2014 (3) TMI 262

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....in respect of the property at Bhagya Nagar, Kukatpally municipality, Hyderabad, while the assessee wants cost of construction to be adopted at the rate of Rs.250 per sft, revenue, on the other hand seeks restoration of Rs.800 per sft adopted by the Assessing Officer. 3. Briefly stated, the assessee is an individual. For the assessment year, the assessee fled his return of income on 31-7-2007 declaring total income of Rs.70,21,630/-. In addition to agricultural income of Rs.1,50,000/-. During the scrutiny assessment proceedings, the Assessing Officer noted that the assessee has shown rent from five properties, one of them being a property at Bhagyanagar Society, Phase-II, Kukatpally given on lease to M/s Narayana Educational Society for r....

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....before the CIT (A). 5. The CIT (A) considering the fact that neither the assessee nor the Assessing Officer was able to substantiate the cost of construction adopted by them, relied on SRO's estimate and adopted the rate of Rs.400 per sft. The relevant portion from the order of the CIT (A) is extracted hereunder:- "On the cost of construction of the building, the contention of the appellant that the total area as per the lease deed should not have been adopted by the Assessing Officer is not acceptable in view of the fact that it is the actual area which was leased out to the lessee and therefore, the area of 19824 sft., i.e. 40% of assessee's share from the total area of 49560 sft is held to be the total area for the purpose of valua....

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....- per sft including land cost as the rate for construction of the property. Accordingly, the Assessing Officer is directed to adopt the value as given by the SRO at Rs.400/- and calculate the cost of construction." 6. Having heard the contentions of the parties and perused the materials on record, we do not find any infirmity in the order of the CIT (A). Undisputedly, the assessee has not maintained any accounts with regard to cost of construction of the property. He has not been able to establish by bringing evidence on record the cost of construction at Rs.250 adopted by him. Similarly though the Assessing Officer has adopted the cost of construction at Rs.800 by referring to some media advertisement etc., but no cogent material has be....