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TAXAP/1543/2010 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1543 of 2010
=========================================================
COMMISSIONER
OF INCOME TAX-II - Appellant(s)
Versus
HARIPRASAD
MALPANI - Opponent(s)
=========================================================
Appearance
:
MRS
MAUNA M BHATT for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 27/09/2011
ORAL
ORDER
(Per
: HONOURABLE MS JUSTICE SONIA GOKANI)
1. The
appellant-Revenue being aggrieved by the order of Income Tax
Appellate Tribunal dated 30th October, 2009, has
preferred the present Appeal under section 260-A of the Income Tax
Act, 1961, (hereinafter referred to as “the Act”)proposing
the following questions of law for determination of this Court.
Whether, on the facts
and in the circumstances of the case, the Income Tax Appellate
Tribunal is right in law in restricting addition to the extent of
Rs.10 lakhs only out of Rs.32 lakhs upheld by the Appellate
Commissioner towards the cost of construction of the building ?
Whether, on the facts
and in the circumstances of the case, the Income Tax Appellate
Tribunal is right in law in reversing the findings arrived at and
the conclusion reached by the Appellate Commissioner while upholding
the addition of Rs.32 lakhs towards the cost of construction of the
bungalow, without assigning any cogent and relevant reasons ?
Whether, on the facts
and in the circumstances of the case, the order of the Income Tax
Appellate Tribunal is contrary to the evidence and material on the
record of the case and, hence perverse or not ?
2. Briefly to state the
facts –
The assessee is engaged in
the business of grey cloth and trading of grey cloth, sarees, etc.
The brother of assessee is running different concerns .
3. A search operation was
carried out u/s. 132 of the Income Tax Act, 1961 (hereinafter
referred to as “the Act”) on 13th June,
2002 at the residential premises and business establishment of
Malpani Group, where number of documents and materials were dug out
and seized vide panchnama dated 13th June, 2002. On the
basis thereof, notice was issued u/s. 158BC of the Act and on due
adjudication Assessing Officer made addition of Rs. 2,27,97,492/- on
account of unaccounted expenses with regard to construction of
bungalow namely, Shree Niketan . Addition of Rs.49,27,440/- was also
made by way of unaccounted grey cloth stock.
4. This was challenged
before the Commissioner of Income Tax (A) which partly allowed the
appeal and thereby directed set off against unidentified undisclosed
income.
5. When challenged before
the Tribunal, it allowed the appeal of assessee-respondent and
dismissed the appeal of Revenue but restricted addition of the
investment of construction of bungalow to the tune of Rs.10.00 Lakhs
only and thereby confirmed the order of CIT(A).
6. The impugned order is
challenged by proposing the aforementioned questions of law .
7. Learned counsel Mrs.Mauna
Bhatt has vehemently submitted before this Court that there is no
rational basis given by the Tribunal for reducing addition of Rs.
32.00 Lakhs to Rs.10.00 Lakhs and in absence thereof this reduction
must not be uphold.
8. Having heard learned
counsel Mrs.Mauna Bhatt appearing for the Revenue and on duly
considering the material evidence on record as well as examining the
orders of adjudicating authorities for the reasons to be followed
hereinafter, the appeal requires to be dismissed.
9. Although the questions
are more than one, it is essentially one question which requires to
be addressed to. Tribunal in the instant case noted that the
Assessing Officer did not refer aspect of construction in question
to the DVO. Assessing Officer also did not obtain any report for
unexplained expenditure made in the said bunglow. Total area of
bunglow was 22342 sq.feet which also includes area of parking and
basement of bunglow to the tune of 9452 sq. ft.
10. After elaborate
discussion, it was noted that there were two kinds of valuation
reports one for the purpose of availing bank loan which was on
higher side, and other valuation report was by one Shri Rajnikant
Talia whose report was not considered. One Shri Satish Shah whose
valuation report produced by the assessee had valued the cost of
construction at Rs.1,71,85,000/- where he had also given record of
construction cost of basement.
11. As can be noted by the
Tribunal had chosen not to accept either of the reports, of Shri
Satish Shah or that of Mr.K.O.Shah who had prepared the report for
availing the loan from the bank. Tribunal also noted that there was
no reference to the DVO. It estimated the addition of Rs.10.00 Lakhs
on adhoc basis towards the cost of construction and thereby orders of
CIT(A).
12. As can be seen from the
detailed discussion of the Tribunal, basis taken is factual in
nature. Tribunal though has made estimation for calculating the
addition of Rs.10.00 Lakhs. It can be said that for reduction of said
amount, no formula has been worked out in as much as elaborate
discussion on the facts are clearly indicative that the Tribunal
did take note of prevalent condition for reduction of the amount.
This Court finds no infirmity in the order of Tribunal warranting any
interference. This Tax Appeal requires no further consideration and
hence is dismissed.
{Akil Kureshi, J.}
{Ms.Sonia
Gokani,J.}
bina
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