Ita/767/2007 Of The Commissioner Of Income Tax v. Shri K M Prabhakar Reddy

IN THE HIGH COURT OF KARNATAKA AT BANGALORE. DATED THIS THE 274[th]DAY OF MARCH 2014. PRESENT THE HON‘'BLE MR. JUSTICE DILIP B BHOSALE AND| THE HON‘'BLE MR. JUSTICE B MANOHAR ITA.NO.767/2007 C/W ITA.NO.770/ 2007 BETWEEN 1.THE COMMISSIONER OF INCOME TAX.CR BUILDING, QUEENS ROADBANGALORECR BUILDING, QUEENS ROADBANGALORE 2.THE DEPUTY COMMISSIONER OF INCOME TAXCIRCLE - 7(1), C.R. BUILDING, QUEENS ROADBANGALORE |CIRCLE - 7(1), C.R. BUILDING, QUEENS ROADBANGALORE | .. COMMON APPELLANTS| (BY SRI KAMALADHAR, ADV., FOR SRI K V ARAVIND, ADV.,). AND SHRI K M PRABHAKAR REDDYNO.635/1, 5TH A MAIN|61TH BLOCK, KORAMANGALABANGALORE-Q5 .., COMMON RESPONDENT| (BY SRI A SHANKAR & SRI M LAVA, ADVS., FOR SRI H CSHIVARAMU, ADV.,) 1.T.A.NO.767/2007IS FILED U/S. 260A OF _ THINCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED23-8-2007 PASSED IN MP NO.74/BANG/2007 IN ITA NO.|2/4/BANG/2006 FOR THE ASSESSMENT YEAR 2002-2003,|PRAYING TQ: I.FORMULATE THE SUBSTANTIAL QUESTIONS OF|LAW STATED THEREIN II. ALLOW THE APPEAL AND SET ASIDE|THE|ORDER|PASSEDBY|THE INCOME.TAXAPPELLATETRIBUNAL,|BANGALOREIN|LTA!NO,2/4/BANG/2006DT. 23-8-200/7 AND CONFIRM THE ORDER PASSED BY THE ITATIN ITA NO.274/BANG/2006 DATED 15-06-2007, BANGALORE. 1.T.A.NO.770/ 200IS FILED U/S. 260A OF _ THINCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED31-5-2007 PASSED IN ITA NO. 297/BANG/2006 FOR THE|ASSESSMENT YEAR 2002-2003, PRAYING TO: I.FORMULATE|THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN II.|ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BYTHE INCOME TAX APPELLATE TRIBUNAL, BANGALORE IN ITA)NO.297/BANG/2006°DT.31-5-2007|(CORRIGENDUM,ASSESSEESAPPEAL )&SETASIDETHE|ORDER|OFTHE|APPELLATE COMMISSIONER & CONFIRM THE ORDER PASSED BY|THE DY.,COMMISSIONER OF INCOME TAX, CIRCLE- /7(1),BANGALORE. THESE ITAs. COMING ON FOR HEARING, THIS. DAY,| THE COURT DELIVERED THE FOLLOWING ORAL JUDGMENT(Dilip B. Bhosale J.) ITA No.767/2007filed under Section JZ60A of the|Income Tax Act, 1961 (for short *Act‘) iS Dasically directedagainst the order dated 23.08.2007 passed by Income Tax.Appellate Tribunal (for short.“the Tribunal|), disposing ofMisc.Petition No.74/Bang/2007 in ITA No.2/74/Bang/2006,pertaining to the Assessment Year 2002-03. While|disposing of the Miscellaneous Petition, the Tribunal also)disposed of ITA No.274/Bang/2006 filed by the revenue.ITA NO.770/2007is directed against tne order dated|31.05.7007|passedDYtneTripunal|inITANo.297/Bang/2006, pertaining to the Assessment Year|2002-03 wherein the Tribunal allowed the appeal in part)filed by the assessee. 2.Briefly stated the facts leading to theseappeals are as under: The respondent-assessee had filed return of incomedeclaring the income of.480,74,998/-. The return ofincome was processed by the Assessing Officer under Section 143(1) of the Act. It appears that the return was.selected for scrutiny. Tne Assessing Officer passed the)Assessment Order dated 31.03.2005 determining the total income of the assessee at |41,68,15,230/- adding two.amountsnamely|45,33,589/-towards.maintenance|charges and.<85,80,156/- as unexplained investment in|the Hosur Road Property, Bangalore. Against this order,|the assessee preferred an appeal on 28.04.2005 before the|Commissioner of Income Tax (Appeals)-III (for short=CIT(A)‘), Bangalore. The CIT(A) disposed of the appeal|filed by the assessee bearing No.ITA 13/DCIT-7(1)/CIT(A)-III/05-06 vide order dated 16.01.2006, confirming the)adaition to the extent ofd10,08,292/- out of the addition|of.485,80,156/- made by the Assessing Officer and deleted the balance addition of.475,/1,864/-. 2.1. Against the order of CIT(A) dated 16.1.2006,|the assessee aS well as the revenue filed appeals before.theTribunal|bearingITANo.297/B/2006ITA No.274/B/2006 respectively. The Tribunal disposed of and | 2.1. Against the order of CIT(A) dated 16.1.2006,|the assessee aS well as the revenue filed appeals before.theTribunal|bearingITANo.297/B/2006ITA No.274/B/2006 respectively. The Tribunal disposed of and | the appeal filed by the assessee allowing it partly andremanded the matter to the Assessing Officer to examine.the issue of maintenance charges afresh. In the presentcase, we are not concerned with the issue of maintenance|charges. Insofar as the challenge raised by the assesseeto the addition of 410,08,292/- is concerned, the Tribunal, pernaps through inadvertence, did not adjudicate the)issue. In view thereof, the assessee made oral application |before the Tribunal seeking rectification of the order dated2/.04.2007. The Tribunal having, realized its mistake,passed order being a Corrigendum Order and disposed of.the assessees appeal bearing ITA No.297/Bang/2006.answering the issue raised by the assessee in respect ofaddition to the extent of |410,08,292/-. Thereafter, it|seems, the Tribunal allowed the appeal filed py the)revenue bearing ITA No.274/Bang/2006 and remanded the)matter to the Assessing Officer for fresh consideration vide|order dated 15.06.2007. In the appeal filed by theDepartment, they had challenged the deletion of the|balance addition of |475,/1,864/- made by CIT(A). 2.2. Feeling aggrieved and dissatisfied with theorder of tne Tribunal, disposing of ITA No.274/2006, filed |by the revenue, and remanding the matter to the.Assessing Officer for its fresn consideration, the assessee|filed a Miscellaneous Petition seeking rectification of theorder dated 15.06.2007. Tne Miscellaneous Petition was/considered on merits and disposed of by the Tribunal videorder dated 23.08.2007. It was brought to the notice of)tne Tribunal tnat wnen tne order of remand dated|15.06.2007 was passed in ITA No.274/Bang/2006, filed by |the revenue, tne Corrigendum Order dated 31.05.2007|passed by the Tribunal was not taken into consideration at.all. In view thereof, the Tribunal allowed the Miscellaneous|Petition filed by the assessee vide order dated 23.08.200/,rectifying its order dated 15.06.2007, whereby the appeal|filed by the revenue bearing ITA No.274/Bang/2006 itselfcame to be disposed of finally. It is against this order, the |revenue has filed ITA No.76/7/2007 under Section 260A oftne Act. The revenue formulated the following question of|law in the memorandum of appeal: “Whether the Tribunal was justified inexercising jurisdiction, not vested in it, byreviewing its order dated 15.06.2007, wherebyit had remitted the matter to tne AssessingOfficer to reconsider the cost of construction Inrespect of the property bearing No.53/1,Madiwala, Hosur Road, Bangalore, in view ofrevised DVO report and additional evidenceproduced before the Commissioner of IncomeTax(Appeals) and proceeding to reject tneappeal filed by tne revenue by replacing para 3.in the said order?” 3.Tnere doesnt appear to be any dispute tnattne assessee nad CdIsclosec45,04,30,088/- as value of theconstruction of property in question. Since the Assessing.Officer was not satisfied with the said value, he got thevaluation of the property done through the District)Valuation Officer (for short “‘DVO). The DVO vide hisvaluation report dated 31.03.2005 valued the property at.46,/75,91,000/-. The DVO granted relief in nis revisedvaluation report dated 25.10.2005 and deducted the.amountsshownagainsttheArchitect’sFee,|Self.supervision, Internal water supply and sanitary, Internal|Electrical Installations, and placed revised valuation report|on record showing the valuation ofd6,45,89,571/-. On the 3.Tnere doesnt appear to be any dispute tnattne assessee nad CdIsclosec45,04,30,088/- as value of theconstruction of property in question. Since the Assessing.Officer was not satisfied with the said value, he got thevaluation of the property done through the District)Valuation Officer (for short “‘DVO). The DVO vide hisvaluation report dated 31.03.2005 valued the property at.46,/75,91,000/-. The DVO granted relief in nis revisedvaluation report dated 25.10.2005 and deducted the.amountsshownagainsttheArchitect’sFee,|Self.supervision, Internal water supply and sanitary, Internal|Electrical Installations, and placed revised valuation report|on record showing the valuation ofd6,45,89,571/-. On the basis of the valuation done by the DVO and the valuation.disclosed by the assessee, an addition of 485,80,156/- was|made by the Assessing Officer. According to the assessee, |the amount that was expended Dy M/s. Wipro Limited over|structural glazing and otner works was|d1,40,00,000/- andthat the Wipro had issued certificate to that effect. Thesaid certificate was placed on record for the first timebefore the CIT(A). The CIT(A) seem to have taken thatInNtOconsideration anddeductedtneamount.OT|41,40,00,000/- from the amount of valuation done by tneDVO of.46,45,89,5/71/-. The error in calculation made by|the Assessing Officer and corrected by the CIT(A) was.confirmed by the Tribunal in the order wnile disposing of|Miscellaneous petition. The Tribunal also found that theorder of remand of the Revenue’s appeal, would be futileexercise. 3.1. Tne facts as stated in the foregoing paragrapnnave not been disputed py the revenue in the present.appeal and the challenge to the order passed by the) Tribunal is on technical ground. This being so and naving|satisfied that there was an error of calculation made by the)Assessing Officer, we do not find any reason to interferewith the concurrent finding of facts recorded by the CIT(A) and the Tribunal. In any case it would not be correct to)Statetnat|theTribunal|reviewedIts|order|cated15.06.2007 whereby the matter was remanded to tneAssessing Officer. If, the error that was noticed by the)Tribunal while deciding the Miscellaneous Petition is taken|into consideration, we do not find any reason to interferewith the order passed by the Tribunal. We are also|satisfied that the Tribunal has rightly rectified the error ofcalculation while considering the Miscellaneous Application|for rectification under Section 254 of the Act. In the.circumstances, no substantial question of law, in our)Opinion, arise for our consideration in the present appeal.Hence,ITA.No.767/2007 Is dismissed.Similarly,theappealbearingITA|No.770/200/7, |whereinthe|revenue|hadchallenged the | the | "�������� ��#�����������$%��&�������������������������������������������'�������! �����'�!�������!��! �����!����'�����!�����9�89/�/$� ���� ����������4) �����L����� ���4) �����L�����