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TAXAP/817/2009 4/ 4 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 817 of 2009
For
Approval and Signature:
HONOURABLE
MR. JUSTICE K.A.PUJ
HONOURABLE MS.
JUSTICE HARSHA DEVANI
=========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================
COMMISSIONER
OF INCOME TAX-I - Appellant(s)
Versus
HOTEL
CHANDAN - Opponent(s)
=========================================
Appearance
:
MRS MAUNA M
BHATT for
Appellant(s) : 1,
MR TUSHAR P HEMANI for Opponent(s) :
1,
=========================================
CORAM
:
HONOURABLE
MR. JUSTICE K.A.PUJ
aa
and
HONOURABLE
MS. JUSTICE HARSHA DEVANI
Date
: 19/10/2010
ORAL
JUDGMENT
(Per :
HONOURABLE MR. JUSTICE K.A.PUJ)
1. The
appellant – Commissioner of Income Tax, Rajkot has filed this
Tax Appeal under section 260-A of the Income Tax Act, 1961 for the
assessment year 2001-02 proposing to formulate the following
substantial questions of law for determination and consideration of
this Court:-
“Whether
the Appellate Tribunal is right in law and on facts in confirming
the order passed by the CIT(A) in restricting the addition on
account of undisclosed income in property to Rs.5,30,775/- as
against Rs.30,29,935/- made by the Assessing Officer on the basis of
DVO’s report even though it has held that the books of accounts of
the assessee are not reliable and the Assessing Officer’s action in
rejecting the book result is sustainable in law?”
“Whether
the Appellate Tribunal is right in law and on facts in confirming
the order passed by the CIT(A) in following its decision in Nalanda
Housing Development Ltd. as the said decision cannot be used for
universal application irrespective of the evidence, quantum and
facts in each case and thus whether the decision of the Appellate
Tribunal in this regard is perverse?”
2. This
Court has issued notice on 23rd August, 2010 for final
disposal. While issuing the notice, the Court has observed that the
Tribunal has not recorded any finding as to how the decision in the
case of Nalanda Housing is applicable to the facts of the present
case. On service of notice, Mr. Tushar Hemani, learned advocate
appears on behalf of the respondent assessee.
3. Heard
Mrs. Mauna Bhatt, learned Standing Counsel appearing for the revenue
and Mr. Tushar Hemani, learned advocate appearing for the respondent
assessee.
4. While
going through the impugned order passed by the Tribunal, we have
found that the Tribunal has merely reproduced the order passed in the
case of Nalanda Housing. Paragraphs no. 35 to 62 of the said
judgment are reproduced in the impugned order of the Tribunal. The
Tribunal thereafter observed that in that case, the Tribunal has
decided that where there is difference between two costs shown by the
assessee and District Valuation Officer, generally 5% to 20% of the
value shown by the assessee should be added to the value of the
property. After following the said observations given in the case of
Nalanda Housing and only with a view to maintain consistency with
the Tribunal’s order, the impugned order was passed by the Tribunal
holding therein that the assessee has shown the cost of construction
to be Rs.53,07,752/- and hence, 10% of the cost of the property i.e.
Rs.5,30,775/- disclosed by the assessee was directed to be added as
undisclosed income to the total income of the assessee. There is no
reasoning whatsoever in the Tribunal’s order. It is nowhere
reflected as to how the 10% addition is justified, how the said
decision is applicable to the facts of the present case and as to how
once the books of accounts had been rejected by the Assessing Officer
which had been upheld by the Tribunal, reliance could be placed on
the said books of accounts. All these issues will have to be
adjudicated upon and thereafter proper view is to be taken in the
matter. Since the Tribunal’s order is absolutely silent on all these
issues, we find that the impugned order being a non-speaking and
non-reasoned order, is required to be quashed and set aside.
Accordingly, we hereby quash and set aside the said order and remand
this matter back to the Tribunal for denovo consideration by the
Tribunal.
5. With
these observations and directions, this Tax Appeal is accordingly
disposed of.
(
K.A. Puj, J. )
(
Harsha Devani, J. )
hki
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