1981 (11) TMI 2

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....sclosed the expenses of construction at Rs. 4,41,284. The ITO obtained an independent estimate of the construction cost of the theatre from his Departmental Valuer. That estimate put the figure at Rs. 5,67,300. Relying on the valuer's estimate, the officer held that the theatre must have cost more to build than was shown in the accounts. He further held that the expenses not shown in the accounts must have come out of some source of income not disclosed by the assessee to the Department. On the same basis, the IAC later imposed a penalty on the assessee under s. 271(1)(c), holding that there was concealment of income on the assessee's part to the extent that the expenses in its construction account fell short of the figure of cost as estima....

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....of the theatre was at Rs. 2,64,557. There was another estimate by an approved valuer which put the cost at Rs.3,10,541 , As earlier mentioned, the Departmental Valuer put the figure at Rs. 5,67,300. As if these, were not enough, the ITO himself put his valuation at Rs. 5,55,580. In this welter of estimates, there is no scope whatever for drawing the inference that the assessee's book figure of cost at Rs. 4,41,280 was not only an understatement but it involved an actual concealment of income. There is no evidence in this case to show that the assessee had understated the construction expenses in its accounts. The only basis for the addition in the assessment as well as for the levy of penalty is that furnished by the Department Valuer's es....