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TMI Blog2021 (5) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... penses - AO had adopted the Current Value of the construction exp. and added the proportionate const, exp.- AO not making any reference to DVO - HELD THAT:- First of all, it is seen that there was no evidence before the AO regarding the date of the construction of the property. Consequently, the value of the property has been made on estimation basis. Assessee has brought my attention to the report of the Valuer obtained from Punjab Vigilance Bureau upon which the AO has relied upon, wherein, the year of construction has been mentioned as 2008 to 2011. The value of the property, however, has been assessed as on 3.3.2015. Therefore, the value of the property has been estimated in the year 2015 and the addition has been made on proportionate basis taking the value of the property as on 3.3.2015, whereas, it is own case of the department that the property has been constructed from 2008 to 2011. The assessee had further requested the AO to get all the details in this respect from M/s. ICRMS company, however, the AO totally ignored the aforesaid request of the assessee and simply relied upon the report of the valuer attached alongwith the report of the Punjab Vigilance Bureau. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) in Appeal No. 10349/16-17 has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961. 2. That on law, facts and circumstances of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had erred by issuance of notice u/s. 148 of the Act and had further erred in continuation and completion of the said re-assessment proceedings u/s. 147 of the Act even when the whole of the process was illegal and against the provisions of Income Tax Act and hence required to be declared void-ab-initio. 3. That on law, facts and circumstances of the case, Worthy CIT(A) has erred in completing the impugned assessment u/s. 147 without the issuance of valid notice u/s. 143(2) of the Income Tax Act, 1961. 4. That on law, facts and circumstances of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had erred in making aggregate additions of ₹ 3,25,000/- on issue in assessment finalized u/s. 147 even when the re-assessment proceedings were initiated on an altogether different issue, the final addition is on a different issue and no addition on the issue on which re-opening w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) has erred in confirming the action of Ld. AO wherein Ld. AO had erred in making addition of ₹ 1,20,000/- ignoring the fact, submission and documents placed on record by erroneously holding that such income claimed by the appellant to have been earned from agricultural operation is actually earned from other sources. 12. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 2. A perusal of the above grounds of appeal reveal that ground No. 1 and 12 are general in nature, hence they need no specific adjudication. Ground No. 2 to 6 3. The assessee through ground Nos. 2 to 6 has agitated the validity of the re-opening of the assessment u/s. 147 read with 148 of the Act. 4. I have heard the rival submissions and perused the material available on record. The Assessing Officer (in short 'AO') recorded the following reasons for re-opening of the assessment: Reason for reopening the case u/s. 147/148 of the Income Tax Act. 1961 An information was received from the Deputy Director of-. Income- Tax (Investigation)-II, Chandigarh vide his office letter No. 3578 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eous. That, infact, the property was initially on lease for two years with M/s. ICRMS Pvt. Ltd. and as per agreement the M/s. ICRMS Pvt. Ltd. has done all the construction on this property and at that time, the labour quarters on the property has been renovated to be made into toilets. As such, the details of cost on the construction of boundary, pathway, toilets, etc. may be sought from M/s. ICRMS Pvt. Ltd. (under various litigations). That was proper Lease Agreement between M/s. ICRMS Pvt. Ltd. and Fateh Softech Pvt. Ltd. in this regard. That the copy of said Lease Agreement may be obtained from M/s. ICRMS Pvt. Ltd. as Shri Jatinder Singh Dua (shareholder director of ICRMS Pvt. Ltd.) has stolen the company records as detailed in FIR 286/13 and the orders of dismissal of bail application of JS Dua by ASJ, Chandigarh Hon'ble High Court. It was also pleaded that the construction otherwise had been done in the year 2006-07 and hence, no income can be added in the year under consideration even on proportionate basis. The assessee also relied upon the valuation report of the approved valuer M/s. Nandini Associates to submit that the construction was made in the year 2006-07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to get approximate date of construction of the property as well as value of the property on the date of construction. No such exercise has been done by the AO. The addition has been made just on estimation basis on the borrowed satisfaction of the Punjab Vigilance Bureau without any independent investigation in the matter by the AO. Such an addition made on the basis of mere suspicion, in my view, is not sustainable in the eyes of law. This addition is accordingly set aside. Ground No. 11: 13. Vide ground No. 11, the assessee has agitated the addition of ₹ 1.20 lacs made by the AO as income from other sources as against declared by the assessee as 'agricultural income'. The assessee had shown agricultural income of ₹ 1.20 lacs contending that the same was earned from the lease of the agricultural land. The assessee in this respect produced affidavit of one Mr. Kuldeep Singh S/o Shri Chhaju Singh from whom the agriculture income/Batai was received. However, the AO rejected the aforesaid affidavit of Shri Kuldeep Singh and held that the aforesaid income of the assessee was not from agriculture activity and assessed the same as income from other sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment in haste and without affording reasonable opportunity to the appellant and therefore the impugned assessment framed is against the principles of natural justice and hence deserves to be quashed. 5. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had acted with a biased and prejudice mind in framing the impugned assessment order and carrying out the re-assessment proceedings and therefore the said appeal is illegal and deserves to be quashed. 6. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had adopted ₹ 32,84,000/- the Current Value of the construction exp. and added ₹ 8,21,000/- the proportionate const, exp., even though the construction activity was actually carried out in FY 2006-07 and that too by M/s. ICRMS (P) Ltd., to whom the property was given on lease. 7. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had adopted ₹ 32,84,000/- as the construction exp. and added ₹ 8,21,000/- the proportion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 for the A.Y. 2009-10. 18. A perusal of the above reasons recorded reveal that reopening of the assessment has been made by the AO on the report of Investigation Wing that the assessee company has been using its assets for arranging marriage functions. However, the assessee has not offered any income from the above activity. Further it was noticed that the assessee had also invested a sum of ₹ 32.84 lacs on construction/development of farm houses/resort at its land but no such expenses are reflected in the balance sheet of the company. Therefore, the AO formed the belief that the income of the assessee had escaped assessment. 19. The ld. counsel for the assessee, in this respect has submitted that the assessee does not own any marriage palace or resort as alleged by the AO. That there was no reliable information/document/evidences available with the AO to form the belief that the assessee has been running any marriage palace or had constructed a resort as has been alleged in the reasons recorded. He has further submitted that even otherwise, the AO has not made any addition on account of income from any marriage palace/resort. The ld. DR on the other hand has rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 147 without the issuance of valid notice u/s. 143(2) of the Income Tax Act, 1961. 4. That on law, facts and circumstances of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had erred in making the assessment in haste and without affording reasonable opportunity to the appellant and therefore the impugned assessment framed is against the principles of natural justice and hence deserves to be quashed. 5. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein Ld. AO had acted with a biased and prejudice mind in framing the impugned assessment order and carrying out the re-assessment proceedings and therefore the said appeal is illegal and deserves to be quashed. 6. That on law, facts and circumstances of the case, the worthy CIT(A) has erred in confirming the action of ld. AO wherein ld. AO had adopted ₹ 32,84,000/- the Current Value of the construction exp. and added ₹ 8,21,000/- the proportionate const, exp., even though the construction activity was actually carried out in FY 2006-07 and that too by M/s. ICRMS (P) Ltd., to whom the property was given o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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