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2012 (12) TMI 332 - AT - Income TaxCost of construction AO adopted value determined by the Departmental Valuation Officer Tribunal directed AO to apply state PWD rates for the valuation of construction and instead of CPWD rates CIT(A) orders reduction of 15% from cost estimated based on CPWD rates would automatically give a valuation at par with State PWD rates - Held that - Nothing was brought on record by revenue to show that a reduction of 15% on the value based on CPWD rates would give a value at par with State PWD rates. Unless and until this can be demonstrated, we cannot say that the orders of authorities below are in accordance with the directions given by this Tribunal. Nevertheless, we also note that assessee did not give a valuation based on PWD rates before the AO. Therefore, matter has to go back to AO once again for deciding the issue in accordance with directions of the Tribunal. Appeal remand back to AO. Depreciation on motor Car Personal v/s revenue expense - Assessee has purchased a car during the relevant P.Y. - AO stated that the said vehicle was classified under Non-Transport category - Business was carried on in Kumbakonam, whereas, the car was registered in Chennai - Disallowed the claim of depreciation on the car considering it to be personal in nature Held that - The car might have been registered as Non- Transport category vehicle, but, this will not preclude an assessee from using it for the purpose of its business. There is no Rule that every vehicle owned in a business, even if used by employees and executives, also should be registered as Non-Transport category vehicle. Just because the car was registered in Chennai and business of the assessee was in Kumbakonam, would not be a reason to disallow the claim of the assessee. Therefore, its claim that the car was used for the purpose of business could not have been brushed aside. Depreciation allowed. Appeal in favour of assessee Income from house property A.O. had made the addition for rental income based on the report of his Inspector Held that - As such a report was never put to the assessee for her rebuttal. Findings of the AO and assertions of the assessee are at loggerheads. Nothing is available on record to verify which of this is correct. Therefore, issue remand back to AO
Issues Involved:
1. Condonation of delay in filing appeals. 2. Valuation of Kalyana Mandapam for assessment year 1997-98. 3. Disallowance of depreciation on a motor car for assessment year 2004-05. 4. Addition of house property income for assessment year 2007-08. Detailed Analysis: 1. Condonation of Delay in Filing Appeals: The appeals were filed with a delay of 12 days, for which condonation petitions were submitted. The reasons provided in the condonation petitions were found satisfactory, and hence, the delay was condoned, and the appeals were admitted. 2. Valuation of Kalyana Mandapam for Assessment Year 1997-98: The assessee filed a return declaring an income of Rs. 2,70,100/-. The assessment was reopened under Section 147, and the reassessment order added the difference between the cost admitted by the assessee and the value determined by the Departmental Valuation Officer (DVO) to the income. The Tribunal had remitted the issue back to the Assessing Officer (A.O.) with a direction to use State PWD rates for valuation. However, the A.O. persisted with CPWD rates, justifying it with several reasons, including the adaptability and scientific approach of CPWD rates. The CIT(Appeals) reduced the cost by 15% from CPWD rates to align it with State PWD rates. The Tribunal found that the authorities below did not follow its direction and remitted the matter back to the A.O. for compliance with the original direction to use State PWD rates. 3. Disallowance of Depreciation on Motor Car for Assessment Year 2004-05: The assessee, running a Kalyana Mandapam, claimed depreciation on a new car. The A.O. disallowed the claim, considering the car personal in nature since it was registered in Chennai and not used in the business in Kumbakonam. The CIT(Appeals) upheld this view. The Tribunal, however, noted that the vehicle registration as Non-Transport did not preclude its business use. The car was used for business purposes, including being let out to marriage parties, and hire charges were part of business income. The Tribunal deleted the disallowance, allowing the depreciation claim. 4. Addition of House Property Income for Assessment Year 2007-08: The assessee had 25% ownership in a property named "Luz" and did not return any income from it, claiming it was self-occupied. The A.O. added a house property income based on previous rentals, as the assessee had already claimed exemption for another property. The CIT(Appeals) upheld the addition, doubting the self-occupation claim. The Tribunal noted the conflicting claims about the property's status and the reliance on an Inspector's report not shared with the assessee. The matter was remitted back to the A.O. for fresh consideration, allowing the assessee to present her case and review the Inspector's report. Summary of Results: - Appeals for assessment years 1997-98 and 2007-08 are allowed for statistical purposes. - Appeal for assessment year 2004-05 is allowed.
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