TaxTMI 
TaxTMI 
2014 (11) TMI 47
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....ed the return of income declaring further investment of Rs. 38.30 lakhs (rounded off) in such house from the undisclosed sources. The issue in these appeals center around the additions made by the Assessing Officer-deleted by the Commissioner of Income-tax (Appeals) and the Tribunal towards undisclosed investment of the assessee for the purchase of land and construction of the house. Since the construction spells over the three assessment years, the cost thereof has been broken down by the Assessing Officer by giving effect in each year separately. During the assessment proceedings, the assessee disputed an additional investment in purchase of land in excess of Rs. 42 lakhs shown in the books. With respect to the cost of construction, the assessee stuck to its return in which the additional cost of Rs. 38.30 lakhs from undisclosed sources was declared. To substantiate this claim, the assessee produced a report from a valuer who estimated the cost of construction ; including furniture and fixtures at Rs. 1.36 crores. The Assessing Officer referred the matter for valuation of land and building to the Departmental Valuation Officer ("DVO" for short). As per the DVO's report, th....
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.... 19.2 Subsequently, the appellant has got the construction of bungalow duly estimated by the private registered valuer. The report of the registered valuer is on record. As per the registered valuer's report, the total estimated cost of construction of the bungalow is Rs. 1,36,00,000. The cost of construction of this bungalow has been shown as per the books of account of the appellant and his wife at Rs. 96,47,566. Thereafter, the appellant has disclosed Rs. 38,30,000 in the return of income for the assessment year 2010-11 on account of undisclosed investment in the construction of bungalow. Thus, as against the disclosure of undisclosed investment of Rs. 1,50,00,000 made during the course of search proceedings as per the statement recorded under section 132(4) of the Act, only Rs. 38,30,000 has been disclosed by the appellant in the return of income. 19.3 For estimating the fair cost of construction, the Assessing Officer has also referred the matter to the DVO under section 142A of the Act. The DVO has estimated the fair cost of construction of the bungalow at Rs. 1,24,2....
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....nbsp; 19.12 In view of the above, I assessment of the considered opinion that no addition is called for on account of the sole reliance on the DVO's report as has been made by the Assessing Officer since the value of the cost of construction as determined by the DVO is almost the same as has been shown by the appellant including the disclosed amount of Rs. 38,30,000. In view of the above, I do not find any reason for addition to be made on account of the DVO's report when there is hardly any difference in the cost of construction as shown by the appellant and the DVO's report. Accordingly, the addition made by the Assessing Officer of Rs. 1,71,344 ; Rs. 11,06,928 and Rs. 14,90,927 for the assessment years 2008-09 ; 2009-10 and 2010-11, respectively, is deleted since there is no justification in making any such addition. This ground of appeal is accordingly allowed for the above years." In so far as addition for purchase of land is concerned, the Commissioner of Income-tax (Appeals) held and observed as under : "21. So far as the addition made for the assessment year 2008-09 on account of undi....
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....he basis of the valuation report made by the DVO. There is not a single stance to show that the appellant had actually incurred the expenditure that was more than that recorded in the books of account. There is no reference to any such evidence found even during the course of search proceedings. 21.5 Considering the entire facts and circumstances of the case, I assessment of the considered opinion that so far as the addition on account of unexplained investment made in the purchase of land on the basis of the valuation report is concerned, no sole reliance on the DVO's report can be made for the purpose of making addition of the entire difference. In view of the above, the addition made by the Assessing Officer as undisclosed investment of Rs. 23,38,200 in purchase of land on the basis of the DVO's report is deleted. This ground of appeal is accordingly allowed." The Revenue challenged the said order of the Commissioner of Incometax (Appeals) before the Tribunal. The Tribunal confirmed the view of Commissioner of Income-tax (Appeals) giving further separate reasons. The Revenue has thereupon filed these appeals. We h....