The ACIT, Central Circle-1,, Surat v. Shri Pragnesh D.Thesia, Surat

ITA 1079/AHD/2007 | 2002-2003
Pronouncement Date: 31-05-2010 | Result: Dismissed

Appeal Details

RSA Number 107920514 RSA 2007
Assessee PAN AAOPT2583M
Bench Ahmedabad
Appeal Number ITA 1079/AHD/2007
Duration Of Justice 3 year(s) 2 month(s) 17 day(s)
Appellant The ACIT, Central Circle-1,, Surat
Respondent Shri Pragnesh D.Thesia, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-05-2010
Date Of Final Hearing 12-05-2010
Next Hearing Date 12-05-2010
Assessment Year 2002-2003
Appeal Filed On 13-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL SHRAWAT JUDICIAL MEMBER AND SHRI D.C. AGRAWAL ACCOUNTANT MEMBER DATE OF HEARING : 12/05/2010 DRAFTED ON: 13 /05/2010 APPEAL(S) BY SL. NO(S). ITA NO(S) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 1079/AHD/2007 2002-03 THE ASSTT.CIT CEN.CIR-1 SURAT SHRI PRAGNESH D.THESIA GAUTAM PARK MATAWADI 4 RASTA L.H.ROAD SURAT PAN:AAOPT2583 M 2. 1080/AHD/2007 2002-03 REVENUE SHRI HARESH D.THESIA GAUTAM PARK MATAWADI 4 RASTA L.H.ROAD SURAT PAN:AAHPT8095 M ASSESSEE(S) BY: SHRI M.G. PATEL REVENUE BY : SL.NO.1 . SHRI SHELLEY JINDAL CIT-DR SL.NO.2 . SHRI M.C. PANDIT SR.DR O R D E R PER SHRI MUKUL SHRAWAT JUDICIAL MEMBER : THESE TWO APPEALS HAVE BEEN FILED BY THE RE VENUE OF TWO DIFFERENT ASSESSEES WHICH HAVE EMANATED FROM THE RESPECTIVE O RDERS OF THE LEARNEDCIT(APPEALS)-II AHMEDABAD BOTH IDENTICALLY DATED 15/01/2007. SINCE THE ADMITTED POSITION IS THAT THE FACTS PERTA INING TO THE IMPUGNED ADDITION ARE IDENTICAL IN THESE TWO APPEALS THEREF ORE FOR THE SAKE OF ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 2 - CONVENIENCE THESE APPEALS ARE CONSOLIDATED AND HER EBY DECIDED BY THIS COMMON ORDER. IT HAS ALSO BEEN NOTICED THAT THE QUA NTUM ADDITION ALSO HAD THE IDENTICAL FIGURES AS APPEARING IN THE GROUNDS O F APPEAL OF THE REVENUE REPRODUCED BELOW:- THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIREC TING TO DELETE THE ADDITION OF RS.41 39 897/- MADE ON ACCOUNT OF D IFFERENCE IN VALUE (50% OF RS.82 79 795/-) BY THE ASSESSING OFFI CER ON ACCOUNT OF INVESTMENT MADE IN CONSTRUCTION OF BUNGALOW AT P RABHU DARSHAN SOCIETY DHANELI NAGAR VARACHHA ROAD SURA T. 2. FACTS IN BRIEF; AS EMERGED FROM THE CORRESPONDIN G ASSESSMENT ORDERS WHICH ARE IDENTICALLY DATED I.E. 28/03/2006 ; WERE THAT BOTH THESE ASSESSEES WERE SUBJECTED TO SEARCH U/S.132 OF THE I .T. ACT 1961 WHICH WAS CARRIED OUT ON 10/12/2003. DURING THE COURSE OF SEARCH A VALUATION REPORT IN RESPECT OF BUNGALOW SITUATED AT PRABHU DA RSHAN SOCIETY LAMBE HANUMAN ROAD SURAT WAS FOUND. AN ENQUIRY WA S RAISED AND IT WAS FOUND THAT THE ASSESSEE HAS PURCHASED THE PROPE RTY JOINTLY WITH OTHERS. AN APPROVED VALUER HAS VALUED THE PROPER TY FOR A SUM OF RS.1 091 80 000/- AS ON 20/08/2001. THE BASIC OBJE CTION OF THE ASSESSING OFFICER WAS THAT AS PER THE BOOKS THE CO ST OF CONSTRUCTION WAS AT A MUCH LOWER FIGURE THEREFORE THE DIFFERENCE W AS TO BE TAXED IN THE HANDS OF THE ASSESSEE. IN THIS REGARD TO STREAML INE THE PRELIMINARY FACTS IT IS WORTH TO REPRODUCE THE EXPLANATION OFFERED B Y THE ASSESSEE BEFORE THE ASSESSING OFFICER. ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 3 - THE ASSESSEE ALONG WITH HIS MOTHER SMT. SAVITABEN D. THESIA AND BROTHER SHRI HARESH D.THESIA HAD PURCHASED THE OPEN LAND AT REVENUE SURVEY NO.46/A/2 PAIKEE TP SCHEME NO.4 FIN AL PLOT NO.250 CITY SURVEY SEAT NO.239 PANA NO.8 NODH NO.1 748 PLOT NO.2 OF PRABHU DARSHAN DHAMELIA NAGAR SOCIETY LAM BE HANUMAN ROAD SURAT FROM SHRI HARMANBHAI BHIKABHAI PARMAR OF HANS SOCIETY VARACHHA ROAD SURAT ON 26.09.1994 FOR RS.4 00 000/-. OUT OF PURCHASE CONSIDERATION OF RS .4 00 000/- RS.3 00 000/- WERE PAID BY ACCOUNT PAYEE CHEQUE NO. 092971 DRAWN ON DENA BANK RAMPURA BRANCH SURAT. AS PER THE TERM REMAINING RS.1 00 000/- WILL BE PAID AT THE TIME OF REGISTRATION OF SALE DEED. AND THROUGH POSSESSION DEED I.E. KABJ A RASHID DATED 07.05.1995 THEY HAVE TAKEN THE POSSESSION OF SAID PLOT. FOR YOUR READY REFERENCE AND RECORD PURPOSE WE ARE ENCL OSING PHOTOSTAT COPY OF KABJA RASHID. THE SALE DOCUMENT WAS EXECUTED ON 14.05.2001 BEFORE SUB-REGISTRAR SURAT-3. AS AG REED AT THE TIME OF TAKING THE POSSESSION OF PLOT IN THE YEAR 1 994-95 THEY HAD PAID REMAINING RS.1 00 000/- TO SAID SHRI HARMANBHA I BHIKABHAI PARMAR BY ACCOUNT PAYEE CHEQUE DRAWN ON DENA BANK RAMPURA BRANCH SURAT. SUBSEQUENTLY CONSTRUCTION ON SAID P LOT WAS COMMENCED BY THEM. CONSTRUCTION WAS COMPLETED IN THE YEAR 1997 BY INCURRING TOTAL COST OF RS.19 00 205/-. TH E COST OF CONSTRUCTION WAS SHARED BY THEM AS UNDER: SMT. SAVITABEN DHIRUBHAI THESIA RS.7 51 250/- SHRI HARESH DIRUBHAI THESIA RS.6 06 610/- SHRI PRAGNESH DHIRUBHAI THESIA RS.5 42 345/- DULY REFLECTED IN THEIR RESPECTIVE BALANCE-SHEET. THE ASSESSEE HAS APPROACHED SHRI ARVIND C.ZAVERI GOVT.APPROVED VALUER ON 24.06.1999 FOR OBTAINING VA LUATION REPORT FOR COST OF CONSTRUCTION. ACCORDINGLY VALU ATION REPORT DTD. 07.07.1999 WAS ISSUED BY THE SAID ARVIND C.ZAVERI. THE SAID REPORT IS ALSO SEIZED DURING THE COURSE OF SEARCH O N 10.12.2003 AS ANNEXURE A-38 [PAGE NO.13 TO 23]. FOR YOUR READY REFERENCE WE ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 4 - ARE FURNISHING PHOTOSTAT COPY OF SAID VALUATION REP ORT ALONGWITH THIS LETTER. ON 18.08.2001 ASSESSEE APPROACHED SHRI SHIRISH K.KA NIA GOVT. APPROVED VALUER FOR FRESH VALUATION REPORT FOR BAN K LOAN PURPOSE. SIR THE FACT WAS ALSO MENTIONED AT THE VALUATION REPORT THAT REPORT IS FOR BANK LOAN PURPOSE ONLY. THE V ALUE SHOWN BY THE APPROVED VALUER IN THE REPORT DATED 20.08.2001 WAS ONLY FOR THE PURPOSE OF BANK LOAN. THE VALUE ARRIVED BY T HE GOVERNMENT. APPROVED VALUER IS FARE MARKET VALUE OF THE PROPERTY AS ON 18.08.2001. THE VALUE ARRIVED AT RS.1 01 80 000/- BY GOVT.APPRO VED VALUER IN HIS VALUATION REPORT DATED 20.08.2001 INCLUDES LAND VALUE OF RS.50 55 000/- AND CONSTRUCTION COST OF RS.51 25 00 0/-. SINCE THE LAND WAS PURCHASED IN THE YEAR 1994-95 FOR RS.4 00 000/-. THE DATE OF PURCHASE OF LAND IS OUTSIDE PREVIEW OF BLOC K PERIOD. THE CONSTRUCTION OF THE BUNGLOW WAS CARRIED OUT BY THE ASSESSEE AND OTHERS THEMSELVES. AND THE CONST4RUCTI9ON WORK WAS COMPLETED IN THE YEAR 1997. 2.1. THE ASSESSING OFFICER WAS NOT CONVINCED AND PL ACING RELIANCE ON THE SAID VALUATION REPORT HE HAS ARRIVED AT THE CON CLUSION THAT THE ASSESSEE HAD MADE CERTAIN EXTRA INVESTMENT TOWARDS THE PURCHASE OF LAND AS WELL AS TOWARDS THE CONSTRUCTION OF BUNGALOW. A N AMOUNT OF RS.41 39 897/- WAS COMPUTED AS AN INVESTMENT TOWARD S CONSTRUCTION OF BUNGALOW AS PER THE FOLLOWING OBSERVATIONS:- 3.6. THE ASSESSEE HAS CONSTRUCTED THE BUNGLOW ALON GWITH HIS MOTHER SMT.SAVITABEN DHIRUBHAI THESIA AND HIS BROT HER SHRI HARESH DHIRUBHAI THESIA. THE TOTAL INVESTMENT IN T HE THREE HANDS IS SHOWN TO THE EXTENT OF RS.19 00 205/- I.E. RS.7 51 250/- IN THE ACCOUNT OF SMT.SAVITABEN D.THESIA RS.6 06 610/- IN THE ACCOUNT OF ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 5 - SHRI HARESH D. THESIA AND RS.5 42 345/- IN THE ACC OUNT OF SHRI PRAGNESH D.THESIA. SMT. SAVITABEN D.THESIA IS A HO USEWIFE AND SHE DOES NOT HAVE THE INDEPENDENT SOURCES OF INCOME . THE EXTRA INVESTMENT MADE IN THE PURCHASE OF LAND AND CONSTRU CTION OF BUNGLOW IS THEREFORE TAXED IN THE HANDS OF TWO BRO THERS EQUALLY. THE VALUATION OF THE PROPERTY HAS BEEN DONE AT RS.1 01 80 000/- AGAINST WHICH THE ASSESSEE HAS ACTUALLY SHOWN THE C OST TO THE EXTENT OF RS.19 00 205/-. HENCE THE ASSESSEE HAS P AID FOR PURCHASE OF LAND AND INVESTED IN THE CONSTRUCTION OF THE BUN GLOW TO THE EXTENT OF RS.82 79 795/- (10180000 1900205) WHICH HAS NOT BEEN SHOWN IN THE BOOKS OF ACCOUNT. 50% OF THE SAME I.E . RS.41 39 897/- IS TAXED IN THE HANDS OF THE ASSESSE E AND EQUAL AMOUNT IS TAXED IN THE HAND OF HIS BROTHER SHRI HAR ESH D.THESIA WHO IS THE JOINT OWNER OF THE PROPERTY. PENALTY PR OCEEDINGS U/S.271(1)(C) OF THE I.T. ACT 1961 1961 ARE INITI ATED ON THIS POINT. 2.2. THE MATTER WAS CARRIED BEFORE THE FIRST APPELL ATE AUTHORITY. 3. THE LEARNED CIT(APPEALS) HAS EXAMINED THE FACTS AS WELL AS THE LEGAL ASPECT OF THE ISSUE AND THEREUPON ARRIVED AT THE CONCLUSION THAT EVEN CONSEQUENCE UPON THE SEARCH CARRIED OUT U/S.132 OF THE I.T. ACT 1961 NO INCRIMINATING MATERIAL WAS DISCOVERED BY THE REVENU E DEPARTMENT TO SHOW THAT THE APPELLANT HAD ACTUALLY INCURRED EXTRA EXPENDITURE TOWARDS CONSTRUCTION OF THE SAID BUNGALOW. MERELY A VALUA TION REPORT WHICH WAS CLAIMED TO HAVE BEEN OBTAINED FOR THE PURPOSE O F AVAILING BANK LOAN; SHOULD NOT BE MADE THE BASIS FOR THE ADDITION. TH E LEARNED CIT(APPEALS) ALSO REFERRED TO A DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SMT. AMIYA BALA PAUL VS. CIT REPORTED AS 26 2 ITR 407 (SC) FOR THE PROPOSITION THAT THE ASSESSING OFFICER CANNOT B E HELD JUSTIFIED IN ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 6 - OBTAINING VALUATION REPORT FOR DETERMINING THE COST OF CONSTRUCTION AND MAKING ADDITION ON THAT BASIS. THE LEARNED CIT(APP EALS) HAS ALSO ASSIGNED ONE MORE REASON THAT EXCEPT THE SAID VALUA TION REPORT NO OTHER MATERIAL WHATSOEVER WAS FOUND DURING THE COURSE O F SEARCH ACTION THROUGH WHICH IT COULD BE ESTABLISHED THAT THERE WA S UNEXPLAINED INVESTMENT MADE IN THE SAID PROPERTY. HE HAS ALSO MENTIONED THAT THERE WAS AN ANOTHER VALUATION REPORT OF THE YEAR 1999 WH ICH HAS SUPPORTED THE COST OF CONSTRUCTION AS DISCLOSED IN THE BOOKS OF ACCOUNT BY THE ASSESSEE. CONSIDERING ALL THOSE ASPECTS THE ADDIT ION WAS DELETED. NOW THE REVENUE DEPARTMENT IS IN APPEAL. 4. WITH THIS BRIEF FACTUAL BACKGROUND WE HAVE HE ARD BOTH THE SIDES. WE HAVE ALSO CAREFULLY PERUSED THE ORDERS OF THE AUTHO RITIES BELOW IN THE LIGHT OF THE COMPILATION FILED AND SUBMISSIONS MADE. THE FIRST AND FOREMOST ISSUE WHICH WAS VEHEMENTLY RAISED BY THE LEARNED AU THORISED REPRESENTATIVE OF THE ASSESSEE MR. M.G. PATEL IS TH AT THE ENTIRE EXERCISE OF ASSESSING THE UNEXPLAINED INVESTMENT IN THE HAND S OF CO-OWNERS FOR ASSESSMENT YEAR 2002-03 WAS FUTILE AND NOT AS PER L AW. HE HAS CATEGORICALLY STATED THAT THE CONSTRUCTION OF THE P ROPERTY WAS COMPLETED IN THE MONTH OF DECEMBER-1997. IN SUPPORT OF THIS CONTENTION HE HAS PLACED ON RECORD A NOTICE OF MUNICIPAL TAX DEPARTME NT ISSUED BY SURAT MUNICIPAL CORPORATION RELEVANT FOR THE YEAR 01/04/1 997 TO 31/03/1998 THROUGH WHICH HE HAS TRIED TO DEMONSTRATE THAT IN T HE FINANCIAL YEAR 1997-98 THE SAID PROPERTY WAS DULY OCCUPIED BY THE CO-OWNERS. THIS FACT WAS STATED TO BE BROUGHT ON RECORD THROUGH A W RITTEN SUBMISSION ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 7 - BEFORE THE REVENUE AUTHORITIES PLACED AT PAGE NO.5 7 OF COMPILATION; RELEVANT PORTION REPRODUCED BELOW:- THE CONSTRUCTION ACTIVITY WAS ON THE SAID PLOT WAS COMMENCE BY THE JOINT OWNERS IN THE YEAR 1995 AND COMPLETED IN THE YEAR 1997 BY INCURRING TOTAL COST OF RS.19 00 025/-. THE COS T OF CONSTRUCTION WAS SHARED BY THE JOINT OWNER AS UNDER: SR.NO. NAME OF THE OWNER CONTRIBUTION TOWARDS COST OF CONSTRUCTION 01 SMT. SAVITABEN DHIRUBHAI THESIA RS.7 51 250/- 2. SHRI HARESH DHIRUBHAI THESIA RS.6 06 610/- 3. SHRI PRAGNESH DHIRUBHAI THESIA RS.5 42 345/- DULY REFLECTED IN THEIR RESPECTIVE BALANCE-SHEET. FOR YOUR READY REFERENCE AND VERIFICATION PURPOSE W E ARE FURNISHING PHOTOSTAT COPIES OF BILLS INVOICE ETC. OF PURCHASE OF BUILDING MATERIALS USED IN CONSTRUCTION OF BUNGALOW . THE FIRST PURCHASE WAS MADE ON 16.01.1995 AND LAST PAYMENT FO R THE PURCHASE TOWARDS BUILDING MATERIAL WAS MADE ON 16.1 2.1997. THE DULY CONSTRUCTED BUNGALOW WAS READY IN THE MONT H OF DECEMBER-1997. THE JOINT OWNER OF THE PROPERTY APPROACHED SHRI ARV INDBHAI C.ZAVERI GOVT.APPROVED VALUER ON 24.06.1999 FOR OB TAINING VALUATION REPORT FOR COST OF CONSTRUCTION. ACCORDI NGLY VALUATION REPORT DATED 07.07.1999 WAS ISSUED BY THE SAID ARVI DNBHAI C.ZAVERI. THE SAID REPORT IS ALSO SEIZED DURING TH E COURSE OF SEARCH ON 10.12.2003 AS ANNEXURE-A38 (PAGE NO.13 TO 23). FOR YOUR READY REFERENCE WE ARE FURNISHING PHOTOSTAT CO PY OF SAID VALUATION REPORT ALONGWITH THIS LETTER. IN THE VA LUATION REPORT GOVT.APPROVED VALUER AT PAGE-8 STATED THAT HE HAS P ERSONALLY ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 8 - INSPECTED THE PROPERTY ON 24.06.1999. THE ASSESSI NG OFFICER AT PARA 3.4 OF PAGE-4 STATED THAT THE PROPERTY HAS ACT UALLY PURCHASED ON 14.05.2001 IS NOT CORRECT. WE ALSO FURNISHING COPY OF SURAT MUNICPAL CORPORATION SURATS VERA BILL FOR THE FIN ANCIAL YEAR 1997-98 WERE IT IS CLEARLY MENTIONED THAT THE PROPE RTY IS IN THE POSSESSION OF SMT.SAVITABEN DHIRUBHAI THESIA & SHR4 I HARESHKUMAR & OTHERS. THE ASSESSING OFFICER AT HIS OWN ARRIVED AT THE CON CLUSION THAT THE LAND WAS ACTUALLY PURCHASED ON 14.05.2001 AND MENTI ONED THAT ON MONEY PAYMENTS ARE BEING MADE IN THE PURCHASE OF LA ND WHICH IS NOT CORRECT. HE HAS ARRIVED THE CONCLUSION AT HIS OWN WITHOUT BRINGING ANY MATERIAL FACTS ON THE RECORDS. SUBSEQUENTLY FOR OBTAINING BANK LOAN/FACILITY FOR M /S.P.ASHISH BROTHERS (THE FIRM IN WHICH THE APPELLANT IS PARTNE R) APPROACHED SHRI SHIRISH K.KANIA GOVT. APPROVED VALUER FOR FRE SH VALUATION REPORT OF THE PROPERTY. VIDE HIS REPORT DATED 20. 08.2001 ARRIVED THE MARKET VALUE OF THE PROPERTY AT RS.1 01 80 000/ -. IN HIS VALUATION REPORT HE IS CLEARLY MENTIONED THAT THE P URPOSE OF VALUATION REPORT IS FOR BANK PURPOSE ONLY. THE ASS ESSING OFFICER CONTENTION THAT THE ASSESSEE HAD NOT TAKEN ANY BANK LOAN ON SAID PROPERTY IS NOT CORRECT. M/S.P.ASHISH BROTHERS WA S ENJOYING VARIOUS EXPORT BANK FACILITIES FROM DENA BANK. TH E REPORT WAAS TAKEN TO OFFER THE SAME AS A COLLATERAL SECURITY AG AINST ENHANCEMENT OF THE BANK FACILITY. NO ANY OTHER DOCUMENT AND LOOSE SHEET WAS FOUND DUR ING THE COURSE OF SEARCH WHICH COULD SHOW THAT APPELLANT HA D MADE MORE INVESTMENT THAN DECLARED IN SALES DEED. SINCE THE LAND WAS PURCHASED IN THE YEAR 1995 AND CONSTRUCTION THEREON WAS COMPLETED IN THE YEAR 1997 WHICH IS OUTSIDE THE PRE VIEW OF THE BLOCK PERIOD. ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 9 - 4.1. IT WAS ALSO EXPLAINED THAT THE CO-OWNERS HAVE PURCHASED THE SAID PLOT ON 26.09.1994 FOR A CONSIDERATION OF RS.4 LACS . HOWEVER AT THAT TIME ONLY RS.3 LACS WAS PAID THROUGH 'A/C PAYEE CHE QUE' AND THE REMAINING AMOUNT OF RS.1 LAC WAS PAID AT THE TIME O F REGISTRATION OF THE SALE-DEED. THERE WAS A POSSESSION DEED DATED 07/ 05/1995 THROUGH WHICH THE POSSESSION WAS TAKEN OVER BY THE CO-OWNER S OF THE SAID PLOT. HOWEVER THE SALE DEED WAS EXECUTED ON 14/05/2001 B EFORE THE SUB- REGISTRAR SURAT BUT FOR ALL INTENTIONS AND PURPOS ES THE PROPERTY WAS IN POSSESSION AS WELL AS TRANSFERRED TO THE ASSESSEE AND HIS FAMILY MEMBERS. IN THIS REGARD A WRITTEN SUBMISSION WAS MADE BEFOR E THE ASSESSING OFFICER PLACED IN THE COMPILATION; RELEVANT PORTION REPRODUCED BELOW:- THE ASSESSEE ALONGWITH HIS MOTHER SMT. SAVITABEN D .THESIA AND BROTHER SHRI HAREH D.THESIA HAD PURCHASED THE OPEN LAND AT REVENUE SURVEY NO.46/A/2 PALKEE TP SCHEME NO.4 FIN AL PLOT NO.250 CITY SURVEY SEAT NO.239 PANA NO.8 NODH NO.1 748 PLOT NO.2 OF PRABHU DARSHAN DHAMELIA NAGAR SCOEITY LAM BE HANUMAN ROAD SURAT FROM SHRI HARMANBHAI BHIKABHAI PARMAR OF HANS SOCIETY VARACHHA ROAD SURAT ON 26.09.1994 FOR RS.4 00 0000/-. OUT OF PURCHASE CONSIDERATION OF R S.4 00 000/- RS.3 00 000/- WERE PAID BY ACCOUNT PAYEE CHEQUE NO. 092971 DRAWN ON RS.1 00 000/- WILL BE PAID AT THE TIME OF REGISTRATION OF SALE DEED. AND THROUGH POSSESSION DEED I.E. KABJ A RASID DATED 07.05.1995 THEY HAVE TAKEN THE POSSESSION OF SAID PLOT. FOR YOUR READY REFERENCE AND RECORD PURPOSE WE ARE ENCL OSING PHOTOSTAT COPY OF KABJA RASID. THE SALE DOCUMENT W AS EXECUTED ON 14.05.2001 BEFORE SUB-REGISTRAR SURAT-3. AS AG REED AT THE TIME OF TAKING THE POSSESSION OF PLOT IN THE YEAR 1 994-95 THEY HAD PAID REMAINING RS.1 00 000/- TO SAID SHRI HARMANBHA I BHIKHABHAI PARMAR BY ACCOUNT PAYEE CHEQUES DRAWN ON DENA BANK RAMPURA BRANCH SURAT. SUBSEQUENTLY CONSTRUCTION O N SAID PLOT ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 10 - WAS COMMENCED BY THEM. CONSTRUCTION WAS COMPLETED IN THE YEAR 1997 BY INCURRING TOTAL COST OF RS.19 00 205/-. TH E COST OF CONSTRUCTION WAS SHARED BY THEM AS UNDER: 4.2. OUR ATTENTION HAS ALSO BEEN DRAWN ON THE TWO V ALUATION REPORTS ONE DATED 07/07/1999 OF MR. ARVINDBHAI C.ZAVERI PROPERTY IN QUESTION VALUED AT RS.23 39 000/- AND THE OTHER ONE OF MR. SHRI SHIRISH K.KANIA DATED 20/08/2001 VALUED AT RS.1 01 80 000/-. IT MAY NOT BE OUT OF PLACE TO MENTION THAT AS PER VALUATION REPORT DATED 20/08/2001 THE VALUATION HAD TWO SEGMENTS I.E. VALUATION OF LAND AT RS.50 55 000/- AND THE VALUATION OF BUILDING AT RS.33 75 000/-. IT IS ALSO WORTH NOTING THAT IN THE SAID VALUATION REPORT THE VALUER HAS CATEGORICA LLY QUALIFIED THAT THE VALUE SO ADOPTED WAS THE FAIR MARKET VALUE OF THE P ROPERTY AS ON THAT DATE MEANING THEREBY HE HAD NOT MADE THE VALUATION TO D ETERMINE THE COST OF CONSTRUCTION OF THE BUILDING THEREFORE IT WAS OF NO HELP TO THROW ANY LIGHT ON THE AMOUNT INVESTED FOR CONSTRUCTION. THE OTHER RELEVANT POINT IS THAT IN BOTH THESE VALUATION REPORTS THE VALUERS H AVE CATEGORICALLY STATED THAT THE YEAR OF COMPLETION WAS DECEMBER-199 7. IN THE LIGHT OF THE ABOVE CORROBORATIVE EVIDENCES THE MAIN ARGUMEN T OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE WAS THAT THE ADDITION IN THE RESPECTIVE HANDS OF THE CO-OWNERS WAS MADE BY INV OKING THE PROVISIONS OF SECTION 69 OF THE I.T. ACT 1961 AND THE SECTIO N SAYS THAT WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING ASSESSMENT YEA R THE ASSESSEE HAS MADE INVESTMENT WHICH ARE NOT RECORDED IN THE B OOKS OF ACCOUNT IF ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND NO SATISFACTORY EXPLANATION IS OFFERED IN RESPECT OF THE NATURE AND SOURCE OF INVESTMENT ITA NOS.1079 & 1080/AHD/2007 THE ASST.CIT VS. SHRI PRAGNESH D.THESIA SHRI HARESH D.THESIA (RESPECTIVELY) ASST.YEAR 2002-03 - 11 - THEN THE VALUE OF INVESTMENT MAY BE DEEMED TO THE I NCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR . THIS LINE OF ARGUMENT IS JUDICIALLY CORRECT AND HAS TO BE ACCEPTED. ONCE THE PROPERTY IN QUESTION HAS UNDISPUTEDLY NOT BEEN CONSTRUCTED DURING THE FINANC IAL YEAR UNDER CONSIDERATION THEN THERE WAS NO LEGAL ACTION AVAIL ABLE ON THE PART OF THE ASSESSING OFFICER TO INVOKE THE PROVISIONS OF SECTI ON 69 OF THE I.T. ACT 1961. EVEN WHEN THE EXTREME STEP OF SEARCH AND SEI ZURE WAS CONDUCTING ON THE ASSESSEE U/S.132 OF THE I.T. ACT 1961 ON 10 .12.2003 NO MATERIAL WAS GATHERED THROUGH WHICH IT COULD BE DEMONSTRATED THAT THE CONSTRUCTION WAS MADE DURING THE PERIOD RELEVANT F OR THE ASSESSMENT YEAR 2002-03. IN VIEW OF ALL THESE REASONS WE FI ND NO FALLACY IN THE FINDINGS OF THE LEARNED CIT(APPEALS) THEREFORE AF FIRM THE SAME. GROUND RAISED BY THE REVENUE FOR BOTH THE APPEALS I S THEREFORE DISMISSED. 5. AS A RESULT BOTH THE APPEALS OF THE REVENUE ARE HEREBY DISMISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 31/05/2010. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31 / 05 /2010 T.C. NAIR SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPO NDENT 3. THE CIT CONCERNED. 4. THE LD. CIT(AP PEALS)-II AHMEDABAD 5. THE DR AHMEDABAD BENCH.6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD