TaxTMI 
TaxTMI 
2017 (5) TMI 1600
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....at the assessee has failed to maintain quantitative and qualitative stock registers and vouch the expenses incurred by it and 'on money' received by it has not been disclosed? (2) Whether the Tribunal was justified in rejecting the application of percentage completion method adopted by the AO, when this rejection means acceptance of loss returns of the assessee engaged in construction and sale of residential/commercial projects inh contravention of Accounting Standard- 7 and Accounting Standard-9 issued by ICAI? (3) Whether the Tribunal was justified in ignoring the fact that the two brothers who are partners either themselves or through their families and actively engaged jointly in the business of the sister concerns of the assessee firm and thus acceptance of 'on money' and specific seized documents cannot be ignored for intervention? (4) Whether the Tribunal was justified in not accepting the DVO report which took stamp Duty Authority valuation of land? 4. Counsel for the appellant has contended that the view taken by the tribunal is contrary to law. 5. Counsel for the respondent has pointed out the observations made by the tribunal which reads ....
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....missioner of Income Tax vs. Pratap Singh Amro Singh Rajendera Singh (1993) 200 ITR 788 (Raj. High Court) wherein it has been held as under:- We have considered the matter. In respect of the investment which is made in the property, there can be only two methods to find out the correct position (i) when proper books of account are maintained, and (ii) valuation report. If the assessee has maintained proper books of account and all details are mentioned in such books of account, which are duly supported by vouchers and no defects are pointed out and the books are not rejected, the figures shown therein have to be followed. The valuation report can be taken into consideration only when the books of account are not reliable or are not supported by proper vouchers or the Income Tax Officer is of the opinion that no reliance can be placed on such books of account. It is true that the Income Tax Officer has no option but to rely on the valuation report, which is a document prepared by an expert and is admissible, but there must be a finding by the Income Tax Officer that the books of account maintained by the assessee are defective or are not reliable. There may be a marginal dif....
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.... has observed that the report of the District Valuation Officer cannot be stated to be material found during the course of the search and therefore, addition made on the basis of the District Valuation Officer's report was not permissible. Applying the aforesaid decision of the Division Bench of this Court in the case Kantilal B. Kansara (HUF) (supra) to the facts of the present case, the addition of Rs. 10,23,454/- made by the AO solely based upon the report of the District Valuation Officer, which was collected during the course of the block assessment proceedings, was not permissible u/s 158BC of the Act. Under the circumstances, no error has been committed by the learned Tribunal in directing to delete the aforesaid addition of Rs. 10,23,545/-. 6.3 In Principal Commissioner of Income Tax vs. J. Upendra Construction (P.) Ltd. (2015) 377 ITR 383 (Guj.) wherein it has been held as under:- At the outset, it is required to be noted that in the present case, the Assessing Officer made additions with respect to the difference in the cost of construction based upon and/or relying upon the DVO's report in the case of one M/s. Manjusha Estate Pvt. Ltd. from w....
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....s of the Supreme Court noticed earlier. As such no substantial question of law arises. 6.6 In CIT vs. Smt. Prem Kumari Murdia (2008) 296 ITR 508 (Raj.) wherein it has been held as under:- In the case of the respondent-assessee, the AO had made additions as income from undisclosed sources for asst, yr. 1995-96, on the basis of difference in the cost declared by the assessee and cost determined by DVO on CPWD rates. On appeal, the CIT(A) has held that in the facts of the case, the appropriate rate to be taken into consideration would have been PWD rates. Keeping in view the aforesaid, a deduction of 20 per cent was allowed from the cost of construction estimated by the Valuation Officer in order to arrive at a reasonable estimate of cost of construction for the relevant assessment year and sustained the balance of addition on that basis. On further appeal, the Tribunal by order under appeal has upheld the order of the CIT(A) by following a Bench decision of this Court in CIT v. Dinesh Talwar MANU/RH/0743/2002, the facts of which case were almost the similar. We are also of the opinion that what shall be taken to be cost of construction of a property constructed i....