Gujarat High Court
Commissioner Of Income Tax-Ii vs Vijaykumar D Gupta....Opponent(S) on 15 April, 2014
Author: Akil Kureshi
Bench: Akil Kureshi, Sonia Gokani
O/TAXAP/296/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 296 of 2014
With
TAX APPEAL NO. 297 of 2014
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COMMISSIONER OF INCOME TAX-II....Appellant(s)
Versus
VIJAYKUMAR D GUPTA....Opponent(s)
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Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1
MR B S SOPARKAR, ADVOCATE for the Opponent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MS JUSTICE SONIA GOKANI
Date : 15/04/2014
COMMON ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Revenue has filed these two appeals challenging the judgment of the Income Tax Appellate Tribunal dated 23.08.2013. The issue pertains to the assessment year 200809. In the assessment order, the Assessing Officer had added a sum of Rs.3,34,271/ under section 69B of the Incometax Act, 1961, by way of unexplained investment in house property relying on the DVO's report.
2. The CIT (Appeals) retained part of the additions, Page 1 of 5 O/TAXAP/296/2014 ORDER but gave partial relief to the assessee. This order of CIT (Appeals) gave rise to two crossappeals, one by the assessee and another by the Revenue. The Tribunal allowed the assessee's appeal and rejected the Revenue's. Hence, two appeals pertaining to the same question.
3. In a similar situation, concerning the same assessee, separate orders are passed in Tax Appeal Nos.293/2014 and 294/2014, dismissing the appeals making following observations:
"5. It is undisputed that the Assessing Officer made a reference to the DVO without rejecting the books of accounts. While retaining part of the additions even the CIT (Appeals) did not come to the conclusion that the Assessing Officer had rejected the books of accounts of the assessee. It was in this background that the Tribunal relied on the decision of the Supreme Court in the case of Sargam Cinema v. Commissioner of Incometax, reported in (2010) 328 ITR 513 (SC). This Court in the case of Goodluck Automobiles Pvt. Ltd. v. Assistant Commissioner of Incometax, reported in 359 ITR 306, in the context of this issue referring to the decision of the Supreme Page 2 of 5 O/TAXAP/296/2014 ORDER Court in the case of Sargam Cinema (supra) had observed as under :
12. The facts of the present case may be examined in the light of the statutory scheme discussed hereinabove as well as the decision of the Supreme Court in Sargam Cinema (supra). In this regard, a perusal of the assessment order reveals that the Assessing Officer has categorically recorded a finding to the effect that the accounts are duly audited and complete details are available. From the tenor of the order of the Assessing Officer, it is apparent that he has made the reference to the Valuation Officer merely to seek expert advice regarding the cost of construction. There is nothing in the assessment order to suggest that the Assessing Officer had any doubt regarding the cost of construction or that he was not satisfied regarding the correctness or completeness of the books of account. Before making the reference to the Valuation Officer for ascertaining the fair price of construction, the Assessing Officer does not appear to have ascertained the correctness or otherwise of the cost of construction shown by the assessee in its books of account. Thus, prior to making the reference to the Valuation Officer, the Assessing Officer has not ascertained as to what was the defect in the cost of construction disclosed by the assessee in its returns of income. Moreover, it is apparent that the only reason for making the addition under section 69 of the Act is that there is a difference in the cost of construction as determined by the Valuation Officer and as shown by the assessee. At no stage of the assessment proceedings does the Assessing Officer appear to have mentioned that the books of account are defective or that the cost of construction as shown in the books of account is not the true cost of Page 3 of 5 O/TAXAP/296/2014 ORDER construction. Thus, while making the reference to the Valuation Officer, the Assessing Officer has not recorded any defect in the books of account nor has he rejected the same. Except for the difference in the estimated cost determined by the Valuation Officer and the actual cost as shown by the assessee, the Assessing Officer has not brought any material on record to establish that the assessee had made any unaccounted investment in the construction of the building in question and that the books of account do not reflect the correct cost of construction. Under the circumstances, there was no occasion for the Assessing Officer to make a reference to the Valuation Officer. As held by the Supreme Court in the case of Sargam Cinema (supra), unless the books of accounts are rejected, the Assessing Officer cannot make a reference to the Valuation Officer. The reference made to the Valuation Officer, not being in consonance with the provisions of law, was, therefore, invalid. Accordingly, the report made by the Valuation Officer pursuant to such an invalid reference could not have been made the basis for addition under section 69 of the Act.
6. We are informed that the decision of this Court in the case of Goodluck Automobiles (supra) was followed by the Punjab and Haryana High Court in the case of Nirpal Singh v. Commissioner of Incometax, reported in 359 ITR 398. We may notice that Allahabad High Court in the case of Commissioner of Incometax v. Lucknow Public Educational Society, reported in (2011) 339 ITR 588, had also taken a similar view.Page 4 of 5
O/TAXAP/296/2014 ORDER
7. We are not oblivious of the fact that the Andhra Pradesh High Court in the case of Simandhar Corporation Pvt. Ltd. v. CIT, reported in (2013) 33 taxmann.com 643, had taken a contrary view. However, following the decision of this Court in the case of Goodluck Automobiles (supra), we do not interfere in the findings arrived at by both the authorities. No substantial question of law arises."
4. These Tax Appeals are, resultantly, dismissed.
(AKIL KURESHI, J.) (MS SONIA GOKANI, J.) Gaurav+ Page 5 of 5