AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 949
X X X X Extracts X X X X
X X X X Extracts X X X X
....hort, "the Act") against the order dated 23.5.2013, Annexure A.3 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, "the Tribunal') in ITA No.446 (Asr)/2012, for the assessment year 2008-09, claiming following substantial questions of law:- i) Whether the Hon'ble ITAT is right in deleting the addition by relying upon the decision of the Hon'ble Supreme Court in the case of Sargam Cinema vs. CIT, (2010) 328 ITR 513 (SC) ignoring the fact that the AO had rejected the books of account of the assessee after referring the case to the DVO for valuation during the course of assessment proceedings for the assessment year 2006-07? ii) Whether the Hon'be ITAT is right in deleting the addition on merits also by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unity to the assessee determined the cost of construction of the hotel building at Rs. 1,03,06,617/- spread over the financial years relevant to assessment years 2006-07, 2007-08 and 2008-09. Copy of the valuation report was made available to the assessee to which he submitted objections which were replied to by the DVO. After giving show cause notice to the assessee and rejecting the books of account under Section 145(3) of the Act, addition of Rs. 10,22,982/- was made by the Assessing officer for the assessment year 2008-09 vide order dated 29.3.2010, Annexure A.1 for the difference between the cost of construction determined by the DVO and that declared by the assessee in his books of account. Aggrieved by the order, the assessee filed a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Act has been incorporated primarily for verification of the value of any investment in respect of cases enumerated therein. The Assessing Officer would not be justified in invoking the aforesaid provision in every case and in a routine manner. Where the assessee maintains regular books of account for the purpose of construction of the asset and produces the vouchers, it would not be appropriate for the Assessing Officer to refer the matter to the DVO without first rejecting the books of account by prima facie concluding that the valuation appears to be more than what has been depicted in the books of account. However, wherever the assessee has not maintained the regular books of account of cost of construction of the asset and claims its ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... alongwith completion certificate issued by the competent authority. The same was furnished by the assessee. On receipt of the valuation report of the approved valuer from the assessee straightway, the AO referred the matter to the DVO for determining the cost of construction of the hotel building. The Departmental Valuation Officer submitted his report vide letter No.181 dated 4.12.2008 determining the cost of construction at Rs. 1,03,06,617/- as against Rs. 34,57,800/- valued by the approved valuer of the assessee. It is also not under dispute that the AO sought instruction from the Addl.CIT and on his instruction only the AO invoked the provisions of section 145(3) of the Act. Keeping in view the direction of the Addl.CIT and keeping in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... open upto fourth floor which was approximately 200 square yards. The contract rate was Rs. 650- per square feet in such type of construction of the assessee. The DVO has considered A class construction whereas the assessee has made C class construction and that too at 238 square yards of land. DVO has given benefit of self supervision of 7.5% where the assessee is eligible to self supervision rebate @ 15% since all the material has been purchased by the assessee. Above all, valuation report of the approved valuer, M/s A-one Consultants was not considered and no defect has been pointed out. The assessee has given the counter comments of the Valuation Officer's report. The assessee has given the affidavit that there existed raw structure at ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on at Rs. 34,57,800/- as against valuation based on Departmental Valuation Officer (DVO) at Rs. 1,03,06,617/-. The assessee had claimed that the DVO had valued the construction at CPWD rates which were 30% higher than the market rate. It was 'C' class construction @ Rs. 650/- per square feet as against evaluated as 'A' class by DVO. The plot of land was 238 square yards. The plinth area rate and duct area was not properly taken into account by the DVO. Further, only 7.5% of the total valuation was allowed for personal supervision as against 15% permissible under law. The benefit of valuation of raw structure existing at the site had not been allowed by the DVO. Learned counsel for the revenue has not been able to show that t....