow bench 'A' dated 16/10/14 in the case of DCIT vs. Satish Cold Storage (36 ITR (Tribunal) 435 (Lucknow) and Sargam I.T.A.No.100/Mds/2015. :- 14 -: Cinema vs. CIT 328 ITR 513 (SC). d. In the course of proceedings before CIT(A) Salem, the assessee filed details of cost of construction as per state PWD rates according to which the cost of construction comes to ".1,48;16,071/-. e. The directions of CIT(A) to the assessing officer is to adopt the values as per the state PWD rates and not to adopt CPWD rates as taken…

CIT vs. Ambience Hotels & Resorts Ltd

Appeals are dismissed

ITA/581/2012HC Delhi05 Oct 2012

Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE R.V.EASWAR

…uld be made on account of difference in the cost of construction shown by the assessee and estimated by DVO and for raising such contention the reliance was mainly placed on the decision of Hon’ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513 (SC). Thirdly, the addition was challenged on the ground that the difference in the cost of construction and estimate made by the DVO was less than 5% (2.43% in the case of Ambience Developers Pvt. Ltd. and 3.71% in the case of Ambience Hotels and Resorts Pvt. Ltd.) To assail the addition on this basis, the assessee placed reliance on the…

CIT vs. Ambience Hotels & Resorts Ltd

Appeals are dismissed

ITA - 581 / 2012HC Delhi05 Oct 2012

…uld be made on account of difference in the cost of construction shown by the assessee and estimated by DVO and for raising such contention the reliance was mainly placed on the decision of Hon’ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513 (SC). Thirdly, the addition was challenged on the ground that the difference in the cost of construction and estimate made by the DVO was less than 5% (2.43% in the case of Ambience Developers Pvt. Ltd. and 3.71% in the case of Ambience Hotels and Resorts Pvt. Ltd.) To assail the addition on this basis, the assessee placed reliance on the…