TaxTMI 
TaxTMI 
2016 (3) TMI 1060
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....ng the total income at Rs. 18,59,45,860/- after making various additions of Rs. 68,73,054/- and Rs. 1,09,25,288/- on account of income from undisclosed sources. The case of the assessee company for valuation of factory building in respect of (i) Sponge Iron Division, Champa, (ii) Induction Furnace Division, Champa, (iii) Rolling Mill Division was referred to the District Valuation Officer (DVO), Income tax Department, Bhopal, (Land & Building). During the year the assessee company had shown the amounts of additions as under:- i) Sponge Iron Division, Champa Rs. 12,95,399/- ii) Induction furnace Division, Champa Rs. 48,78,246/- iii) Rolling Mill Division Rs. 74,34,201/- Total Rs. 1,36,07,846/- &n....
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....owing observations:- "The issue involved and the submissions made by the appellant have been considered. The Assessing Officer has referred the objections raised by the appellant on the valuation report, to the Valuation Officer who has considered the same and has not found the same as acceptable. The aforesaid facts have been noted by the Assessing Officer in para 16B of the assessment order. However, the appellant has raised an alternative plea also before the undersigned that it be allowed depreciation on the addition made by the Assessing Officer in its assets i.e. factory building. The alternative plea is accepted and the Assessing Officer is directed to allow depreciation on the amounts added on account of unexplained investm....
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....sed on the report of the Valuer was insufficient for recording a finding of concealment of income/furnishing inaccurate particulars of income. The Ld. CIT (A) deleted the entire penalty and now the Department is in appeal before us. 7. The Ld. DR relied on the order of the AO and submitted that on the facts of the case as well as the legal position, the penalty was rightly imposed and as such, the order of the Ld. CIT (A) should be reversed. 8. The Ld. AR submitted that there was no material with the Assessing Officer to conclude that cost of construction shown by the assessee was not correct. He submitted that other than the DVO's report, there was nothing on record to hold that any undisclosed investment was made in cost of construc....
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....ubmitted that the DVO applied the CPWD rates, which were on the higher side and were generally applied to construction of Government of India and other Public Sector Organizations. Further, the CPWD rates were applied in respect of purchase of building material such as, steel, cement, bricks, sand concrete etc. whereas, the assessee had purchased the building material at highly competitive rates. Further, the assessee had purchased cement and steel in bulk directly from the manufacturing against ST forms, which in fact was completely overlooked by the DVO. As the Raipur area of Chhattisgarh is the hub of steel and cement industries and the assessee has purchased the cement and steel directly from the manufacturers in bulk quantities at very....
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....l submissions and perused the material on record. It is undisputed fact that the penalty has been imposed entirely on the basis of difference in value of the fixed assets as per the books of account of the assessee and the valuation arrived at by the DVO. It is also an undisputed fact that apart from the DVO's report, the AO had no other independent evidence to counter the figures from the assessee's books of account. It is also seen that while dealing with the assessee's objections on the DVO's report, the AO has relied only on the comments of the DVO in response to the assessee's objections but has failed to give a final finding on the issue. Thus he has not dealt with the assessee's objections properly. This might have served the Revenue....