ACIT, Range-2,, v. Surya Nursing Home,,

ITA 3077/DEL/2005 | 1997-1998
Pronouncement Date: 25-02-2010 | Result: Dismissed

Appeal Details

RSA Number 307720114 RSA 2005
Bench Delhi
Appeal Number ITA 3077/DEL/2005
Duration Of Justice 4 year(s) 7 month(s) 19 day(s)
Appellant ACIT, Range-2,,
Respondent Surya Nursing Home,,
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 25-02-2010
Date Of Final Hearing 25-02-2010
Next Hearing Date 25-02-2010
Assessment Year 1997-1998
Appeal Filed On 06-07-2005
Judgment Text
IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH-A NEW DELHI BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER & SHRI A.K. GARODIA ACCOUNTANT MEMBER I.T.A.NO.3077 /DEL/2005 ASSTT. YEAR 1997-98 ASSTT. COMMISSIONER OF INCOME-TAX VS. M/S SURYA NU RSING HOME CIRCLE-2 GHAZIABAD. 28 RAKESH MARG GHAZIABAD. PAN: S-306 (APPELLANT) (RESPONDENT) APPELLANT BY : MS. PRATIMA KAUSHIK SR. D.R. RESPONDENT BY : SHRI AKHILESH KUMAR ADVOCATE O R D E R PER R.P. TOLANI JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A) GHAZIABAD DATED 6.4.2005 PERTAINING TO ASSE SSMENT YEAR 1997-98. 2. FOLLOWING TWO GROUNDS HAVE BEEN RAISED:- 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.9 45 000/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF UNEXPLAINED LOANS WITHOUT APPRECIATING THE FACT THA T THE CREDITWORTHINESS OF THE PERSONS WHO HAVE ALLEGEDLY ADVANCED THE LOANS REMAIN UNPROVED. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.9 20 469/- MADE BY THE ASSESSING OFF ICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY W ITHOUT ITA NO.3077/DEL/2005 2 APPRECIATING THE FACT THAT THE VALUATION OFFICER H AS MADE CORRECT VALUATION OF THE BUILDING AND THE ASSESSEE HAS NEVER FILED ANY OBJECTION WITH REGARD TO THE COST OF CONS TRUCTION AS ARRIVED AT BY THE VO EITHER DURING THE COURSE OF VA LUATION OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE L D. CIT(A) HAS ALSO ERRED IN DELETING THE ADDITION WITHOUT GIV ING AN OPPORTUNITY OF BEING HEARD EITHER TO THE V.O. 2. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 3. THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION IN RESPECT OF CONSTRUCTION. T HE PARTNERSHIP FIRM WAS CONSTITUTED BY A PARTNERSHIP DEED DATED 12.7.1996 W .E.F. 1.4.1996. CONSEQUENTLY THE CONSTRUCTION WORK OF THE NURSING HOME WAS COMMENCED THEREAFTER. ASSESSEE IN ITS BOOKS OF ACCOUNTS HAD SHOWN AN AMOUNT OF RS.41 42 411 AS COST OF CONSTRUCTION. THE ASSESSEE SUBMITTED A VALUATION REPORT FROM ITS REGISTERED VALUER WHICH CLEARLY SHOWS COM MENCEMENT OF CONSTRUCTION WORK FROM 2.4.1996 AND COMPLETION ON 31.3.1997. CO NSEQUENTLY THE ISSUE OF COST OF CONSTRUCTION COMES IN ASSESSMENT YEAR 1997- 98. NO COST IS ATTRIBUTABLE TO ASSESSMENT YEAR 1996-97. THE ASSESSEES REGISTE RED VALUER HAS ADOPTED CPWD RATES ONLY WHICH HAS BEEN ADOPTED BY THE GOVT. VALUER ALSO. THE GOVT. VALUER HAS ERRONEOUSLY HELD THAT THE CONSTRUCTION W AS CARRIED OUT IN FINANCIAL YEARS 1995-96 AND 1996-97 I.E. ASSESSMENT YEARS 199 6-97 AND 1997-98. THE CIT(A) RIGHTLY ADDRESSED THE ISSUE AND DELETED THE ADDITION. THE ORDER OF THE CIT(A) WAS RELIED ON. 4. APROPOS CASH CREDITS THE LD. COUNSEL FOR THE AS SESSEE CONTENDS THAT ALL THE DETAILS IN RESPECT OF FOUR CREDITORS WERE FILED BEFORE THE ASSESSING OFFICER AND ITA NO.3077/DEL/2005 3 THE CIT(A). SHRI VIPUL GUPTA AND SHRI DEEPAK TYAGI WERE DULY ASSESSED TO TAX. ALL THE AMOUNTS WERE ADVANCED THROUGH ACCOUNT-PAYEE CHEQUES SUPPORTED BY CONFIRMATION LETTERS. THIS IS A SECOND ROUND OF LI TIGATION. THE CIT(A) HAS DELETED THE ADDITION OBSERVING AS UNDER:- 6. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE AS BRIEFLY STATED ABOVE I HOLD THAT SINCE BOTH SRI VI PUL GUPTA AND SRI DEEPAK TYAGI ARE REGULAR INCOME TAX ASSESSES WHO HAVE DULY CONFIRMED AND HAVE SHOWN THE LOANS TO THE APPELLANT IF ANY ADDITION F OR SUMS BEING UNEXPLAINED TO BE MADE CAN BE CONSIDERED ONLY IN TH EIR RESPECTIVE CASES AND NOT IN THE CASE OF THE APPELLANT FIRM. AS REGA RDS THE OTHER TWO PARTIES ARE CONCERNED VIZ. SMT. SHYAMWATI AND SRI SANJEEVAN SINGH THE APPELLANTS PLEA WAS THAT THE ASSESSING OFFICER HAD NOT CONSIDERED THE GENUINENESS AND CAPACITY ON CORRECT APPRECIATION OF FACTS RELATING TO MEMBERS IN THEIR FAMILY ETC. BEFORE HOLDING THAT T HE SUMS COULD NOT BE ADVANCED TO THE APPELLANT. LD. CIT(A) IN THE ORDER DATED 12.09.2000 ALSO NOTED THE PLEA OF THE APPELLANT THAT THE DEPOSITORS CAN BE PRODUCED PERSONALLY FOR VERIFICATION. THE ENTIRE FACTS AS E XAMINED BY THE LD. CIT(A) IN APPEAL AGAINST THE ORIGINAL ASSESSMENT PROCEEDIN GS AND AS FURNISHED BEFORE THE ASSESSING OFFICER ARE REITERATED IN THE APPEAL PROCEEDINGS. IT IS EVIDENT THAT THE AGRICULTURAL HOLDINGS OF THE TWO P ARTIES AND THE AGRICULTURAL INCOME DERIVED THEREFROM AND AFTER ACCOUNTING FOR T HE HOUSEHOLD EXPENSES ON THEIR FAMILIES THEY WERE IN THE CAPACIT Y TO ADVANCE THE SUMS AS LOAN TO THE APPLICANT ASSESSEE FROM THEIR AGRICU LTURAL INCOME. THEY ARE ALSO ADMITTEDLY SISTER AND SISTERS SON OF ONE OF T HE PARTNERS OF THE APPELLANT FIRM WHO ARE ADMITTEDLY HAVING INCOME OF RS.1 LAC AND RS.60 000/- PER YEAR AND THEY HAVE ADMITTEDLY NOT G IVEN ANY OTHER LOAN TO ANY OTHER PERSON. BESIDES SMT. SHYAMWATI IS ALSO HAVING RENTAL INCOME. THE CONFIRMATIONS FROM THE PARTIES THEIR IDENTITY AS WELL AS THE SUMS ADVANCED TO THE APPELLANT FIRM ON THE FACTS RELATIN G TO THE INCOME EARNED BY THEM THE CREDITWORTHINESS OF THE TWO PARTIES AL SO REMAINED ESTABLISHED BEFORE THE ASSESSING OFFICER. THEREFORE THE A.O. NOT RIGHT IN TREATING THE LOANS AS UNEXPLAINED. THE ADDITION OF RS.9 45 000/ - MADE ON THIS SCORE IS THEREFORE HEREBY DELETED. THE REMAINING TWO CREDITORS ARE SISTER AND SISTERS SON OF ONE OF THE PARTNERS WHO HAVE INCOME OF RS.1 LAKH AND RS.60 000 PER YEAR AND HAD NOT GIVEN ANY OTHER LOAN. THE ORDER OF THE CIT(A) WAS RELIED UPON. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. ITA NO.3077/DEL/2005 4 6. APROPOS FIRST GROUND WE ARE OF THE VIEW THAT TH E GOVT. VALUATION OFFICER HAS ERRONEOUSLY REFERRED TO ASSESSMENT YEAR 1996-97 WHEN THE ASSESSEE FIRM WAS NEITHER IN EXISTENCE NOR ANY CONSTRUCTION WORK WAS CARRIED OUT. IN VIEW THEREOF THE GOVT. VALUERS REPORT BECOMES NON-RELI ABLE. APROPOS THAT ASSESSEE HAS FILED REPORT FROM THE REGISTERED VALUER WHICH H AS TAKEN THE CPWD RATES FOR VALUATION OF THE CONSTRUCTION. IN THE GIVEN FACTS AND CIRCUMSTANCES THE CIT(A) HAS TAKEN AN APPROPRIATE VIEW DELETING THE ADDITION ON ACCOUNT OF ALLEGED DIFFERENCE IN THE COST OF CONSTRUCTION. ADMITTEDLY TWO CREDITORS I.E. SHRI VIPIL GUPTA AND SHRI DEEPAK TYAGI ARE REGULAR ASSESSEES. THESE CASH CREDITS ARE TO BE ACCEPTED. APROPOS THE REMAINING TWO PERSONS NA MELY SMT.SHYAMWATI AND SHRI SANJEEVAN SINGH THE ASSESSEE HAS DISCHARGED I TS PRIMARY BURDEN OF IDENTITY GENUINENESS AND CREDITWORTHINESS BASED ON CONFIRMATIONS AND AGRICULTURAL LANDHOLDINGS. IN OUR VIEW THE EXPLAN ATION HAS NOT BEEN REBUTTED EXCEPT CREATING SOME SUSPICION. IN VIEW THEREOF W E SEE NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE ALSO WHICH IS UPHEL D. 7. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.2.2010. SD/- SD/- ( A.K. GARODIA ) ( R.P. TOL ANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.02.2010 VSK ITA NO.3077/DEL/2005 5 COPY TO: 1. APPELLANT-REVENUE 2. RESPONDENT-ASSESSEE 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. ASSISTANT REGISTRAR