TaxTMI 
TaxTMI 
2014 (11) TMI 402
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.... consolidated order. We, however, prefer to adjudicate them one after the other. 2. This is an appeal by the Revenue, in which the order of the ld. CIT(A) is assailed, inter alia, on various grounds, which are as under:- 1. that the Id. CIT(A)- II, Lucknow has erred on facts and circumstances of the case and in law by deleting the addition of Rs. 38,60,412/- made by the A.O., on account of unexplained investment made from undisclosed/out of books income/receipts. 2. that Id. CIT(A)-II, Lucknow has erred on facts and circumstances of the case and in law in by observing that UPPWD rates has to be applied and by not appreciating the fact that the DVO in his report dated : 16.11.2011 has mentioned that PWD plinth area rates are not acc....
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....red in confirming the addition of Rs. 78,200/-. During the course of hearing, the ld. counsel for the assessee has also moved an application under section 253 of the Income-tax Act, 1961 (hereinafter called in short "the Act") read with rule 11 of the ITAT rules raising the additional grounds in the cross objection, which are as under:- (i) Because on the Facts and in the Circumstances of the case, the Ld. CIT(A) confirmed the action of the Assessing Officer who has made a reference to DVO, without lawfully rejecting the books of account of the assessee and has even computed the total income of the assessee, basing reliance on the book results, as is evident from the computation of income by the same. (ii) Because on the Facts and in ....
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.... due course. Thereafter, the hearing was fixed for 30.8.2011 on which date the Assessing Officer has issued notice under section 142(1) of the Act fixing the date for compliance on 14.9.2011. In the light of these facts, our attention was invited to the valuation report submitted by the DVO, wherefrom it is evident that the reference was made to the DVO by the Assessing Officer vide his letter dated 28.12.2010 and the valuation was conducted by the DVO on 24.2.2011. Therefore, the reference was made to the DVO even without calling the assessee to produce the books of account. In the light of these facts, it was strongly contended by the ld. counsel for the assessee that since the reference was made to the DVO without rejecting the books of ....
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....al matrix were confronted to the ld. D.R. and he has no answer as to why reference was made to the DVO even before issuing notice under section 142(1)of the Act. The photocopy of the order sheets are obtained and kept in record. The original assessment record was returned to the ld. D.R. 7. Having carefully examined the proceedings recorded by the Assessing Officer and the manner in which reference was made to the DVO for determining the cost of investment made in construction of property, we are of the view that the Assessing Officer has made reference to the DVO even before issuing a notice under section 142(1) of the Act through which queries with regard to the investment in the property could have been raised and what to say about re....
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....not be used as a piece of evidence for estimating the cost of construction in the immovable property. Therefore, the addition made by the Assessing Officer under section 69 of the Act for unexplained investment in the property deserves to be deleted and we accordingly find ourselves in agreement with the order of the ld. CIT(A), who has rightly deleted the addition. 9. The other ground in the Revenue's appeal is with regard to deletion of addition of Rs. 3.40 lakhs made by the Assessing Officer and estimated the net profit rate at 10% on the receipts of the hospital. 10. In this regard, we have noticed that the Assessing Officer has estimated the profit of business at 10% of the total receipt of Rs. 97,25,962/- without pointing out an....
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....on loans taken for acquisition of fixed assets and depreciation claimed on additions on fixed assets. The expenditure on these two accounts has increased from Rs. 19,02,648/- in the preceding year to Rs. 35,76,668/- in the year under consideration. The fall in profit rate is therefore adequately explained. In any case the fall in profit rate could not be a sufficient ground to estimate the profit at a higher rate. In view of above, the addition of Rs. 3,40,932/- made by the Assessing Officer is deleted giving relief to the appellant." 11. During the course of hearing of the appeal, the ld. D.R. could not point out any specific defect in the order of the ld. CIT(A). He has simply placed reliance upon the assessment order; whereas the ld. ....