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TMI Blog2012 (10) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case in brief are that the assessee made construction at its factory building at B-4C, Bassni Ist Phase in a phased manner right from Financial Year 1994-95 to 2006-07. The cost of construction in Financial Year 2006-07 declared in books was ₹ 25,56,339/-.The Assessing Officer referred this property to the DVO for determination of cost of construction and the DVO worked out the cost of construction at ₹ 48.60 lacs. The difference for the year under consideration was worked out at ₹ 1,00,931/-. The Assessing Officer treated this amount as undisclosed investment in the construction and made addition for the same. 2.3 The assessee carried the matter to the ld. CIT(A) and submitted that for making any addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther observed that Hon'ble Rajasthan High Court has accepted the difference between the CPWD rates and PWD rates at 20% in the following cases. 1. CIT vs Prem Kumari Mundra vs CIT, 296 ITR 508 (Raj.) 2. CIT vs Dinesh Talwar, 265 ITR 344 (Raj.) The ld. CIT(A) also observed that deduction given for self supervision @ 2.5% was on lower side. He considered it reasonable if the deduction of 7.5% was allowed for self-supervision. The ld. CIT(A) determined the valuation after making the aforesaid adjustment in following manner. Particulars Amount in Rupees Valuation made by the DVO on CPWD rates (without deduction of self supervision 41,36,702/- Less: deduction for Rajasthan PWD rates (20%) 8,27,340/- 33,09,362/- Add: Addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of accounts maintained by the assessee for the expenses incurred had not been rejected and it is not the case of the Department that the assessee had not maintained proper bills and vouchers regarding cost of construction. In a similar issue, the Hon'ble Supreme Court in the case of Sargam, Cinema vs CIT (2010) 328 ITR 513 held as under:- ''In the present case, we find that the Tribunal decided the matter rightly in favour of the assessee inasmuch as the Tribunal came to the conclusion that the assessing authority could not have referred the matter to the Departmental Valuation Officer (DVO) without the books of account being rejected. In the present case, a categorical finding is recorded by the Tribunal that the books were never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank account except bank interest and similarly in respect of Shri Khiya Ram, the Assessing Officer observed that the bank account was opened on 22-07-2004 and ₹ 45,000/- each were deposited on 18-08-2004 and 19-08-2004. Again, cash amounting to ₹ 40,000/- and ₹ 45,000/- was deposited on 21-08-2004 and 23-08-2004 respectively. Thereafter a cheque of ₹ 1.75 lacs was issued to the assessee in Vraj Tractor Industries on 27-08-2004 and again on 23-05-2005, he deposited ₹ 1.50 lacs in cash and issued cheque on the very next date. Thereafter, till 28-09-2007, there was no entry in bank account except bank interest. The Assessing Officer was not convinced with the reply of the assessee and accordingly treated the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the submissions of the assessee observed that immediate credit in the bank account of both the creditors before issue of cheque to the assessee was in cash and in the bank account, no other transaction was found. He further observed that both the persons were employee of the assessee and their statements were recorded wherein they explained the source of deposits in the bank account as out of past savings or recovery of advance given in earlier years or the agricultural income. However, no evidence of past savings or realization of advances or agricultural income was furnished. The ld. CIT(A) also observed that in the statement Shri Tara Chand stated that he was having salary income of ₹ 11,000/- per month and Shri Khiya R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als available on record. In the present case, the assessee received the loan from his employees. Their statements were recorded by the Assessing Officer. The creditors explained the source for giving loan. Shri Tara Chand who was drawing salary of ₹ 11,000/- per month and gave loan of ₹ 90,000/- to the assessee, explained the source from past savings and income from salary & stitching. The Assessing Officer did not accept the explanation given by Shri Tara Chand. However, nothing is brought on record to substantiate that he was not in a position to give the loan of ₹ 90,000/- to the assessee out of his past savings and the income from salary as well as stitching. Merely on this basis that cash was deposited by the credito ..... X X X X Extracts X X X X X X X X Extracts X X X X
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