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TMI Blog2012 (11) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... er balance sheet 1. 58A MCCH society, Panvel 504000 2. Bunglow at Shivaji Nagar 510000 3. Flat No.68, Unit 3, sector 26 CBD 832250 4. Flat No. E/4-1, Sector 1, Vashi 25500 5. House No. 157 at Kalote, Khalapur 56340 6. Open Plot No. 501 149000 7. Plot No. 10, Flat No. 9, 4th floor, Aundh, Pune 491700 8. Plot No. 149, Sector-27, Parsik Hill 3780200 9. Sawali, Flat No.1, Plot No. 228, Panvel 533400 10. Sawali, Flat No.7, Plot No. 228, Panvel 512260 11. Sawali, Flat No.8, Plot No. 228, Panvel 348700 12. Sawali, Flat No.8, Plot No. 228, Panvel 178670 Total 7922020 He noted that the property mentioned at Sl.No. 1, i.e. 58A, MCCH Society, Panvel is the residential address reflected in the return of income filed by the assessee. He therefore treated the same as his self occupied House Property. However, in respect of the other 11 properties the assessee has not offered any income under the head "Income from House Property" which according to him is in violation of the provisions of section 22/23 of the Income Tax act. In view of the above, the AO estimated 10% of the investment in such House Property as the notional income. After deducting 30% towards repairs etc. u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there. He accordingly submitted that the matter may be restored to the file of the AO with a direction to depute Ward Inspector and decide the issue afresh after such report is received. 5.1. The learned DR on the other hand heavily relied on the orders of the CIT(A). 6. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We find the AO in the body of the assessment order has determined the agricultural income at Rs. 75,000/-. Therefore, we find force in the submission of the learned counsel for the assessee that if the house at Village Kalote is used for agricultural activities then no notional rent could be computed. However, this aspect has not been verified by the AO by deputing Ward Inspector or by collecting any other evidence through independent source. We, therefore, deem it proper to restore the issue relating to house property situated at village Kalote to the file of the AO for fresh adjudication. 6.1 So far as the claim of the learned counsel for the assessee that the 4 properties, i.e. 3 flats and one shop at Sawali building at Panvel are being used for asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statement of Sri Paresh Thakur, son of the assessee, who had admitted to have spent Rs. 30 lakhs on construction of the said property. In a letter addressed to the AO, Rs. 36,02,740/- was stated to be the development cost incurred in connection with the said property upto 31-03-09 and it was further submitted that the same was reflected in the books of account. The AO rejected the claim and held that the said expenditure of Rs. 36,02,740/- was not debited to capital account. The AO accordingly treated it as unexplained investment in house construction and added to the returned income u/s.69B of the Act. 11. During the pendency of the appeal proceedings before the learned CIT(A) a copy of valuation report was received by him from the AO and a copy of the same was made available to the assessee for rebuttal. In the said report the DVO had estimated the construction cost at Rs. 78.24 lakhs as against Rs. 41.13 lakhs declared by the assessee as on 31-03-2009 including Rs. 36,02,740/- as additional construction cost admitted. The registered valuer has estimated the cost of construction at Rs. 58.78 lakhs. Subsequently, the AO passed an order u/s.154 wherein he removed the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of construction was determined by him at Rs. 74,94,822/-. After deducting expenditure of Rs. 55,13,172/-, he sustained addition of Rs. 19,84,650/- by enhancing the assessment. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 14. The learned counsel for the assessee reiterated the same submissions as made before the CIT(A). Relying on a number of decisions he submitted that the AO was not justified in referring the matter to the DVO since the books of accounts were not rejected. Further the learned CIT(A) ignored the fact that the DVO submitted report for fully constructed premises whereas as on 31-03-2008 construction work was in progress and as such the report prepared for fully constructed premises cannot be used for assessment under dispute. He also relied on a couple of decisions and submitted that the addition sustained by the CIT(A) is not based on sound legal principles. The learned DR on the other hand heavily relied on the order of the CIT(A). 15. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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