Rate applicable on valuation of residential house

Last updated: 03 November 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
That the Learned Assessing Officer has wrongly applied the valuation of Residential House as made by District Valuation Officer which is based on material rates prescribed by CPWD. With a contractors margin of 10% on supplying / fixing/ providing of material. While the appellant has submitted Valuation report of Govt. approved valuer who has applied prescribed rate by PWD. That the valuation should be taken on the basis of prescribed rates of UPPWD.

Citation :
Smt. Ranbiri Devi, 503, Patel Nagar, New Mandi,muzaffarnagar -251001 (UP) (PAN: AGRPD8570H) (Appellant) Vs. Income Tax Officer, Ward 2(3),Aaykar Bhavan,(Respondent)

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH “SMC” NEW DELHI

BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER

I.T.A. No. 4999/Del/2011

A.Y.: 2005-06

Smt. Ranbiri Devi,

503, Patel Nagar, New Mandi,

Muzaffarnagar -251001 (UP)

(PAN: AGRPD8570H)

(Appellant)

Vs.

Income Tax Officer,

Ward 2(3),

Aaykar Bhavan,

(Respondent)

I.T.A. No. 5000/Del/2011

A.Y.: 2005-06

Sh. Ashish Malik,

503, Patel Nagar, New Mandi,

Muzaffarnagar -251001 (UP)

(PAN: AIVPM1464F)

(Appellant)

Vs.

Income Tax Officer,

Ward 2(3),

Aaykar Bhavan,

Muzaffarnagar – 251001 (UP)

(Respondent)

I.T.A. No. 5001/Del/2011

A.Y. : 2005-06

Sh. Manish Malik,

503, Patel Nagar, New Mandi,

Muzaffarnagar -251001 (UP)

(PAN: AJFPM8104P)

(Appellant)

Vs.

Income Tax Officer,

Ward 2(3),

Aaykar Bhavan,

Muzaffarnagar – 251001 (UP)

(Respondent)

I.T.A. No. 5002/Del/2011

A.Y.: 2005-06

Sh. Om Singh Malik,

503, Patel Nagar, New Mandi,

Muzaffarnagar -251001 (UP)

(PAN: ACKPM7964R)

(Appellant)

Vs.

Income Tax Officer,

Ward 2(3),

Aaykar Bhavan,

Muzaffarnagar – 251001 (UP)

(Respondent)

I.T.A. No. 5003/Del/2011

A.Y. : 2007-08

Sh. Om Singh Malik,

503, Patel Nagar, New Mandi,

Muzaffarnagar -251001 (UP)

(PAN: ACKPM7964R)

(Appellant)

Vs.

Income Tax Officer,

Ward 2(3),

Aaykar Bhavan,

Muzaffarnagar – 251001 (UP)

(Respondent)

Assessee by: Sh. Sanjay Kumar Singhal, Adv.

Department by: Dr. B.R.R. Kumar, Sr. D.R.

ORDER

These appeals by the separate assessees are directed against the orders of the Ld. Commissioner of Income Tax (A) for the assessment years 2005-06 and 2007-08 respectively. Since the issues are common and connected, the appeals were heard together and these are being consolidated by this common order for the sake of convenience.

2. The common grounds pressed in these cases are as under:-

“That the Learned Assessing Officer has wrongly applied the valuation of Residential House as made by District Valuation Officer which is based on material rates prescribed by CPWD. With a contractors margin of 10% on supplying / fixing/ providing of material. While the appellant has submitted Valuation report of Govt. approved valuer who has applied prescribed rate by PWD. That the valuation should be taken on the basis of prescribed rates of UPPWD.”

3. For Assessment year 2005-06:- The Assessing Officer noted that in the investment of house four persons are partners, they are Sh. Om Singh Malik (Husband), Manish Malik (Son), Sh. Ashish Malik (Son) and Smt. Ranbiri Devi (Assessee/Wife). All four assessee’s claimed that investment made in this year is ` 29,00,000/-. But as per DVO report the investment made in the property in this year is at the tune of ` 32,07,734/-. Thus, he opined that all four assessees has concealed the investment of ` 3,07,734/-. On bifurcation, Assessing Officer observed that assessee is having investment of following amounts from concealed sources:-

Ranbiri Devi - `87545/-

Om Singh Malik - ` 53057

Ashish Malik - ` 79586/-

Manish Malik - ` 87545/-

4. For assessment year 2007-08:- In the case of Om Singh Malik, Assessing Officer observed that Sh. Om Singh Malik alongwith other assessees claimed that investment made in the house property was of ` 14,68,184/-. But according to DVO report the investment made in the property in this year was at the tune of ` 16,34,211/-. Thus, all four assessees has concealed the investment of ` 1,66,027/- in this year. On bifurcation, the assessee Shri Om Singh Malik’s share which has been invested short of ` 47,855/-. The same was added as income from concealed sources.

5. Against the above order the Assessees appealed before the Ld. Commissioner of Income Tax (A) and the Ld. Commissioner of Income Tax (A) confirmed the Assessing Officer’s action.

6. Against the above order the assessees are in appeal before me.

7. I have heard the rival contentions in light of the material produced. I find that it is the contention of the assessee that the DVO has estimated the value by applying CPWD rates. However, the assessee’s claim is that if the State PWD rates are applied, there will be no difference in the valuation as done by the assessee and as computed by the DVO. I find that assessees submission has considerable cogency. On the facts and circumstances of the case the State PWD rates should be applied instead of CPWD rates. Accordingly, I remit this issue raised in all the five appeals to the files of the Assessing Officer. The Assessing Officer shall make a valuation on the basis of the State PWD rates and then compute the valuation.

Needless to add that the assessees should be given adequate opportunity of being heard.

8. In the result, all the five appeals filed by the respective assessees are partly allowed for statistical purposes.

Order pronounced in the open court on 07/9/2012.

SD/-

[SHAMIM YAHYA]

ACCOUNTANT MEMBER

Date 07/9/2012

SRBHATNAGAR

Copy forwarded to: -

1. Appellant

2. Respondent

3. CIT