TaxTMI 
TaxTMI 
TaxTMI 
2010 (6) TMI 791
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....f the squarely applicable decisions quoted by the assessee, no addition is justifiable. 3. The relevant facts, as noted by the AO, are as under : "2. The assessee produced books of account like cash book, ledger, genera] fees receipt registers and other relevant documents/papers for my examination and necessary verification. The assessee is an orthopaedic surgeon doing private practice for last 8-9 years . During the course of scrutiny of the case it came to knowledge that the assessee has made a huge investment in the construction of a nursing home known as 'Jagat Hospital'; looking to the volume of the investment the matter was referred to the Valuation Cell, Allahabad, for proper valuation of the property. The DVO vide his report dt. 15th March, 2007 has estimated the cost of the investment made in the construction of the property under reference at ₹ 80,31,500 against the total cost of investment disclosed by the assessee at ₹ 41,84,472 with the following year-wise break-up of the investment : Sl. No. Financial year Declared investment in construction Estimated cost of investment by DVO 1. 2003-04 ₹ 20,784 ₹ 39,891 2. 2004-05 &....
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...., labour and wooden work etc. The assessee also filed the details of the loan taken from different banks for construction of the property, copy of the bank statement, all these papers kept on records. Although the assessee has tried to establish the investment made in the construction of the property to be genuine he has tried to establish the investment made in the construction of the property to be genuine to the extent he has declared. In support he has filed a lot of photocopies of the ledger relating to the expenses under different heads, even then their genuineness cannot be ascertained in toto because complete and full vouchers and bills have not been filed. Merely filing the details of the expenses does not mean that the expenses are genuine. In absence of the complete bills and vouchers, the expenses are not verifiable hence, the submission of the assessee that the investment shown by him should be accepted is not liable to be entertained. Keeping in view all the facts and circumstances of the case as mentioned above. I have got therefore no other alternative except to base upon the valuation report of the DVO which is based upon the facts and figures of the case and it is....
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....a, learned counsel for the assessee submitted that the report of the DVO relied upon by the AO is not correct and reliable and the expenditure shown in the construction as per the books of account is liable to be accepted. For this purpose, Shri M.P. Mishra, learned counsel for the assessee relied on the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Meerut Cement Co. (P) Ltd. [2006] 202 CTR (All) 506 6. Shri Neel Jain, learned Departmental Representative relied on the order of the AO. He further relied on the judgment of the Hon'ble Uttarakhand High Court in the case of CIT v. Bhawani Shankar Vyas [2009] 311 ITR 8 (Uttarakhand) wherein it has been held that s. 142A was inserted in the IT Act, 1961 by the Finance Act, 2004 with retrospective effect from 15th Nov., 1972. Under s. 142A of the Act, full powers have been given to the AO to call for a report from the Valuation Officer. He, therefore, submitted that the AO has correctly relied on the report of the DVO in making the addition of ₹ 15,50,555 and therefore, the same may be upheld. 7. We have given careful consideration to the rival submissions. There is no dispute that under s. 142A o....
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.... per the books of account is liable to be accepted." 8. In view of the above, we are of the considered view that there was no justification in making the addition. In the instant case, the AO has made the addition merely on the basis of report of the DVO. As per the ratio laid down by the Hon'ble jurisdictional High Court in the case of Meerut Cement Co. (P) Ltd. (supra), it is always open to the assessee to challenge the correctness of valuation report and in case he establishes that such report is not correct and reliable, expenditure shown in the construction as per the books of account is liable to be accepted. In the instant case, it is admitted position that the assessee has maintained and produced books of account like cash book, ledger, general fees receipt registers and other relevant documents/papers before the AO. Vide para 6 of the order, the AO has admitted that the assessee had filed copies of ledger, bills and vouchers relating to expenses of the property. The assessee has also filed details of investment under different heads, such as Sariya, Maurang, Gitti, labour and wooden work etc. In our view the AO has ignored the books of account regularly maintaine....
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....nd Nos. 1, 2 and 3 of the appeal being of academic interest only. 9.1 Ground No. 4 relates to disallowances of expenses. This ground was not pressed before us and hence same is dismissed. 10. Now we will take up ITA No. 193/Luck/2010 relating to the asst. yr. 2005-06. The ground No. 2 of the appeal is similar to that of ground No. 2 of ITA No. 192/Luck/2010, the only difference is regarding the amount of addition sustained by the learned CIT(A). The addition sustained by the learned CIT(A) is ₹ 2,97,704. 11. The facts of the present year are similar to that of asst. yr. 2006-07 and therefore, the findings given in ITA No. 192/Luck/2010 shall apply to this ground of appeal also with equal force. As regards ground Nos. 1, 3 and 4 also, the findings given in ITA No. 192/Luck/2010 (supra) shall apply to these grounds of appeal with equal force. 12. In ITA Nos. 245 and 246/Luck/2010, the Revenue has taken the following grounds : Grounds taken in ITA No. 245/Luck/2010; asst. yr. 2005-06 "1. The learned CIT(A) has erred in law and on the facts of the case in accepting the assessee's submission regarding discrepancies in the report of the DVO in respect of valuation o....