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TMI Blog2002 (7) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... l Jat vs. Asstt. CIT (ITA Nos. 511/Ju/2000 and 517/Ju/2000 through order dt. 9th May, 2001.) Respectfully following the above decisions of this Bench, we do not admit the additional grounds of appeal. Therefore, these additional grounds are not being decided on merits. 4. Now we shall take up the main appeal. Ground Nos. 1 and 2 are regarding income from tractor. The appellant has shown net income from tractor at Rs. 3,075. The appellant has not maintained details in regard to receipts and expenses of the tractor and, therefore, income from tractor shown at Rs. 3,075 was not accepted as correct by the AO. The AO has estimated income from tractor at Rs. 2,000 per month which was not considered as unreasonable or excessive by the CIT(A). In the circumstances, the addition of Rs. 8,925 made to the income from tractor was confirmed by him. 5. The learned authorised representative contended that the estimation of income at Rs. 2,000 is without any basis. Sec. 44AE of the Act provides for the income on tractor @ Rs. 1,800 per month. The fiction is contained in the statute itself and the same was applicable w.e.f. 1st April, 1994 (asst. yr. 1995-96 i.e., immediately succeeding year) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere test-checked. He also furnished the required details, information/explanation and it was examined. This fact is available in assessment order at page No. 1. Assessee maintained detailed accounts in respect of investment made in construction of house. (2) AO made addition without rejecting the accounts made by the assessee. The AO did not point out even single defect in the accounts maintained by the assessee in respect of construction account. There were defective accounts in respect of tractor income, which AO has specifically pointed out and the assessee has also accepted. However, there is no defect in the construction account and that being the position, the investment in house as reflected in the detailed accounts maintained by the assessee should have been accepted. (3) In the following judgments it has been held that without rejection of books of accounts, no addition can be made on the basis of valuation report: (i) CIT vs. Pratapsingh Amrosingh Rajendra Singh and Deepak Kumar (1993) 200 ITR 788 (Raj); (ii) Decision of Jodhpur Bench in ITO vs. Bharat Motors (ITA No. 2327/Jp/1994; order dt. 11th April, 2000); and (iii) CIT vs. Hotel Joshi (1999) 157 CTR (Raj) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained in the books of accounts produced before the AO, no addition was called for on account of investment in construction of house in view of various judgments cited by him. As regards this contention of the appellant, we find that at p. 3 of his order, the CIT(A) had stated that since the appellant failed to produce the details of construction expenses, the AO was justified in making a reference to the valuation cell for determination of cost of construction of house. In view of this fact, we hold that the AO was justified to make addition on the basis of valuation report. 12. In point No. 5 the learned authorised representative had relied on the judgment of Tribunal, Jaipur Bench, which are relevant. There was no such point in the case of CIT vs. Hotel Joshi. In the case of Mustaq Ahmed vs. Asstt. CIT it was held by the Tribunal, Jaipur Bench, that it is appropriate to allow the assessee s claim in respect of local PWD rates by following the consistence view of the Bench. This Bench has allowed reduction of 15 per cent to 25 per cent on account of difference of valuation in CPWD rates and PWD rates. They had allowed deduction of 20 per cent from the amount of valuation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the CIT(A). 16. The learned authorised representative has contended that during the year under consideration the assessee resided at a small village Gadarmala near Bhilwara. He was having his own agriculture land also and kept buffalo and cows. Therefore, he got edible products, milk, etc. from these sources. He further argued that his sons were having their own source of income. 17. We have considered the rival submissions. We find that at p. 6 of his order the AO had mentioned that the appellant had taken the plea that household expenses were partly met by agricultural income. The AO after seeking the capital account in which the assessee had already credited the agricultural income of Rs. 23,600, found the withdrawal shown by assessee at Rs. 12,300. As such the plea of the assessee that household expenses were met from agricultural income was not accepted. We conclude that the AO had rightly estimated the household expenses @ 1,500 p.m. and the CIT(A) had rightly confirmed the same. Therefore, we decline to interfere with the order of CIT(A). 18. Ground No. 9 is regarding charging of interest under ss. 234A, 234B and 234C. The learned authorised representative contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact of the case at pp. 2 and 3 of the order for this year, the CIT(A) restricted the disallowance of interest to Rs. 72,442 and allowed a relief of Rs. 85,393. 24. For asst. yrs. 1996-97 and 1997-98, the learned authorised representative made the following submissions. 25. For the asst. yr. 1996-97, the learned CIT(A) has given finding that at the most borrowed funds to the extent of Rs. 4,49,540 could be treated to have been utilized for purpose of plots/construction of house. It may be stated here that the amount borrowed (Rs. 38,335) from the creditor i.e., M/s Jai Shiv Company do not carry any interest. Therefore, this amount cannot be said to be utilized for purchasing non-income bearing assets and interest pertaining to the balance amount can only be disallowed. As mentioned in appeal for the asst. yr. 1994-95, the assessee borrowed amount @ 12 per cent p.a. approximately, therefore, the disallowance works out to Rs. 49,344. The balance amount of Rs. 31,573 (forming part of Rs. 80,920) should be allowed. Total relief amount prayed for thus comes to Rs. 62,336 (30,761 + 31,575). 26. For asst. yr. 1997-98 the learned authorised representative submitted that investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the assessee and the Tribunal was right in holding that if the claim for deduction made before the ITO could not be considered by way of deduction from the income from house property but could be considered against the income from other sources, nothing prevented the ITO from considering the claim against the income from other sources, and that it was the duty of the ITO to consider whether the claim for deduction was allowable against any other income. There was a duty on the part of the ITO to consider whether the assessee was entitled to a deduction from the income from other sources, though no such specific claim was made by the assessee. The jurisdiction of the ITO was in accordance with law, because, if in fact and in law, the assessee was entitled to a deduction which would have ultimately affected his or her total income, the assessee could not be assessed on a larger income." 28. The learned authorised representative also relied upon para 12 of CBDT Circular No. 14 (XL-35) 1955 Taxman s Circular Vol. 17, 1997, Item 491, 4th Edition, quoted in the case of Parekh Bros vs. CIT Ors. (1983) 36 CTR (Ker) 372. This portion of the circular reads as under: "Officer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00. The assessee also requested twice to issue summons and examine the creditor. The AO did not pursue the matter in respect of notice under s. 131. The proceeding made by the AO in this regard are clear from the assessment order p. 4 wherein he has mentioned that summons under s. 131 of the Act was issued in the name of this creditor on 24th April, 2000, through registered post but it remained uncomplied with. This fact is incorrect as the assessment order was passed on 16th March, 2000. Therefore, no summons could have been given on 24th April, 2000, that is, after passing the assessment order. Therefore, the assessee has performed his part of onus. However, the AO miserably failed to perform his part and wrongly gave a finding of fact for the purpose of making the addition. 35. We have considered the rival submissions. After having considered the facts of the case, we restore this issue to the file of the AO with the direction that he should again summon the cash creditor under s. 131 and readjudicate on the issue after allowing an opportunity to the appellant. 36. Ground No. 9 is regarding addition for low household expenses. The assessee had declared household expenses at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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