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Issues involved: Appeal against ITAT order regarding deletion of disallowance under Section-69C of the Income Tax Act for cost of construction in relation to three group companies connected with M/s. Ambience Developers and Infrastructure Pvt. Ltd.
Summary: Issue 1: Disallowance under Section-69C of the Income Tax Act The Revenue appealed against the ITAT order deleting the disallowance of cost of construction under Section-69C. The Tribunal upheld the deletion, citing no reason to interfere with the directions. The Court noted similarities with a previous case involving M/s. Ambience Developers and Infrastructure Pvt. Ltd., where a valuer's report showed a 3.86% variation in construction costs. Issue 2: Valuation Officer's Report under Section-142A The Assessing Officer relied on the Valuation Officer's report under Section-142A for the group companies, leading to challenges in the appeals. The Court referenced previous judgments and highlighted that the Assessing Officer could not refer the matter to the Valuation Officer without rejecting the books of accounts. The variations in construction costs were deemed minor and within acceptable limits. Issue 3: Challenge to Addition of Amounts The assessees challenged the addition of amounts to income, arguing that the reference to the Valuation Officer under Section-142A was not in accordance with the law. They also contended that no defects were found in the books of accounts, making the addition unjustified. The Court found the issues raised by the department were covered by previous decisions and dismissed the appeals. Conclusion: The Court found no fault with the Tribunal's reasoning in deleting the disallowance for the three assessees, given the similarities with previous cases and the minor variations in construction costs. The appeals were dismissed in line with a previous judgment, maintaining consistency in the application of the law.
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