TaxTMI 
TaxTMI 
2012 (12) TMI 205
X X X X Extracts X X X X
X X X X Extracts X X X X
....will be at liberty to make additions as required when the project is found to be complete or in the year when substantially the project has been completed." The remark is unwarranted since the addition can not be made in the year of completion or in the year in which work is substantially completed. Therefore the said remark be deleted. 2.1. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) dated 30/03/2006 are that the assessee-firm is a civil contractor. For the year under consideration, return was filed declaring an income of Rs.6,960/-. It has been noted by the AO that the said return was filed showing profit @ 8% of the gross receipts of Rs.8,70,000/- as prescribed u/s.44AD of the Act. On the amount of 8% profit of Rs.69,600/- the assessee had claimed a deduction of interest payment of Rs.62,640/- and the balance was offered as per the return. It has also been observed by the AO that since the income was shown by applying the provisions of section 44AD of the Act, therefore admittedly the assessee had not maintained the books of accounts. The assessee was asked to furnish the master plan of the commercial complex. As per AO, the cost ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ayable Rs.2,96,690 Tax is below Rs.3,00,000 Instruction No.3 of 2011 dated 09-02-2011 [ITO 4(4), Indore V/s.Harish Kumar Bhatia Prop.M/s.Popular Bred & Food Products, Indore - ITA No.502/Ind/2010 - A.Y. 2007-08. Order dated 28-07-2011. It has held that Instruction No.3 of 2011 dated 09-02-2011 is retrospective in nature and therefore is applicable to pending appeals. The copy of Order is enclosed." 4. The ld.AR has also placed on record an order of ITAT Indore Bench in the case of ITO vs. Shri Harishkumar Bhatia (ITA No.502/Ind/2010 - A.Y. 2007-08) order dated 28/07/2011. 5. We have heard both the sides. As far as the computation of tax involved in the said appeal of the Revenue is concerned, nothing much was controverted by ld.Sr.DR Mr.Samir Tekriwal, however, he has contested that for the year under consideration when this appeal has admittedly filed on 08/02/2007 and the impugned instruction is stated 9/02/2011, therefore since the tax effect involved is more than Rs.2 lacs, hence this preliminary objection of ld.AR deserves to be rejected. We have examined this aspect in the light of the order of the Respected ITAT Indore Bench, wherein reliance was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rmined by him of the entire complex. Apart from that it is seen that, as the work was being done by the contractor, assessee had entered only those amounts in his books of accounts, bills in respect of which were raised by the contractor. It does not denote the actual work carried out during the relevant period. The DVO has spread over the cost of construction worked out by him in various years in the ratio of amount of cost of construction shown in the books of the assessee. Thus, year-wise break-up does not indicate the correct amount of cost of construction of respective years. Apart from that it is seen that no comments has been offered by the DVO or the Assessing Officer about the fact that the rates of Gujarat Government for the relevant period were lower which is evident from the papers filed by the assessee in respect of projects of Police House Corporates, APMC, Mamlatdar office, Vadali etc. which was awarded by Gujarat Government at a much lesser rate than what has been adopted by the DVO. However, I find that assessee has clearly indicated and during the course of hearing of appeal, the ld. A.R said that their basic objection is that yearwise cost of construction cannot ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee has raised the preliminary objection of the tax effect involved and submitted the following computation:- "Computation of Tax Payable "Computation of Tax Payable Addition Rs.3,33,850 Tax payable @ 30% Rs.1,00,155 Surcharge @ 10% Rs. 10,015 Total Tax Payable Rs.1,10,170 Tax is below Rs.2,00,000 Instruction No.5 of 2008 dated 15-05-2008 [217 CTR 1 (Stat)]." 10. We are not in agreement with the above calculation of the assessee, because the relief granted by the ld.CIT(A) is to the extent of Rs.7,93,364/- which has actually been challenged by the Revenue Department. However, this preliminary legal objection of the assessee is hereby over-ruled in the light of the reasoning assigned hereinabove paras. As far as the merits of the Revenue's grounds are concerned, the same shall be dealt with hereinbelow while deciding the appeal of the assessee. [D] Assessee's Appeal 11. For A.Y. 2004-05, assessee has preferred an appeal against the order of the CIT(A)-X Ahmedabad order dated 18/05/2009 and raised the following substantive grounds:- 1. The reassessment is invalid and bad in law since the assessment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee from various infirmities on account of the fact that he carried out the valuation of the property much after the date of the completion besides when it was occupied by the tenants. The allegation of the appellant that the valuation carried out by the DVO includes the investment made by the tenants has not been repelled completely by the A.O. There is no evidence on record to show that the appellant had engaged the services of an Architect, however, the DVO has included 3% of amount of investment for such services while working out the valuation of the property. Further, he has adopted the Delhi CPWD rates for valuation of the investments for the property situated at Himatnagar. The cost of building material and the labour would definitely be lower at Himatnagar in comparison to Delhi. 5.10. I have also gone through the A.O.'s report on the fresh evidences brought on record by the appellant with regard to investments made in the property by the tenants. There is no doubt about the fact that these tenants might have carried out extra work etc. after the possession of the property to suit their business requirements. This work consists of placing false ceiling, wooden partition,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....anding over of the possession and the date of inspection by the DVO were the matter of past and after the lapse of time it was not possible even for the DVO to ascertain that at what stage of construction the property was handed over to those tenants, hence it was impractical to arrive at a fair valuation. A holistic view can also not be affirmed because the Learned CIT(Appeals) has taken a conscious decision in A.Y. 2003-04 that the DVO has wrongly applied CPWD rate for a property situated in a town Himatnagar. The Ld.CIT(A) has held that 70% of the value estimated by the DVO was to be confirmed for A.Y. 2004-05 but this view is not in consistent with the earlier view of the Learned CIT(Appeals). Consistency is a well worth in judicial process. One in respect of that Very Valuation Report a view has been expressed, then it is unfair to be inconsistent with that view. The part relief of the Learned CIT(Appeals) is hereby reversed and direct to delete the addition. Revenue's ground in this regard is dismissed and assessee's grounds are allowed. 15. Through these grounds two legal questions have also been raised and to be addressed as follows:- (i) First, ld.AR contested tha....