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TMI Blog2004 (7) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... eleting the addition being difference in house construction; 3. deleting the addition being addition in business income; 4. not recording finding on the application of provisions of s. 115 whereas the AO had recorded categorical finding after pinpointing specific defects; and 5. deleting the addition made on account of household expenses. 2. Ground Nos. 1 and 2 : The facts in brief are that the assessee, an individual, derived income from goldsmith business. The additions of Rs. 37,091, Rs. 90,952 and Rs. 57,576 on account of house property construction in the asst. yrs. 1994-95, 1995-96 and 1996-97, respectively, totalling Rs. 1,45,619 were made by the AO, which have been deleted by the learned CIT(A), against which the Revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stimate basis. The total cost determined is Rs. 13,94,902 for the construction area. It was further submitted that the basic difference is on account of basic cost which has been determined by the DVO on the basis of index and reproduce production cost basis. The area is 3,917 sq. ft. The basic cost is taken at Rs. 10,80,609 against which the AO has taken Rs. 8,61,027. The difference here is Rs. 2,19,582 which is about 20 per cent of the cost determined by the DVO. The rates adopted by the DVO are based on CPWD rates and Delhi index. It was also pointed out that Ujjain being a mufassil area where the popular is around 3 to 4 lakhs, PWD rates should have been applied. The PWD rates are always 25 per cent less than CPWD rates. So far as the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and examined the details on record, and also perused the decisions cited by the appellant s counsel. I, firstly, find that the valuation of cost of construction is not a foolproof technique and where different methods of valuation are there, the method which is more appropriate and beneficial to the assessee is to be adopted. Secondly, I find that when proper books are maintained by the appellant and expenditures are supported by vouchers, addition to income cannot be made on the basis of valuation report, without rejecting the accounts. Further, I find that as regards the major area of difference, i.e., basic cost of construction of basement, ground floor and first floor, the rates applied by the DVO are as per CBDT circular and on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. 5. Ground No. 3 : The AO has made additions of Rs. 20,000 in the asst. yr. 1994-95, Rs. 25,000 in the asst. yr. 1995-96 and Rs. 30,000 in the asst. yr. 1996-97 towards business income which have been deleted by the learned CIT(A) against which the Revenue is in appeal before us. 6. In support of this ground, the learned Departmental Representative submits that labour register produced before the AO was written in one day and, therefore, the same was not reliable and in this register the assessee has mentioned only the names of persons without addresses who had ordered for making of ornaments. Hence, it was also not verifiable. In these circumstances, the AO has invoked the provisions of s. 145 of the Act and has made the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ground does not require separate adjudication. 9. Ground No. 5 : The AO made the additions of Rs. 17,802 in the asst. yr. 1994-95, Rs. 23,527 in the asst. yr. 1995-96 and Rs. 22,369 in the asst. yr. 1996-97 on account of household expenses. The learned Departmental Representative justifies the assessment order whereas the first appellate order has been relied on by the learned Authorised Representative with the submission that the assessee, his brother, father and wife are all income-tax assessees and have been filing IT returns. During these years withdrawals made by Lalchand, father of the assessee, both the brothers and their family members for household expenses were at Rs. 82,410 in the asst. yr. 1994-95, Rs. 92,871 in the asst. y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of their respective cases. 14. We have considered the arguments advanced by the parties in view of the material available on record. We find that in these years the additions on account of house construction have been made by the AO at Rs. 54,654 in the asst. yr. 1994-95, Rs. 79,129 in the asst. yr. 1995-96 and Rs. 53,749 in the asst. yr. 1996-97. The same have been deleted by the learned CIT(A) on the basis mentioned hereinabove in the aforesaid appeals. We do not find reason to interfere with the first appellate order as the additions made in this regard in these years have rightly been deleted by the learned CIT(A) after considering the objections raised by the assessee. Ground Nos. 1 and 2 are thus rejected. 15. So far as the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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