9911796707
|
Home
Issues: Valuation of construction cost for a four-storeyed building
Analysis: The case involved the construction of a four-storeyed building over four years, with the total investment reported by the assessee at Rs. 89,000. The Income Tax Officer (ITO) estimated the cost of construction at Rs. 2,07,850, leading to an addition in the reported cost over the four years. Upon appeal, the Appellate Assistant Commissioner (AAC) found the ITO's estimation lacking in basis and accepted the valuation provided by a registered valuer, adding Rs. 1,083 to the reported cost. The Revenue appealed this decision. During the proceedings, the Departmental Representative argued in favor of the ITO's estimate, citing support from a valuation report used in wealth-tax assessments. The assessee's counsel contended that the Departmental Valuer's report was not presented to the assessee and that the valuation for wealth-tax purposes should not dictate the cost of construction. The Tribunal found the ITO's estimate unsupported by evidence and rejected the Departmental Valuation report as it was not referenced in the assessment order. The valuation by the approved valuer was also deemed low, with the Tribunal estimating the construction cost at Rs. 30 per sq. ft., resulting in an addition of Rs. 8,000 per year over the four years as unexplained investment. Consequently, the Tribunal partially allowed the Departmental appeals, directing the ITO to add Rs. 8,000 in each of the four years as unexplained investment in the building construction, modifying the AAC's order accordingly.
|
