2010 (3) TMI 1103

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....9-2000. 2. Briefly stated the facts are that the assessee-company constructed a factory at 328 Chagodar Industrial Estate, Sanand in Ahmedabad District. The Assessing Officer sought report of the DVO and based on that report dated 25/02/2002 and revised report of DVO dated 31/03/2006 made additions for unexplained investments in this construction as under:- Assessment Year Cost as per Assesse Cost of Construction as per A.O. Assessed Income Amount added for difference in valuation 1997-1998 560470 653014 173500 92544 1998-1999 6883462 7941552 2310510 1058090 1999-2000 292854 340834 1648380 47580 Total 7736786 8935000 1198214     3. On appeal agains....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....dated 24/08/2005. After considering the comments of the assessee, DVO reinspected the factory on 28/03/2006 and revised his cost and its yearwise distribution. The DVO in his report of 31/03/2006 felt - (a) that, certain items of work such as wire fencing, plaster of paris work has been excluded by the Registered Valuer, (b) that, certain modification are done in rates of different its, (c) that, 5% discount given for self-purchases. 3.2. The DVO also observed that building was a RCC framed structure with very good specifications and services and not a godown type structure with AC sheet roofing as averred by the Registered Valuer. The revised working was given by the DVO is enclosed by the Assessing Officer as....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....evidence of expenditure in excess to what was disclosed was found in search. The Assessing Officer rejected the disclosed cost of construction in the books of account which were accepted by him is contrary to the judicial decisions reported in 94 TTJ (Ind.) 631 in the case of ITO vs. P.C. Soni and of M/s.Rohtas Prajats Ltd. 104 TTJ (LKN) 339 (TM). 4.1. Before the Learned CIT(Appeals) it was also contended that original bills/vouchers, etc. were maintained and produced before the Assessing Officer. No defect therein was found. Therefore, Assessing Officer ought to have accepted the cost of construction declared in the books of account. 5. After considering the rival submissions, in the impugned order, the Learned CIT(Appeals) observed ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nt and steel of Rs. 16.11 lakhs, the cost of construction is worked out at Rs. 81,07,776/- instead of Rs. 77,36,786/- shown by the assessee, i.e. difference of Rs. 3,70,889/-. This additional cost is attributed year-wise in proportion to the expenditure shown by the assessee, in the following manner:- Period of Construction Cost of Construction as per books of the appellant Cost of Construction as adopted Difference 1997-1998 5,60,470/- 5,87,327/- 26,857/- 1998-1999 68,83,462/- 72,13,488/- 3,30,026/- 1999-2000 2,92,854/- 3,06,860/- 14,006/- • Total 77,36,786/- 81,07,776/- 3,70,889/-   5.1. On the above basis, the Learned CIT(Appeals) restricted the addition to ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....peals) be reversed and addition(s) made by the Assessing Officer in the assessment order(s) be restored. 9. On the other hand, Shri S.N.Divatia, Learned Authorised Representative of the assessee contended that since the Assessing Officer has not rejected the disclosed cost of construction in the books of account, therefore, entire addition(s) be deleted. The ld. counsel for the assessee also contended that it may be held that reference to DVO is bad in law because no reference to DVO can be made unless the books of account wherein assessee has disclosed the cost of construction are rejected. 10. Against this, the Learned Departmental Representative submitted that this plea cannot be taken as no such plea was taken before the Tribunal ....