2012 (8) TMI 298

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....ng addition of Rs.15,96,780/- made by the A.O. under section 69 of the I.T. Act in respect of alleged unexplained investment on renovation of bungalow." 2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the I.T. Act, 1961 dated 30/12/2008 were that the assessee in individual capacity is in the business of providing diamond labour work. Apart from that, it was noticed by the Assessing Officer that the assessee has constructed a residential building and investment was shown at Rs.33,00,220/-. The Assessing Officer has referred the matter to the DVO. The DVO has arrived at the cost of bungalow at Rs.88,96,000/-. From the said cost, the DVO has reduced a sum of Rs.40 lacs being relative cost of investm....

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.... and, therefore, the payment made to architect itself proved that the cost of construction was true and correct. Ld.AR has pointed out that there were so many defects in the valuation report, even the item-wise description was incorrect. The rates which were applied were exorbitant and the DVO has not given any basis for applying such an exorbitant rates. He has also drawn our attention on the discrepancy in the DVO's report about the area in question and in that context, relevant para is as follows:- "(2) The valuation Officer is also wrong in making the valuation by determining the area of the Bunglow on approximate & tentative basis, the total area of the bunglow is 534.41 sq.mts. as per the drawings of the architect, whereas the valu....

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.... valuation report was vehemently contested by the assessee. The glaring mistake has been pointed out that the DVO has wrongly adopted the area at 673 square meters, however the correct area of construction was 534.41 sq.mtrs. Because of the said difference, the DVO has taken excessive area of 138.59 sq.mts. due to which an over-valuation to the extent of Rs.17,78,000/- was taken by the DVO. An another feature has been pointed out that the DVO had adopted the valuation rate at Rs.7,000/- for basement and Rs.14,000/- for ground, first and second floors. However, the basis for adoption of such rate has not been mentioned by the DVO. From the said Report dated 24.12.2008, it is not clear that how the DVO has adopted the said rate of const....