TaxTMI 
TaxTMI 
2015 (4) TMI 178
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.... driage at 27.2% as against 26.82% of last year, fall in production of rice from 10.87% of last year to 10% and on account of under valuation of closing stock of bardana. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law on facts in reducing the addition of Rs. 81,000/- made u/s 40(a)(ia) for non-deduction of tax at source to Rs. 45,000/- as required u/s 194C of the I.T. Act. 4. That the appellant craves for permission to add, delete or amend the grounds of appeal, before or at the time of hearing of appeal." 2. The relevant facts of the case are that the assessee returned an income of Rs. 2,93,685/- by way of filing return on 30.10.2006 which was subjected to a scrutiny assessment. The facts relatable to the first issue are found discussed at paras 2 to 2.2 at pages 1 to 4 of the assessment order. A perusal of the same shows that the assessee is earning income from running a rice mill. The AO noticed from the details of the fixed assets filed that the assessee had shown increase in building account at Rs. 21,61,172/- as compared to Rs. 17,37,148/- in the preceding year. He further observed that net addition of Rs. 46,54,495/- in machinery a/c....
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....as got it done in his own supervision. Moreover Sir, D.V.O. has made an addition of Rs. 1,63,269/- regarding builders profit. This should have been deducted instead of making addition of it. Further rebate for self supervision & procurement of material is generally allowed at 10% whereas DVO has allowed this at 7.5% only. Moreover Sir, Each and every item of this construction have been shown in the account books including the labour work and the learned D.V.O. could not point out any thing which is lacking and not found in the vouchers and how can be say that the valuation shown by the assessee is not correct and how can he claim that his estimated value is correct. The claim of the assessee is based on the reality whereas the valuation made by the D.V.O. is guesswork and estimation, which can not be taken as gospel truth and hence the difference cannot be added." 2.1. Not convinced with the explanation offered the addition of Rs. 13,88,728/- was made by the AO. 3. In appeal before the CIT(A) summarized the facts as under:- 3. "The facts of the case are that the assessee had shown addition in the building account of Rs. 21,61,172/- during the year and Rs. 17,31,148/- in the pr....
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....ks of accounts have not been rejected, whereas, assessee has maintained complete books of accounts claiming that each voucher of the expenditure has been made. Hon'ble ITAT in the said case has held as follows:- ''Head Note Income from undisclosed sources. Addition under s. 69. Cost of construction. Without pointing out any specific defects in the books of accounts or rejecting them, addition made by AO on account of cost of construction on the basis of report of D VO obtained under an invalid reference was rightly deleted by CIT(A). CIT(A) was justified in observing that higher plinth area was taken by DVO, that PWD rates should have been applied as against CPWD rates and that expenditure should have been spread over the period of construction consisting of more than one year" The case law cited by the assessee as above squarely applies to the case of the assessee because the addition has been made on account of unexplained investment and therefore, naturally u/s 69, though the section has not been specifically mentioned but books of accounts have not been rejected. Even on merit of the case, the assessee has pointed out various mistakes in the report of the DVO an....
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....d cost of construction is unwarranted. The assessee has objected since beginning that the rate applied by the DVO are CPWD rates applicable to the first class godowns, whereas, the construction of the assessee's sheller is not of that quality but the DVO has neither given the detail as to why he applied this rate nor has given the composition of the rate applied by him and therefore, it is not possible for the assessee to further analyze the difference in the estimated cost calculated by the DVO and the expenditure shown by the assessee. The assessee has claimed that the plinth height in the case of the assessee is far less than the standard godowns. It is also claimed that the expenditure required for creating a strong plinth in case of godowns is much more than the case of the assessee, whereas, the DVO has merely claimed that it has taken the height of the plinth as per site but no explanation w.r.t. the quality difference has been given. Further differences on account of provisions for rolling shutter, number of bays, the quality of the rat proof platforms applicable in case of god owns but not in the case of the assessee and other defects like less number of side walls et....
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....ey stand no inference is called for the impugned order. A perusal of the extract of the reasoning with which we are in concurrence shows that no defect in the books of accounts has been pointed out by the department. The fact of assessee incurring expense of Rs. 10,35,797/- during the period 2007-08 & 2008-09 assessment years has not been factored in by the DVO. The finding on record in regard thereto has not been upset by the Revenue in any manner before us. The application of rate by way of applying CPWD rates which are applicable to First class godowns as opposed to the quality of construction supervised by the assessee being entirely different stand unassailed on record. Whereas the specific difference in regard to the quality of construction, number of bays, quality of rate proof platforms etc. which are considered in the case of godowns were found not applicable to the quality of construction of the assessee also remains unassailed. In view thereof we find no good reason in finding of the impugned order while coming to the said conclusion, we find the CIT(A) at page 3 to 6 in the impugned order has extracted the detailed arguments and the comments of the AO which too have bee....
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.... material facts on record in the light of the submissions advanced, we find no good reason to interfere to the order of the CIT(A) where evidently books of accounts had not been rejected and no defect in the books of accounts maintained has been pointed out either by the AO or the Sr. DR in the present proceedings. In the afore-mentioned peculiar facts and circumstances, in the absence of any specific argument in the facts as they stand we dismiss the departmental ground. 11. The facts relatable to the next issue agitated by the Revenue are found discussed at page 5 para 5 of the assessment order and for ready-reference the same is reproduced hereunder:- 5. "In the P&L A/c, the assessee has claimed freight expenses at Rs. 11,62,940/-. The details of these expenses have been obtained. These expenses include an expenditure of Rs. 45,000/- paid in cash on 20.02.2006 on account of freight charges of boiler from Bombay to Karnal and Rs. 36,000/- paid in cash on 31.03.2006 on account of freight charges of machinery from Delhi to Karnal. Vide order sheet entry dated 16.10.2008, the assessee was required the reason for not deducting TDS on payments exceeding Rs. 20,000/- on account of fr....