TaxTMI 
TaxTMI 
2020 (5) TMI 647
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....76/, has wrongly concluded that reference to Valuation Officer was made u/s 142A was in order. 4. That the learned CIT(A) has wrongly confirmed initiation of penalty proceedings u/s 271 (1 )(b) without appreciating written submissions made. 5. That the learned CIT(A) has wrongly confirmed action of ITO in adopting status of assessee firm as AOP without appreciating written submissions made in this regard. 6. That the learned CIT(A) has wrongly confirmed action of ITO in framing assessment u/s 144 in place of section 143(3) simply on the ground of non-production of account books without appreciating assessee's written submissions made. 7. That the learned CIT(A) has wrongly confirmed addition of Rs. 942000/-on account of Room Rent without appreciating written submissions made. 8. That the learned CIT(A) has wrongly confirmed addition of Rs. 159339/- on account of Restaurant sale without appreciating written submissions made The Learned CIT(A) has wrongly ignored submission that AO has added / Sales instead of Profit on Sales while making addition under head Restaurant Sales. 9. That the learned CIT(A) has wrongly dismissed ou....
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....r of the Assessing Officer, the assessee preferred appeal before the CIT(A) but remained unsuccessful on this issue, hence, the assessee has come in appeal before us. 5. We have heard the rival contentions of the Ld. Authorized Representatives of both the parties and have also gone through the record. As per the facts of the case, the assessee earlier on 4.10.2005 had taken the hotel on lease for 99 years for a lease consideration of Rs. 30 lacs paid by way of six demand drafts of Rs. 5 lacs each. Subsequently, the said 99 years lease was converted to a sale deed on 31.8.2006 for a total consideration of Rs. 29.75 lacs. The Assessing Officer referred the matter for valuation to the Govt. Valuer invoking the provisions of section 142A of the Act. On the basis of the report of the valuer, the Assessing Officer ascertained the value of the hotel land and building and added the difference between the price as shown by the assessee to have paid for purchase of the property and Fair Market Value determined by the valuer. At the outset, Ld. Counsel for the assessee has invited our attention to the copy of the report of the Government Valuer placed at page 59 of the paper book, wh....
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....ning the value of the property has relied upon the report of the registered valuer for the purpose of payment of stamp duty. The assessee submitted before the Assessing Officer that in the office of the Registering Authority / Tehsildar the report of the approved valuer was submitted, wherein, the value of the building was mentioned and the stamp duty accordingly accepted by the Assistant Collector. These submissions of the assessee find mention at page 8 of the assessment order. However, the Ld. Assessing Officer totally ignored the above submissions of the assessee. Moreover, the Assessing Officer has held that the value of the property was more than that was depicted in the sale deed but he had not initiated any action for corresponding addition to the income of the seller. Under the circumstances, because of the aforesaid discrepancies and ambiguities in the valuation report, the reliance on the same was wrongly placed by the lower authorities, whereas, the record furnished by the assessee in the office of Tehsildar for determining the value has been disregarded without any reasons. The assessee has submitted that the assessee did not demand the vouchers etc. of the amount i....
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....e customers were found recorded. But no corresponding entries in respect of the rent received from booking of those rooms were found recorded. Sh. Naresh Chandey admitted that almost 1/3rd of the income was not being recorded in the regular books out of the room rent received in off season. The assessee failed to produce the regular books of accounts and other related documents during the course of assessment proceedings, therefore, assessment was framed u/s 144 of the I.T. Act and the rental income of the assessee was determined at Rs. 9,42,000/- after taking into consideration the statement of Sh. Naresh Chandey. Further, during the course of survey operation, it was also noticed that the bills for food items were not being issued to the customers and the receipts from the sale of food items were being kept outside the regular books of accounts. Since, the assessee did not produce any books of accounts alongwith the relevant vouchers and bill books during the course of assessment proceedings, the Assessing Officer estimated the income from the sale of food and other eatables at Rs. 2 lacs u/s 144 of the Income Tax Act, as against the income declared at Rs. 40,661/- by the asse....
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....ed by the Tourism Department, whereas, the plea of the assessee is that the assessee has recorded actual rates. Further, the plea of the assessee is that the average rate of room booking is Rs. 300 per day. The plea of the Ld. Counsel for the assessee is also that even the restaurant bills have been excessively esteemed by the Assessing Officer. However, the Assessing Officer has taken note of the rates fixed by the Tourism Department at Rs. 1,000 /- to Rs. 1,100/- per room, however, giving benefit of doubt to the assessee that sometimes the rooms are booked at a lower rate than the rates fixed by the Tourism Department, the Assessing Officer, therefore, has adopted the average rate of Rs. 600/- per room. We, therefore, do not find any reason to interfere in the above order of the Assessing Officer so far as the estimation of the room rent is concerned. However, the Assessing Officer having estimated the room rent should have given the deduction of the expenditure claimed at Rs. 1,52,626/- on water and electricity charges and Rs. 45,000/- on food material. The Assessing Officer has allowed only Rs. 1 lac against this, which does not seems to be justified. We, therefore, partly allo....
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....account of food and restaurant sale even when the said-imposition of penalty was not warranted. 6. That.on the facts, circumstances and legal position of the case, the impugned penalty order deserves to be quashed since the appellant has not been any specific limb of sec. 271(l)(c ) in the show cause notice, in quantum assessment order and also in the penalty order. 7. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 17. We find that this appeal is time barred by 221 days. However, a separate application for condonation of delay has been filed, wherein, the plea has been taken that the impugned order of the CIT(A) was not served on any authorized person of the assessee and since the assessee did not receive a copy of the order, hence, the assessee was not aware of passing of the order which resulted in the present delay. Keeping in view the submissions which are accompanied by the affidavit of Shri Parmajit Chandey, partner of the assessee firm, the delay in filing the appeal is hereby condoned. 18. A perusal of the order of the CIT(A) reveals that the same is an ex-par....