TaxTMI 
TaxTMI 
2017 (5) TMI 200
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....of assessment u/s 147 is justified. The learned Commissioner of Income-Tax (Appeals) ought to have seen that the cost of construction of the property was already recorded in the books of account and the same was shown in the Balance Sheet annexed to the return of income and the books of account so annexed were not rejected. 3. The learned Commissioner of Income-Tax (Appeals) ought to have seen the fact that no fresh information has come to the knowledge of the Assessing officer and the initiation of proceedings u/s 147 was after a period of four years. 4. The learned Commissioner of Income-Tax (Appeals) erred in holding that the reference to the Valuation Cell for arriving at the cost of construction is justified, particularly when the books of account are not rejected. 5. The learned Commissioner of Income-Tax (Appeals) erred in confirming the estimation of cost of construction when the books of account of the appellant were not rejected. 6. The learned Commissioner of Income-Tax (Appeals) ought to have directed that the valuation should have been made each year separately and the amount incurred during the year is to be compared with the amount so arrived at. 7. Th....
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....ividual and a doctor by profession. She was running a hospital in the name and style of M/s Indira Hospitals. She filed her return of income for the A.Y 2004-05 on 1.11.2004 declaring total income of Rs. 1,48,746 and the same was processed u/s 143(1) of the I.T. Act. There was a survey operation on the premises of the assessee on 21.02.2008 and it was found that the assessee has not admitted and shown the reasonable cost of the construction of hospital building and purchase price of the equipments. The AO, therefore, referred the valuation of the cost of construction of the hospital building to the Valuation Cell during the assessment u/s 143(3) of the Act for the A.Y 2008-09. The Departmental Valuation Officer valued the building cost at Rs. 1,34,46,000. On receipt of the above report and information, the AO reopened the assessment for the A.Ys 2004-05 and 2005-06 by issuance of a notice u/s 148 on 25.3.2011. In response to the notice, the assessee filed a letter stating that the return already filed may be treated as compliance to the notice u/s 148 of the Act. Thereafter, the AO issued a detailed questionnaire to the assessee and the assessee submitted its reply. After consideri....
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....e Act and that the returns were accepted u/s 143(1) of the I.T. Act. He, therefore, held that the proviso to section 147 of the Act is not applicable and upheld the validity of the assessment u/s 147 of the Act. Thereafter, he proceeded to consider the assessee's contentions on merit and confirmed of the additions made by the AO. Aggrieved, the assessee is in second appeal before us. 6. The assessee has raised a ground of appeal against the validity of the assessment and also against the additions made to the returned income. At the time of hearing, the learned Counsel for the assessee has filed before us the copy of the order of the Hon'ble Supreme Court in the case of ACIT vs. Dharia Constructions Co., reported in (2016) 328 ITR 515 (S.C) wherein it was held that the opinion of the District Valuation Officer (DVO) per se is not an information for the purposes of reopening of an assessment u/s 147 of the Act and that the AO has to apply his mind to the information, if any, collected and must form a belief thereon. The learned Counsel for the assessee submitted that in the case before us also, the AO had no other information except the DVO report submitted during the assessm....
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.... been treated as unexplained investment. We have gone through the relevant records as well as the valuation report submitted by the Departmental Valuation Officer. We find that the DVO has valued the property as on 31.3.2008. The DVO has adopted the CPWD rate and not the State PWD rate, and he has adopted plinth area indexation method for valuation of the property. We also find that he has not given any rebate for self supervision, whereas it is the case of the assessee that her husband is an Architect and he himself has supervised the construction of the hospital. We find that for the A.Y 2008-09, the CIT (A) has considered the issue at length and has observed that the State PWD rates are to be considered and also the self supervision rebate is to be given. Since the construction of the building has started in financial year 2003-04 and has been partially completed in the financial year 2007-08, the rates adopted for financial year 2007-08 may be higher than the rates for the A.Ys 2004-05 and 2005-06. We find that the order of the CIT (A) for the A.Y 2008-09 has attained finality as no appeal has been filed by the Revenue. Therefore, we are of the opinion that the AO for the A.Ys ....
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....ined to accept a sum of Rs. 22,200 to be out of internal accruals as the assessee is a medical professional. However, as regards the agricultural income of Rs. 55,000, we confirm the addition as no evidence whatsoever of holding of agricultural land and carrying on of agricultural activities has been filed by the assessee. Therefore, the addition of Rs. 55,000 is confirmed. Similarly, addition of Rs. 1,60,800 is also confirmed as the assessee herself agreed for the addition during the assessment proceedings. Thus, ground of appeal No.13 is partly allowed and ground of appeal No.14 is rejected. 12. As regards Ground No.15 against charging of interest u/s 234A, 234B and 234C of the I.T. Act, we direct the AO to give consequential relief, if any, to the assessee. 13. In the result, assessee's appeal for the A.Y 2004-05 is partly allowed. ITA No.974/Hyd/2016 - A.Y 2005-06 14. For the A.Y 2005-06, we find that the grounds of appeal No. 2 & 3 are against the proceedings u/s 147 of the Act and for the detailed reasons given by us for the A.Y 2004-05, these two grounds are rejected. 15. As regards Grounds of appeal No.4 to 10 against the additions towards unaccounted investm....