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TMI Blog2010 (3) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... y constructed a factory at 328 Chagodar Industrial Estate, Sanand in Ahmedabad District. The Assessing Officer sought report of the DVO and based on that report dated 25/02/2002 and revised report of DVO dated 31/03/2006 made additions for unexplained investments in this construction as under:- Assessment Year Cost as per Assesse Cost of Construction as per A.O. Assessed Income Amount added for difference in valuation 1997-1998 560470 653014 173500 92544 1998-1999 6883462 7941552 2310510 1058090 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asserted that unlike the Registered Valuer s Report, the Plinth Area Rate (PAR) was adopted as approved by CBDT, was more objective and analytical and based on locally prevailing rate of material/labour and so did not need any revision. The assessee was provided with DVO s report dated 24/08/2005. After considering the comments of the assessee, DVO reinspected the factory on 28/03/2006 and revised his cost and its yearwise distribution. The DVO in his report of 31/03/2006 felt - (a) that, certain items of work such as wire fencing, plaster of paris work has been excluded by the Registered Valuer, (b) that, certain modification are done in rates of different its, (c) that, 5% discount given for self-purchases. 3.2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down his initial estimate of ₹ 1,01,42,764/- to ₹ 89,35,000/- after considering some objections/Registered Valuer s Report, yet be the DVO has not adopted the PAR correctly and has not provided for deduction for own supervision and for self purchases. Before the Learned CIT(Appeals) it was also contended that DVO has overlooked the fact that the Registered Valuer had covered and accounted for all items such as plaster of paris, wire mesh, fence, etc. in the report dated 14/05/2005. The DVO s comments that it was not so, were casual and dismissive and incorrect. It was further contended that there is no evidence of expenditure in excess to what was disclosed was found in search. The Assessing Officer rejected the disclosed cost o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,500/- and ₹ 5,030/- of the DVO. On this basis, it would be appropriate to take PAR at ₹ 4,250/- per sq. metre and to also allow deduction at 10% for self-purchase of cement and steel, instead of 5% deduction allowed by the DVO. This approach is considered to be justified since no defects have been found in the books of account of the assessee and a deliberate understatement of construction expenses would not have upheld the assessee, considering the sale tax exemptions to which it became entitled. By adopting the PAR at ₹ 4,250/- and allowing deduction of 10% (instead of 5% allowed by the DVO) on self-purchase of cement and steel of ₹ 16.11 lakhs, the cost of construction is worked out at ₹ 81,07,776/- inste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned by the DVO for higher valuation such as RCC structure with RCC slabs, etc. 7. The Assessee also filed cross objections and the only common ground raised therein reads as under:- The Ld. CIT(A) has erred in law and/or on facts in confirming the addition(s) of ₹ 26,857/- (For A.Y.1997-98), ₹ 3,30,026/- (For A.Y. 1998-99) ₹ 14,006/- (For A.Y. 1999-2000) being difference between cost of construction as per books of the assessee and cost of construction adopted by the A.O. 8. At the time of hearing before us on behalf of Revenue, Shri C.K. Mishra, Learned Departmental Representative appeared by relying on the reasoning given by the Assessing Officer and contended that the Learned CIT(Appeals) ought to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the assessment, the jurisdiction of Assessing Officer is restricted to look into the value adopted in the assessment order considering the objection of the assessee. Therefore, this plea of the ld. counsel for the assessee is rejected. 12. Coming to the merits of the case, the Learned CIT(Appeals) in the impugned order has analyzed both the valuation report, i.e. Valuation Report to DVO and assessee s Registered Valuer. Each and every objection of the assessee has been dealt with by the Learned CIT(Appeals) in the impugned order. Looking to the peculiar facts, the Learned CIT(Appeals) adopted the average rate of valuation on the basis of report of DVO and Registered Valuer. From the value so arrived, the Learned CIT(Appeals) has also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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