Karnataka High Court
The Commissioner Of Income Tax vs Nemichand K Shah on 3 March, 2010
Bench: K.L.Manjunath, B.V.Nagarathna
Se EE RELIES ESLER, UGE GRO GP RN ATARA HIGH COURT OF KARNATAKA HIGH CO 8 one os BY M/S KING AND PART IN THE HIGH COURT OF KARNATAKA AT BANGALORE -- DATED THIS THE 3° DAY OF MARCH, 2010 Moa PRESENT =~ oe THE HON'BLE MR. JUSTICE KL MANIUNATH AND THE HON'BLE MRS. JusTice B) Vv. /.NAGARATHNA BETWEEN 1. THE COMMISSIONER oF FNC OME TAX, C.R. BUILDING, QUEENS ROAD, BAN GALORE- 560 OL. 2. THE DE PUTY CONMISSIONER, OF INCOME TAX, CENTRAL CIRCLE- "A(1}, C.RSUILDING, -- QUEENS ROAD, BANGALORE, |" ... APPELLANTS (BY SRI. N.V.SESHACHALA - ADV. } AND: . 'SRI NEMICHAND K. SHAH, -NO.14, TH CROSS, If BLOCK, IT STAGE, BASAVESHWARANAGAR, - BANGALORE-79 .. RESPONDENT
RIDGE- ADV.) THIS LTA FILED U/S. 260A OF THE INCOME TAX ACT, 1964 ARISING OUT OF ORDER MATEO 30.07.2004 PASSED IN ITUSS)A NG.83/Bang/2002 FOR THE @LOCK ASSESSMENT PERIOD 1989-90 TO 1998-99 UPTO 15.11.1999, PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED Ta:
i. FORMULATE THE SUBSTANTIAL QUESTION OF LAW, of WE WT TARA Mor OU E Gr RARMATARA HIGH COE Ris Mea OW ib. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE INCOME TAX APPELLATE. ~ TRIGUNAL, BANGALORE BENCH If- IT(ISSj)A a AO. €3/Sang/2002 OY.30.07,.2004 AND. CONFIRM ~~ THE ORDER PASSED 8Y THE APPELLATE COMMISSIONIER CONFIRMING. THE ORDER PASSED BY THE ®DEPUTY COMMISSIONER. OF INCOME-TAX, CIRECLE-8(1),. BANGALORE. IN THE INTEREST OF JUSTICE AND EQUITY, .
THIS INCOME TAX APPEAL COMING On FOR HEARING THIS DAY, K L MANJUNATH. dis DELIVE RED BE FOLLOWING:
UDG MENT.
The Revenue has come, up. in, this appeal challenging the legal ity, and. correctness af the order passed by the Income | Tax Appellate Tribunal, Bangalore Bench in IT(SS)A N0.83/Bang/O2 "dated 30.7.2004 raising the following substantial questions of law ;- a . p> | Whether the Tribunel was correct in Bo "fokivag thet the Assessing Officer wes _ not justified in referring the valuation af "| Basaveswaranagar building awned by the assessee fo the Valuation Offfcer since the ass * had declared ts vaiie in the course of reguler income tex return fied for the assessment years 1993-94, 1994-95 despite the discovery of evidence in search showing the value of this property as 88.38,22,0B4/- by experts among other materist; ay Pie PB
--, RRA THE WWiKE OF RARNATAKA HIGH COURT OF KARNATAKA HIGH CO eR SURE 7 Whether the Tribunal was correct in taking into consideration irrelevent. materials like, the vaksation officer not being examined no opportunity hes been. 7 granted to cross axemine 'the valuation. - officer, the material. detected showing higher value was. for. the purpose of obtaining loan and there was no rejection of books before referring the matter to the: vakzation officer and the CPWD rates adopted could: not be made applicable to the Stais of Kernatska lnstead of teking into Bes count: the relavent material es . considered hy. the assessing Officer and comsequertiy recorded perverse
2 Ainding:.
- Whether the Assessing Officer was justilied in adopting the velre estimated \_ by the Valuation Officer in respect of the " Basaveswaranagar property owned by the assessee which was confirmed by the Appellate Cammsioner in black assessment proceedings.
Z. The facte leading to this case are as hereunder -- iy Phe. fbn, ty ae ERB PRE AP PR ER Ge Pagan "Dag gg Sta? fF i allt OM Saye A search was conducted on 15.11.1999. Thereafter, a notice under Section 1SBBC af the Income Tax, Act was . . undisclosed income as 'nil'. It was noticed aig lhe course of search the valuation report dated 30.5.2005 in respect of property at Ne. 14, 34 cross, ae block, 3° stage, Basaveshwarnagar, was found end the same was seized. This valuation _Teport was issued. on" 419. 12.1994 by M/s. Harshavardhan Associates whe were 2 the architacts of the bul ding .v rc valuin g- the: property of the building at Re. 38,28. oB4)-. based 'an the same, the Assessing Officer secured the. report from. the Valuation Officer. The Valuation Officer: disclosed the cost of construction at : Re, 2 Oo 024)- » The assessee in nis return of income for BS the: peviod 1995- 95 to 95-96 haat disc losed the cost of 'construction 'at 6,44,493/-. The Assessing Officer giving "deduction to the ermount admitted by the assessee came : to the conclusion that there is unexglainec investrnent of
-_ the mouse property al Re.7,49,307/-. Aggrieved by the | gai order, the assessee fied sppeal before the Commissioner of Incere Tax (Appeals), Bangalore, which appeal came te be digmigged. Eeing aggrieved by the ee os SONAR Reta maT : we ee r Tait ATS eR UI Sa OT 'Seg AE PRA SAPs EA Te Ri Sg UN" ROR A OE Th aa Ri PA a RR Se te Et PE he RR A RE same, the assesses filed an appeal before the Income. Tex:
Appellate Tribunal, Bangalore which appeal carve to be Bs allowed on the ground that, ne incriminating dacument Was seized during the course of searcin and that the agssessee has not been heard. by. the: Asvess' ng Officer based on the report secured from him: from the approved valuation officer and on a 'echnical arourd relief nas been granted to the assesses. -- t herefore, the Revenue has come up in this appeal,
3. Having heard the counsel for the parties, we are af the view that without answering the questions of law framed, in. this appeal, the matter requires to be re- axamine od 7 by. the Assessing Officer for the following reasons. .
4. Relief has been granted to the assessee by the _ Tribune! on the technicel ground that the assessee has not a been heard by the Assessing Officer and that the valuation afficer haa net been examined. If the assessee has not heen heard in the matter by fhe Assessing Officer and if the report has not been examined in accordance with law, _/ be ag Fo ee ee ee i ee ae ee ee eh ei a it was for the Tribunal to sat agide the order of the Assessing Officer and the Commissioner of income Tax Bs fAppeals), Bangalore and remand. the matter | to "the Assessing Officer to pass an sppropri iste 'order in . accordance with jaw. Since such a 'procedure. is ot followed by the Tribunal, we are of the view that the order of the Tribunal ae well as the Commis issioner of Income Tax {Appeals}, Banga ore and the - assessi 99 Officer are required to be sat aside 4) recting the Assessing Officer to reconsiger the matter afresh int accordance with law With the above said ouservations, the appeal is disposed of --
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J UDOE Sd/-
JUDGE