Case Law Details
ITAT JODHPUR BENCH
Prithavi Raj Bohra
v.
Income-tax Officer, Jalore
IT Appeal No. 429 (Ju.) of 2010
[ASSESSMENT YEAR 2005-06]
Date of pronouncement: 17.07.2012
ORDER
R.K. Gupta, Judicial Member
This is an appeal by assessee against the order of the ld. CIT(A), Jodhpur dated 12-05-2010 for the assessment year 2005-06.
2.1 Various grounds have been taken by the assessee in his appeal. Ground No 2 is against upholding the action of the AO taken u/s 142A of the Act.
2.2 In this case, the proceedings u/s 147/148 were taken. Before completion of the assessment, the AO referred the matter to the DVO in view of Section 142A of the Act. Thereafter the assessment was completed and various additions were made. The assessee preferred an appeal before the ld. CIT(A) challenging the reopening of the assessment, referring the matter to the DVO u/s 142A and sustaining the addition of Rs. 5,07,021/- made by the AO on account of cost of construction of the building in the name of Prithvi Plaza. The ld. CIT(A) rejected all the grounds of the assessee and upheld the order of the AO.
2.3 Now the assessee is in appeal here before the Tribunal.
2.4 Regarding Ground No. 2 i.e. against upholding the action of the AO in referring the matter to the DVO u/s 142A, it was submitted by the ld. AR that the ld. CIT(A) has committed a mistake in not following the order of the Hon’ble Jurisdictional High Court in the case of CIT v. Pratapsingh Amrosingh [1993] 200 ITR 788 and in the case of CIT v. Hotel Joshi [2000] 242 ITR 478 as the ld. CIT(A) has followed the decision of Hon’ble Uttranchal High Court in the case of CIT v. Bhawani Shankar Vyas [2010] 311 ITR 8. It was further submitted that in fact no books of account were rejected before referring the matter to the DVO u/s 142A of the Act. It was further submitted that the decision of Hon’ble High Court has been reversed by the Hon’ble Supreme Court in the case of Sargam Cinema v. CIT [2011] 328 ITR 513. The copy of the order was also filed. Accordingly, it was submitted that the order of the AO is liable to be quashed on this ground alone.
2.5 On the other hand, the ld. DR strongly placed reliance on the order of the ld. CIT(A).
2.6 After considering the orders of the AO, ld. CIT(A) and the submissions of the ld. Counsel of the assessee, we are of the view that the assessee deserves to succeed in his legal ground. The Hon’ble Supreme Court in the case of Sargam Cinema (supra) while reversing the order of the Hon’ble High Court has held ”that the Tribunal decided the matter rightly in favour of the assessee inasmuch as the Tribunal came to the conclusion that the assessing authority could not have referred the matter to the DVO without the books of account being rejected. In the present case, a categorical finding is recorded by the Tribunal that the books were never rejected. This aspect has not been considered by the Hon’ble High Court. In the circumstances, the reliance placed on the report of the DVO was misconceived”. By observing these observations, the decision of Hon’ble High Court was set aside and the order passed by the Tribunal was restored by the Hon’ble Apex Court. The facts in the present case are similar as in this case also no books of account were rejected before referring the matter u/s 142A of the Act. The ld. CIT(A) has ignored the decision of Hon’ble Jurisdictional High Court which was binding in nature. However, he has considered the decision of Hon’ble Uttranchal High Court which has been reversed now by the Hon’ble Supreme Court. In view of these facts and circumstances of the case, we hold that the assessing officer was not justified in making any addition in view of the report given by the DVO and therefore, the appeal on this issue is allowed and the addition so made is deleted.
2.7 Since we have allowed the legal ground in referring the matter in view of the Provisions of Section 142A and the consequent addition made by the AO which was sustained by the ld. CIT(A) is deleted, therefore, we are not inclined to dispose off the legal ground for reopening of the assessment.
3.1 The issue of charging of interest is consequential in nature and therefore, the AO will allow the consequential relief to the assessee.
4. In the result, appeal of the assessee is allowed.
