9911796707
|
Home
Issues Involved:
1. Deletion of addition of Rs. 3,75,885 on account of valuation of property. 2. Applicability of CBDT Instruction No. 2, dated 24-10-2005 regarding the monetary limit for filing appeals. Issue-wise Detailed Analysis: 1. Deletion of Addition of Rs. 3,75,885 on Account of Valuation of Property: The revenue was aggrieved by the deletion of an addition of Rs. 3,75,885 made by the Assessing Officer (AO) on account of the valuation of property. The CIT (Appeals) had deleted this addition based on the following observations: - The assessee provided copies of bills for materials purchased and a valuation report from a registered valuer, which the AO did not find defective. - The AO estimated the cost of construction without obtaining a valuation report from the Departmental Valuation Officer (DVO) and relied on standard rates provided by the DVO. - The AO did not compare the quality of construction and other relevant factors of the assessee's house with the standard rates. - The AO did not provide the assessee an opportunity to be heard as required under section 142A(3) or by principles of natural justice. Based on these observations, the CIT (Appeals) concluded that the AO's action could not be sustained and deleted the addition of Rs. 3,75,885. The Tribunal found no valid reason to interfere with the findings of the CIT (Appeals) and upheld the deletion of the disallowance. 2. Applicability of CBDT Instruction No. 2, dated 24-10-2005: The appeal was filed by the revenue despite the tax effect being less than Rs. 2,00,000, contrary to CBDT Instruction No. 2, dated 24-10-2005, which instructed that appeals should not be filed if the tax effect is below this threshold. The Tribunal noted: - The tax effect in the instant appeal was less than Rs. 2 lakhs. - The CBDT Instruction No. 2, dated 24-10-2005, was binding on the revenue, and the department should not have filed the appeal. - Reliance was placed on the ITAT Delhi Bench decision in the case of Shri Vikram Bhatnagar and the Bombay High Court decision in CIT v. Pithwa Engg. Works, which emphasized that the circular applies even to old cases with minimal tax effect. The Tribunal further highlighted that these instructions aim to reduce unnecessary litigation and the burden on small assessees. The instructions were issued after considerable deliberation and are binding on all departmental authorities. The Tribunal cited various judicial precedents, including decisions from the ITAT Special Bench and the Hon'ble Supreme Court, supporting the binding nature of these instructions. In conclusion, the Tribunal found that the tax effect in the appeal was undisputedly less than the prescribed limit of Rs. 2 lakhs and dismissed the appeal of the revenue. The Tribunal also upheld the CIT (Appeals) decision on merit, finding no valid reason to interfere with the deletion of the addition of Rs. 3,75,885. Judgment: The appeal of the revenue was dismissed.
|
