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TMI Blog2010 (3) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 ( the Act ) against the common order dated 14.03.2008 as passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('the Tribunal') involving common, similar, and inter-related questions, have been considered together; and are taken up for disposal by this common order. IT Appeal No.13/2010: CIT, Bikaner Vs. Suresh Dudi This appeal relates to the return of income as filed by the assessee Shri Suresh Dudi for the financial year 2003-2004. Briefly put, the relevant aspects of the matter are that the assessee filed the return on 31.08.2004 declaring the income of Rs.17,54,622/- under various heads like salary, interest, business etc. and further declaring agriculture income of Rs.16,77,175/-. While processing the return, the Assessing Officer ('the AO') noticed that the assessee had debited an amount of Rs.18,55,500/- towards construction of a commercial building at Nagaur; and found that the building was in the joint name of the assessee Shri Suresh Dudi with his bother, the other assessee Shri Jagdish Dudi (the respondent in IT Appeal No.74/2009). It was also found that the building in question had already been constructed and let out to M/s. Dunac Motors wherein the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, with reference to the decisions of this Court, that the local PWD rates ought to have been applied for making the estimate of the cost of construction. The learned CIT(A) further found that the matter had been of self-supervision of construction as one of the co-owner of the property namely, the above referred assessee Shri Jagdish Dudi was a qualified engineering graduate who had supervised the construction work. The learned CIT(A) observed that though the DVO had given the benefit of self-supervision at 5% of the total cost of construction but then, the approved valuer had given the benefit of 12% of the total costs towards self-supervision. The learned CIT(A) yet further found that the DVO had made an addition at 3% on account of architect/engineer s fees that was not added by the approved valuer. The learned CIT(A) did not approve of the approach of the learned AO particularly when the report of approved valuer was not even referred nor the assessee was called for examination to verify the aspect of self-supervision and the aspect related with the architect/engineer s fees. The learned CIT(A) found that the estimate arrived at by the approved valuer on the total cost of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional High Court in the case of CIT Vs. Prem Kumari Murdia [2006] 204 CTR [Raj.] 343 has upheld the finding of the Tribunal in which the reduction of 20% from the cost of construction was allowed for the purposes of scaling down the valuation from CPWD to PWD rates. In our considered opinion, there is a justification for allowing 20% deduction on this count. Next claim made by the assessee is the rebate for self supervision charges at 12% cost. We note that this Bench is allowing 10% self supervision rebate in general cases. The ld.A.R. has specifically referred to the Tribunal's order in the case of Ravi Mathur [supra] and contended that 12% rebate was held to be allowable as the assessee in that case was himself a civil engineer. This fact has not been disputed by the ld.D.R. Since Shri Jagdish, another co-owner, and the assessee in the present lot of appeals, is also civil engineer, relying on the judgment in the case of Ravi Mathur [supra], we hold that 12% rebate on account of self supervision charges is eligible. Further, the DVO has added 3% on account of architect/engineer fee separately. When the owner is himself an engineer, there is hardly any need for engaging th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the present case, we are of the considered opinion that it would be just and fair if the agricultural expenses are held at 29% of the total sale proceeds. This ground is, therefore, partly allowed.'' Seeking to assail the order so passed by the Tribunal, it is submitted in this appeal on behalf of the Revenue that the Tribunal has not examined the matter in its entirety and was not justified in holding that the deduction of 35% was allowable from the value estimated by the DVO on the cost of construction. It is further submitted that when the AO had made the addition in the agriculture income on the basis of the letter of Assistant Director of Agriculture whose was an expert opinion in relation to the cultivation of crops; and when the agriculture expenses estimated by AO at 40% to 45% were indeed accepted by the Tribunal in various other cases, modification of such estimate to 29% was not justified. Having given thoughtful consideration to the submissions made and having examined the material placed on record, we are clearly of the view that the grounds urged on behalf of the appellant remain totally bereft of substance; and do not make out any substantial question of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has put this estimate at 29% after taking all the relevant factors into account including the estimate put in relation to the succeeding year.The estimate as made by the Tribunal remains fair and reasonable; and cannot be said to be fanciful or arbitrary or whimsical or violating any statutory requirement. Accordingly, and for the foregoing discussion, we are satisfied that no substantial question of law is involved in this appeal preferred by the Revenue; and the appeal deserves to be dismissed. IT Appeal No.79/2009: CIT, Bikaner Vs. Suresh Dudi This appeal relates to the same assessee Shri Suresh Dudi in relation to the return of income for the financial year 2004-2005. The very same aspects relating to the cost of construction of the same building and estimate on agriculture expenses are involved in this case too; and herein also, the Tribunal has modified the order of CIT(A) while allowing reduction of 35% from the value estimated by DVO in relation to the cost of construction and while putting the agriculture expenses at 29% of the total sale proceeds. For the very same reasons as foregoing, this appeal is also required to be dismissed. IT Appeal No.74/2009: CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs.8,66,772/- as made by the AO. This assessee had further suggested an amount of Rs.2,10,887/- having been paid towards interest to the specified persons but the AO found it to be a rather on the higher side and, with reference to the bank rate of interest, allowed such interest in relation to the specified persons only @ 13.2%. The learned AO thus, made an addition of Rs.25,301/- on this count. However, this addition came to be deleted by the CIT(A) with reference to the account confirmations filed by the assessee. In the appeal preferred by the Revenue in this matter, the Tribunal, again, put the agriculture expenses at 29% for the reasons as discussed in Suresh Dudi's case (supra). In relation to the vehicles, the Tribunal found the AO having proceeded absolutely without any basis and the CIT(A) having rightly appreciated the facts. The Tribunal proceeded to reject the grounds urged by the Revenue with the following observations:- 30. After considering the rival submissions and perusing the relevant material on record, we find that the AO has given absolutely no basis for coming to the conclusion that the afore referred four vehicles were not used for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to the interest paid. In relation to the vehicles, we find nothing of error or illegality in the Tribunal s observations particularly when there was no reason or basis for the AO to come to the conclusion that the aforesaid four vehicles were not at all used for business purpose. The Tribunal yet maintained the order passed by the CIT(A) whereby 20% of the claimed expenses were disallowed on account of likely personal use of vehicles. Taking an overall view of the matter, this ground does not lead to any substantial question of law worth consideration. On the issue related with interest, the submissions as made with reference to Section 40A (2) (b) of the Act are entirely baseless. Merely for there being the specified persons referable to the aforesaid provision, it cannot be said that the rate of interest as stated by the assessee is always required to be reduced. The Tribunal has noted the submissions of the assessee that the interest was paid to the depositors at the rates ranging between 9% to 15%. In the given fact situation, there was no justification with the AO for reducing the rate of interest in relation to the specified persons at 13.2% and making an addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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