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TMI Blog2014 (11) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year - To be a necessary finding, it must be directly involved in the disposal of the case - the expression "direction" in s.153(3)(ii) of the Act, it must be an express direction necessary for the disposal of the case before the authority or Court - when assessee himself claims that the construction was spread over to two to three years, the finding of the CIT(A), if any, made for unexplained cost of construction, has to spread over to such years, is nothing but a finding which is necessary for disposal of the case. Applicability of Section 153(3)(ii) - Whether observation of the Tribunal was a direction necessary for disposal of the appeal - CIT(A) held that addition made by the AO was not based on any evidence found during sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely, Door No.87, Mint Street, Chennai - 79. The valuation made by the registered valuer was furnished by the assessee and in the valuation report, the value of the building was shown as ₹ 74.85 lakhs. The details of construction expenses filed by all the assessees gave the figure of ₹ 1,28,92,674/-, which includes the value of the land and incidental expenses. After excluding the value of the land, the cost of construction admitted by the assessee, as worked out by the Assessing Officer, came to ₹ 72,21,622/- against the value of ₹ 74.85 lakhs by the registered valuer. The assessee, Shri.Shivlal was examined, who had stated that no books were maintained for the construction work. 3. The Assessing Officer made a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, which is the main plank of the assessees' case, the issue was whether the cost of construction should be based on CPWD rates or the rates prescribed by the State Public Works Department. The Tribunal accepting the contention of the assessee remanded the matter to the Assessing Officer for re-consideration of this issue as to how the cost of construction should be determined. The Tribunal in paragraph 14 of the order observed as follows: We are, therefore, of the opinion that for determining the cost of construction, the matter requires a re-visit by the Assessing Officer. He has to give cogent reason for arriving at the cost of construction whether based on CPWD rates or State PWD rates, in accordance with law, and also give re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing given in an appeal revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular case assessee and in relation to the particular assessment year. To be a necessary finding, it must be directly involved in the disposal of the case. It is possible in certain cases that in order to render a finding in respect of A, a finding in respect of B may be called for. For instance, where the facts show that the income can be belong either to A or B and no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A's income. A finding respecting B is intimately involved as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the relevance or validity of the point. When assessee himself claims that the construction was spread over to two to three years, in our opinion, the finding of the CIT(Appeals) that addition, if any, made for unexplained cost of construction, has to spread over to such years, is nothing but a finding which is necessary for disposal of the case. It is an issue directly involved in the appeals before him and such directions, in our opinion, were not beyond the powers of CIT(Appeals). 16. As for the decision of Hon'ble Apex Court in the case of Foramer France (supra), relied on by learned A.R., the question there was applicability of Section 153(3)(ii) of the Act and whether observation of the Tribunal was a direction necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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