2004 (1) TMI 305

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....ted the books of account and as such has acted without jurisdiction in referring the matter to the valuation cell. 3. That the learned AO has no power under the IT Act, 1961 to seek the opinion of the valuation cell to determine the cost of construction of the property. 4. The learned AO has nowhere given his own specific finding regarding valuation of the property but has made the addition simply on the observations made by the Valuation Officer, which is illegal and bad in law. 5. That the complete accounts supported with day-to-day vouchers of expenditure on construction has been maintained and were produced before the learned AO and the Valuation Officer but no cognisance has been taken of the accounts produced. 6. That no o....

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....mercial property was constructed by the assessee jointly with his wife. The total cost of construction spanned over four assessment years, i.e., asst. yr. 2000-01 to asst. yr. 2003-04. The total cost of construction was declared by the assessee at Rs. 23,55,295. The case of the assessee was referred to the valuation cell, where the cost of construction of the property was determined by the Valuation Officer at Rs. 28,39,000. Objections were invited from the assessee regarding this valuation. The objections raised by the assessee were forwarded by the AO to the Valuation Officer. The Valuation Officer revised the cost of construction to Rs. 28,15,200. This cost of construction arrived at by the Valuation Officer was apportioned by the valuat....

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....foresaid decision of the Hon'ble Supreme Court fully covers the case at hand. There, the AO did not reject the books of account of the assessee but made the addition merely by relying on the departmental valuation report, which only gave the estimated cost of construction and not the actual cost of construction incurred by the assessee. In the absence of rejection of books of account, the AO was held not authorised to reject the cost of construction shown by the assessee in his books of account. As such, the addition made by the AO on the basis of the departmental valuation report was deleted. Here also, the position is the same. Admittedly, the books of account of the assessee were not rejected by the AO and the addition was made merely on....