Income Tax Appellate Tribunal - Mumbai
Gurdassingh & Sons, Thane vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "G": MUMBAI
BEFORE SHRI D.MANMOHAN, HON'BLE VICE PRESIDENT
AND
SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER
ITA No.1314/Mum/2009
(Assessment year 2006-07)
DCIT Central Circle 1, M/s Gurdassingh & Sons,
Pawar Indl Estate, vs Golden House, C-792, Section 17,
Edulji Road, Charai, Tekdi Area, Ulhasnagar -3
Thane - 400 601 PAN AAAAG 5347 D
(Appellant) (Respondent)
For Appellant : Mr Mohd Usman
For Respondent : Ms Geeta J Guwalani
ORDER
PER D.MANMOHAN, V.P.
1. Addition of Rs 85,88,860/- made by the Assessing Officer u/s 69 of the Act having been deleted by the Learned CIT (A), Revenue is in appeal before us.
2. We have heard the Learned Departmental Representative as well as Learned Counsel and also perused the record. Facts necessary for the disposal of the appeal are stated in brief. Search and seizure operation was carried out in the premises of Panjwani Group of Ulhasnagar on 23.02.2006 wherein it was noticed that Gurdassingh & Sons, AOP, had constructed a residential house, known as 'Golden House', at Ulhasnagar. Case of the assessee was that the said house was constructed during the period 1994-1996 by the family members of Shri Gurdassingh Panjwani, on co-ownership basis. Assessing Officer, however, was of the view that part of this six storeyed residential house was constructed in the previous year relevant to the assessment year 2006-07 and investment made on such construction was not disclosed by the assessee, which deserves to be added u/s 69 of the Act in the year 2 ITA 1314/M/2009 M/s Gurdassingh & Sons under consideration. Despite a detailed explanation in this regard, the Assessing Officer added the impugned sum u/s 69 of the Act.
3. On an appeal filed by the assessee, Learned CIT (A) considered the issue in great detail to conclude that no case was made out, in the absence of any documentary evidence, to make an addition of Rs 85,88,600/- in assessment year 2006-07. Operative portion of the order of the Learned CIT (A) is reproduced for immediate reference:
"5.1 Ground of appeal No 1, 2 & 3 The most important issue to be decided in this case is whether all the six floors of 'Golden House' were constructed during the period 1994-1996 or 4th, 5th & 6th floors were added to the house during the FY relevant for assessment year 2006-07. The appellant's contention is that all the six floors of 'Golden House' were constructed during the period 1994-1996. The Assessing Officer's contention, on the contrary, is that 4th, 5th & 6th floors were constructed in the FY relevant for assessment year 06-07 and as such he has taken the investment made in the construction of 4th, 5th & 6th floors at Rs 85,88,660/-, as concealed income of the appellant for assessment year 06-07.
5.1.1 From the perusal of the documents filed by the appellant, I find that the 'Golden House' was constructed at Room No 3 to 5 of Block No 792, Hill Area, Ulhasnagar. The building was constructed in clear violation of the approved plant and the Ulhasnagar Municipal Corporation (UMC) had pointed out this violation at several occasions to the appellant. The UMC had approved the plant of the 'Golden House' vide its letter dated 18/04/95 but the 'Golden House' was not constructed as per the approved plan. The municipal Authorities had categorized the 'Golden House' was not constructed as per the approved plan. The Municipal Authorities had categorized the 'Golden House' as as 'unauthorized construction' and had filed its details before the Hon'ble Bombay High Court in reply to a Public Interest Litigation (PIL) pending before it. On 15/09/95, UMC had issued six notices to the six owners of the 'Golden House' as this was considered to be 'unauthorized construction'. The Beat Inspectors of UMC had inspected the construction of 'Golden House' and had submitted their reports on various dates in the year 1994-1996. I have perused copy of these reports dated 21/08/1995, 24/06/1996 and 16/08/1996 submitted by the Beat Inspectors. In these reports, the Beat Inspectors had clearly mentioned that the construction of the 'Golden House' having ground plus six floors was under
progress. In reports dated 24/06/1996 and 16/08/1996, the Beat Inspectors had clearly mentioned that "RCC construction for ground 3 ITA 1314/M/2009 M/s Gurdassingh & Sons plus six floors were completed and the internal work was in progress." Further, the lift was installed in the 'Golden House' by M/s Excelisor Motor & Electric Mechanic Works, Mumbai. The installation of the lift was completed on 23/10/1996. I have perused the papers / correspondence in respect of the installation of the lift in 'Golden House'. These documents clearly establish that the lift was installed just after the completion of the 'Golden House' in the year 1996. The Assessing Officer had collected information from UMC and also from M/s Excelsior Motor & Electric Mechanic Works, Mumbai. The reply of UMC vide its letter dated 14/12/2007 and reply of M/s Excelsior Motor & Electric Mechanic Works vide letter dated 13/12/2007 clearly reveal that the 'Golden House' was constructed in the year 1994-1996. These documents proved beyond doubt that the construction of ground plus six floors of the 'Golden House' was completed by the year 1996. On direction of the Hon'ble Bombay High Court, the UMC had filed an FIR on 14/09/2007 with the Police against the co-owners of the 'Golden House' for offences committed u/s 52 & 53 of Maharashtra Regional Town Planning Act, 1966. The contents of the FIR also reveal that the ground plus six floors of 'Golden House' were constructed in 1996.
5.1.2 The Assessing Officer had referred the 'Golden House' for valuation to the Departmental Valuer. The valuation report dated 16/10/06 was submitted to the Assessing Officer. The Assessing Officer had issued only the portion dealing with the valuation of the building to the appellant. The complete valuation report was not handed over to the appellant during the assessment proceedings.
As per the valuation report, the construction of the 'Golden House' was completed before 01/04/1999. The valuer has computed the investment in the house upto 01/04/1999 only on the basis of documentary evidences. The Assessing Officer has taken the indexed cost of investment for FY 2005-06.
5.1.3 The Assessing Officer has taken the year of construction of 4th, 5th & 6th floors as FY 2005-06 only on the basis of information collected from Dy Executive Engineer, MSEB in respect of installation of electric meter for 4th to 6th floors. The Dy Executive Engineer, MSEB informed the Assessing Officer that the electric meters for 4th and 5th floors were installed in the year 2005-06. Only this information is not sufficient to conclude that the 4th, 5th & 6th floors were constructed during the previous year relevant to assessment year 2006-07. No other corroborative evidences have been brought on record by the Assessing Officer. On the contrary, all other documentary evidences go to confirm that the construction of 4th, 5th & 6th floors of the 'Golden House' was completed during the period 1994-96.
4 ITA 1314/M/2009 M/s Gurdassingh & Sons 5.1.4 In view of the facts discussed above, I am of the view that the Assessing Officer's action of taking the period of construction of 4th, 5th & 6th floors as financial year 2005-06 relevant to assessment year 2006-07 is not supported by any documentary evidences. The addition of Rs 85,88,600/- made in the hands of the appellant in assessment year 2006-07 is legally not maintainable. The addition of Rs 85,88,600/- is, therefore, deleted. The grounds of appeal taken by the appellant are allowed."
4. Learned Departmental Representative laboured hard to support the stand of the Assessing Officer whereas the Learned Counsel appearing on behalf of the assessee supported the conclusions reached by Learned CIT (A) by referring to several pages in the paper book which lend support to the contention of the assessee that construction had not taken place during the previous year relevant to assessment year 2006-07 and hence addition made by the Assessing Officer u/s 69 of the Act in this year has not legs to stand.
5. In our considered opinion, the order passed by the Learned CIT (A) does not call for any interference. No material whatsoever was placed before us by Learned Departmental Representative to contradict the findings of the Learned CIT (A). Under these circumstances, we uphold the order of the Learned CIT (A) and dismiss the appeal filed by the revenue.
Order pronounced in the open Court on 04-06-2010.
Sd/- Sd/-
(RAJENDRA SINGH) (D.MANMOHAN)
ACCOUNTANT MEMBER VICE PRESIDENT
Mumbai, Date 4th June, 2010.
Copy to
1. The appellant.
2. The respondent.
3. The CIT (A)-I, Thane.
4. The CIT (Central), Thane.
5. DR 'G' Bench
6. Guard File.
*Chavan
By Order
/ / True Copy / /
Asst. Registrar, ITAT, Mumbai Benches MUMBAI 5 ITA 1314/M/2009 M/s Gurdassingh & Sons SNo Date Initials 1 Draft dictated on 1-06-2010 Sr.P.S.
2. Draft Placed before author 1-06-2010 Sr.P.S.
3. Draft proposed & placed before the Second Member A.M.
4. Draft discussed/approved by Second Member A.M
5. Approved Draft comes to the Sr.PS/PS Sr.P.S.
6. Kept for pronouncement on Sr.P.S.
7. File sent to the Bench Clerk Sr.P.S.
8. Date on which file goes to the Head Clerk
9. Date of Dispatch of Order