High Court of Punjab and Haryana, Chandigarh
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COMMISSIONER OF INCOME TAX, HISAR v. M/S SWASTIK UDYOG PVT. LTD., HISAR - ITA-384-2005  RD-P&H 327 (23 December 2005)
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYAN AT CHANDIGARH
C.M. No.19115-CII of 2005 in/and
Income Tax Appeal No.384 of 2005
C.M. No.19114-CII of 2005 in/and
Income Tax Appeal No.383 of 2005
Date of decision: January 03, 2006.
Commissioner of Income Tax, Hisar
Mr. D.S. Patwalia, Advocate
M/s Swastik Udyog Pvt. Ltd., Hisar
HON'BLE MR. JUSTICE D.K. JAIN, CHIEF JUSTICE HON'BLE MR. JUSTICE SURYA KANT
1. Whether Reporters of local papers may be allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the Digest. Income Tax Appeal No.384 of 2005 - 2 -
D.K. Jain, C.J. (Oral)
C.M. Nos. 19114 & 19115-CII of 2005
For the reasons stated in the application, delay in filing the appeals is condoned.
Applications stand disposed of.
Income Tax Appeal Nos.383 & 384 of 2005
These two appeals by the revenue under Section 260A of the Income Tax Act, 1961 (for short the Act) are directed against order, dated January 09, 2002, passed by the Income Tax Appellate Tribunal, Delhi bench "A", New Delhi (for short the Tribunal) in ITA No.3765/Del./96 and 3917/Del./95 pertaining to the assessment years 1992-93 and 1991-92.
Since the issue involved in both the appeals is similar, these are being disposed of by this common order.
According to the revenue, the impugned order involves the following substantial questions of law:-
1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was justified in law in dismissing the role and significance of the Valuation Cell of the Department Income Tax Appeal No.384 of 2005 - 3 -
constituted for the purpose of valuation and concurring with the Ld. CIT(A).
2. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is justified in law in relying upon the valuation report of the Registered Valuer and rejecting the valuation report of the Valuation Cell of the Department specially constituted for the purpose of valuation.
3. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is justified in observing that the AO has not brought any material on record to prove that the estimate given by the assessee through his Registered Valuer is not correct.
4. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is justified in ignoring the findings of the AO regarding shortcomings in the books of account as well as the defects pointed out by the DBO in the report of the Registered Valuer.
The background facts, in brief, giving rise to the present appeals are as follows:-
Income Tax Appeal No.384 of 2005 - 4 -
During the course of assessment proceedings for the relevant assessment years, the Assessing Officer noticed that the respondent- company had constructed its factory building during the period from June, 1989 to August, 1993. The amount spent on the said construction was stated to be Rs.1,11,84,602/-. In support of its stand, the assessee submitted a valuation report prepared by a Registered Valuer. Doubting the correctness of the said report, the Assessing Officer referred the matter of valuation to the Departmental Valuation Officer (DVO for short), who estimated the total cost of construction at Rs.1,63,28,450/-. The DVO also apportioned the estimated cost of construction in respect of each of the relevant previous years. Since there was difference in estimation of cost of construction in the two valuation reports, the Assessing Officer himself estimated the cost of construction and added the difference between assessee's valuation and his estimate to the income returned by the assessee.
Aggrieved, the assessee took the matter in appeal to the Commissioner of Income Tax (Appeals), who deleted the addition so made in both the years.
Feeling aggrieved, the revenue took the matter in further appeal to the Tribunal. By the impugned order, the Tribunal has upheld the view Income Tax Appeal No.384 of 2005 - 5 -
taken by the Commissioner (Appeals). Hence, the present appeals.
Having heard learned counsel for the revenue, we are of the view that the appeals are utterly misconceived. The Tribunal, while upholding the view taken by the Commissioner (Appeals) has returned a finding that apart from the fact that the valuation report submitted by the assessee was prepared by a Valuer approved by the Central Board of Direct Taxes, almost all items of construction were accounted for in the books of account maintained by the assessee. The Tribunal has held that without pointing out any defect in the books of account, so maintained, the Assessing Officer could not estimate the cost of construction. We are in complete agreement with the view taken by the Tribunal.
In this view of the matter, no question, much less a substantial question of law, arises from the impugned order. Consequently, we decline to entertain the appeals.
[ D.K. Jain ]
January 03, 2006. [ Surya Kant ]
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