2009 (10) TMI 979

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.... and declared a total income of Rs. 33,60,000/-including the deposit of Rs. 1,92,384/- given to Karnataka Power Transmission Co., Ltd., The ITO referred the matter to District Valuation Officer, Hubli who has determined the cost of construction at Rs. 46,33,766/-. Based upon the valuation report, the ITO re-opened the assessment relating to assessment year 2004-05 by issuing notice u/s 148 of the IT Act. After going through the explanation, objections and other documents filed in response to the notices, by the appellant from time to time, the ITO finally concluded the assessment by levying the tax on Rs. 16,35,771/- u/s 69B of the IT Act. 3. Aggrieved by the order, the assessee is in appeal before the first appellate authority. The lear....

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....ethod to value cost when actually prescribed rates for Shimoga region are not available". 4. Further, according to learned AR, the defect in valuation report by DVO as raised before first appellate authority are as under: "i. Local rates are readily available but not accepted by DVO and difference is very huge. ii. Rates adopted are glaringly wrong because ground floor requires foundation and rate is more whereas DVO has adopted same rate for GF and FF. iii. DVO has estimated water supply which is only in second floor and over estimated same. iv. Estimation in respect of staircase has no base and it is over estimation. v. Appellant's husband is a civil contractor and carried out self supervision in respect of purchase of m....

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....Valuation Officer explained the details and also filed an affidavit dated 19-11-2007 deposing that he was personally present before District Valuation Officer Shri Vishwanathan on 15-09-2005 and explained all technical details for estimating cost. The main objection on behalf of the assessee is that the District Valuation Officer has not considered the details readily available alongwith the evidences. The rates adopted by District Valuation Officer are on higher side because ground floor and first floor requires foundation and rate is more whereas the District Valuation Officer has adopted same rate for ground floor and first floor. The District Valuation Officer was not justified in estimating the water supply facility. In respect of stai....

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....,16,015/- which works out to Rs. 1,21,610/- which is on higher side. In respect of second floor , it was found by the CIT(A), that a big difference between value and actual rate as per Shri K. Ananthacharya which is at Rs. 12,22,430/- and value adopted by District Valuation Officer is Rs. 16,99,535/- difference works out to Rs. 4,77,105/-. In respect of supervision charges the District Valuation Officer has allowed 7% and as per the stand of the authorized representative the same was taken at 10% which creates a difference of 3% which works out to Rs. 1,47,994/- on 49,33,223/- as worked out by District Valuation Officer. All these difference works out to Rs. 13,98,296/- and after considering the value declared by the assessee as per books f....