Commissioner Of Income Tax-Ii, Chandigarh v. M/S Star Resorts (P), Ltd. C-104, Industrial Area, Phase-Vii, Mohali

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 54 of 2009.Date of Decision : 4.3.2009. Commissioner of Income Tax-II, Chandigarh Versus ....Appellant M/s Star Resorts (P), Ltd. C-104, Industrial Area, Phase-VII, Mohali. ....Respondent CORAM:Hon'ble Mr. Justice J.S. KheharHon'ble Mr. Justice Nawab Singh Present :Ms. Urvashi Dhugga, Advocate,for the appellant. J.S. Khehar. J. (Oral) It is not a matter of dispute that the respondent-assesseewhile submitting his income tax return for the assessment year 2003-04depicted cost incurred towards the construction activity for a Holiday Resortby depicting estimated cost thereof. It is apparent, that on the basis ofestimated cost, it was not possible for the Revenue to determine thequantum of depreciation that had to be allowed to the respondent-assesseeunder Section 32 of the Income Tax Act, 1961. The Assessing Officerrequired the actual cost to be determined by the District Valuation Officerand on the basis thereof, allowed a deduction thereof in the nature ofdepreciation to the respondent-assessee. The aforesaid determinationrendered by the Assessing Officer by his order dated 29.3.2006 wasimpugned by the respondent-assessee by preferring an appeal before theCommissioner of Income Tax (Appeals), Chandigarh. The Commissioner ofIncome Tax (Appeals) accepted the aforesaid appeal vide his order dated27.12.2006. Dis-satisfied with the order rendered by the Commissioner ofIncome Tax (Appeals), Chandigarh dated 27.12.2006, the Revenue ITA No. 54 of 2009. preferred an appeal before the Income Tax Appellate Tribunal. Theaforesaid appeal was further dismissed by an order dated 23.7.2008. It is apparent from the order passed by the Income TaxAppellate Tribunal dated 23.7.2008, that the issue in hand, namely,depreciation on the expenses incurred by the respondent-assessee on theconstruction of its Holiday Resort could not have been determined on thebasis of any rough estimate. In order to afford an opportunity to therespondent-assessee to lead evidence, so as to establish the actual costincurred by him in the construction of the aforestated Holiday Resort, theIncome Tax Appellate Tribunal remanded the matter back to the AssessingOfficer so as to enable the respondent-assessee to lead evidence to establishthe actual cost incurred. We find no infirmity in the aforesaid determination atthe hands of the Income Tax Appellate Tribunal. Needless to mention thatin case the respondent-assessee is not in an effective position to produceevidence to substantiate the actual cost incurred by him (on the constructionof the Holiday Resort) it will be open to the Assessing Officer to fall backon the report tendered by the District Valuation Officer. For the reasons recorded hereinabove, as well as, theclarification depicted in the foregoing paragraph, we uphold the orderpassed by the Income Tax Appellate Tribunal dated 23.7.2008.Dismissed. (J.S. Khehar) Judge (Nawab Singh) Judge