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TMI Blog2015 (12) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer to adopt the State P.W.D. rates on the ground that the building is located in interior Tamil Nadu? 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the CPWD rates cannot be applied for the building in question when the DVO has clearly elaborated on the reasons for adopting the CPWD rates which is also in consonance with the Board's circular dated 13.12.1998 as against the State PWD rates? 3. Whether in the facts and circumstances of the case, the Tribunal was right in directing the AO to adopt State PWD rates whereas with the details given by the assessee, valuation is possible only as per CPWD rates?" 2. The respondent/assessee is carrying on business manufacturing hosiery garment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. We find merits in the arguments made by the Ld. A.R. The construction of the building is located in the interior Tamilnadu and the rates specified by the PWD would be more appropriate than the rates specified by the CPWD. Therefore, the Ld.DVO ought to have considered the rates prescribed by the PWD while valuing the building constructed by the assessee. Moreover, in many instances various judicial authorities have recommended 5% to 7.5% discounting factor in valuing the building on account of self-supervision and bulk purchase of materials. In the case of the assessee, there is no reason is stated by the Revenue as to why this benefit should be denied. The Revenue has also not brought out any materials on record to establish that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the decision in the case of T.M.P.N.Murugesan -vs- Commissioner of Income-tax reported in 217 Taxmann 40, held as follows: "13. Therefore, it is evident that in a case of this nature, the Department should give credence to the valuation of the State P.W.D. in relation to the value of construction either on the side of the assessee or on the side of the Department. Since we find that there is no specific notification or circular indicating that CPWD rate alone should be adopted in arriving at the cost of construction, the Tribunal is justified in adopting the valuation of the State P.W.D. rates for the purpose of determining the cost of construction. " 7. A perusal of the order of the Commissioner of Income Tax (Appeals) shows that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumed and the accounts thereby incomplete, the Assessing Officer referred the valuation to the Valuation Officer. As is evident from the reading of assessment order, the Departmental Valuation Officer adopted CPWD rates, which were the rates prevalent in Delhi and other cities for working out the cost of construction of the building and the assessee's claim was rejected. 8. We do no find any justifiable ground to adopt the rate prevailing in cities like Delhi for the purpose of working out the cost of construction of house at Virudhunagar. When the details regarding the cost of construction at PWD rates for Virudhunagar District is applicable, there is no reason for the Valuation Officer to adopt the rate, which is prevalent at d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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