Itta/531/2010 Of Mohd. Noorul Haq v. Dy. Commissioner Of Income Tax

THE HON'BLE SRI JUSTICE V.V.S.RAOANDTHE HON'BLE SRI JUSTICE RAMESH RANGANATHAN I.T.T.A.No.531 OF 2010 ORDER:(Per Hon’ble Sri Justice Ramesh Ranganathan) This appeal, under Section 260-A of the Income Tax Act,1961, (hereinafter called the “Act”), has been preferred against theorder dated 6.3.2009 of the Income Tax Appellate Tribunal,Hyderabad Bench ‘B’, Hyderabad in I.T.(SS)A. No.43/Hyd/2002,relating to the block period 1989-90 to 1999-2000, to the limitedextent the addition of Rs.17,00,800/- by the assessing officer wasupheld. The appellant – assessee had shown a total investment ofRs.84,73,882/- towards construction of buildings i.e., a residentialhouse at Banjara Hills, a shopping complex at Gulmohar Park, aCommercial complex at Punjagutta, and row houses at SanaliVille. The assessing officer referred the matter to theDepartmental Valuation Officer (DVO) who valued the total cost ofthese four buildings at Rs.1,89,51,000/-. The objections raised bythe appellant, against the valuation of the DVO, were rejected bythe assessing officer who held that all these objections wereconsidered by the DVO while estimating the value. The differencein cost of Rs.1,04,77,117/- was treated as unexplained investment,and as the undisclosed income of the appellant herein. In appeal,the Commissioner of Income Tax (Appeals)-I {CIT(A)}, Hyderabadgave partial/full relief in respect of each of the four properties. Before the Income Tax Appellate Tribunal (ITAT) the appellant contended that if the administrative expenses, whichwere recorded separately, had been considered there would thenhave been no difference between the cost shown by him, and thevalue arrived at by the DVO; once the buildings were sold theycould have undergone certain changes; hence the valuation of theDVO was not justified; and, therefore, the addition upheld by theCIT (A) should be deleted. The ITAT held that the additions made by the assessingofficer, in respect of the Punjagutta property and the row houses atSanali Ville, had been completely deleted by the CIT (A); and theappellant had not raised any grievance about the valuation madeby the DVO in respect of these two properties. In so far as theGulmohar Park property was concerned, the ITAT observed thatthe CIT (A) had gone by the computation given by the appellant-assessee himself; wherever he felt necessary the CIT (A) haddeleted the additions like those made on account of strongfoundation, and for preparation of drawings; and the addition ofRs.12,15,976/- upheld by the CIT(A) was reasonable. With regardsthe property at Banjara Hills the ITAT noted that the CIT (A) hadgranted rebate of 25% towards rates and self-supervision; thisitself had resulted in a reduction of Rs.10,07,500/-; and theaddition sustained by the CIT (A) of a meager amount ofRs.4,84,824/- was not unreasonable. The additions, to the extentof Rs.17,00,800/-, was upheld by the ITAT. Before this Court Sri A.V.Krishna Koundinya, LearnedCounsel for the appellant – assessee, would reiterate thesubmissions made on behalf of the appellant-assessee before theITAT. Learned counsel would submit that, if the expenses recorded separately were considered, there would not have beenany difference between the cost shown by the appellant and thevaluation of the DVO; and the ITAT had erred in holding that theaddition of Rs.17,00,800/-, upheld by the CIT (A), was reasonable. Before this Court Sri A.V.Krishna Koundinya, LearnedCounsel for the appellant – assessee, would reiterate thesubmissions made on behalf of the appellant-assessee before theITAT. Learned counsel would submit that, if the expenses recorded separately were considered, there would not have beenany difference between the cost shown by the appellant and thevaluation of the DVO; and the ITAT had erred in holding that theaddition of Rs.17,00,800/-, upheld by the CIT (A), was reasonable. An appeal lies to the High Court, under Section 260-A of theAct, only on a substantial question of law. The ITAT is the finalfact finding authority and, even if its order suffers from an error inexercise of its jurisdiction or the finding of fact recorded by it iserroneous, an appeal would still not lie to this Court under Section260-A of the Act as no substantial question of law can be said tohave arisen thereby. It is only if the finding of fact recorded by theITAT is based on no evidence, or is perverse, or the ITAT fails toconsider the relevant material on record in arriving at a findingwould it give rise to a substantial question of law necessitatinginterference by this Court in an appeal filed under Section 260-A ofthe Act. The order of the ITAT does not suffer from any suchinfirmity. The ITAT has rightly observed that the appellant –assessee had not raised any grievance on the valuation of theDVO with regards the Commercial Complex at Punjagutta and therow houses at Sanali Ville; it is only in respect of the residentialhouse at Banjara Hills, and the building at Gulmohar Park, wereobjections raised regarding such valuation; the CIT (A) had goneby the computation given by the appellant - assessee himself inrespect of the Gulmohar property, had upheld the same, and haddeleted the additions made on account of strong foundation, andfor preparation of drawings; likewise, in the case of the residentialhouse at Banjara Hills, the CIT (A) had granted rebate of 25% towards rates and self-supervision which had resulted in areduction of over Rs.10-00 lakhs; and, consequently, the additionwas merely of Rs.4,84,824/-. The conclusions arrived at by the ITAT are on the basis ofthe material on record, and cannot be said to be either perverse orbased on no evidence. No substantial question of lawarises in this appeal necessitating interference by this Court underSection 260-A of the Act. The ITTA is, accordingly, dismissed. _____________ V.V.S.RAO, J ___________________________ RANGANATHAN,J .01.2011 RAMESH asp