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TMI Blog2017 (2) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... clarified the position about the value of property.It has been specifically mentioned in that letter that total cost of building upto 31.3.10 was Re.3.67crores.Besides,the assessee had given year-wise break up of expenditure made for construction of building and had capitalised the same. The accounts of the assessee were audited. In our opinion,there was no justification after letter of consultant to take the value of the building at ₹ 8 crores. The assessee had obtained a valuation report from a chartered engineer who is also a registered valuer and same was submitted to the FAA. As per the report of the registered valuer the estimated total cost of investment is ₹ 8.79,36,912/-.Thus there is a minor difference of ₹ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had shown a total project cost at around ₹ 5 crores.He asked the assessee to explain as to why the project cost should not be taken at ₹ 8 crores.The AO observed that it was very difficult to accept that architect,who was authority in the construction design and evaluation of the structure would quote from figure that too file calculating his fees.After considering the explanation of the assessee in that regard the AO held that the assessee had concealed the expenses to the tune of ₹ 3 crores in the project. Invoking the provisions of section 69 C of the Act,he added the said amount to the total income of the assessee. 3. Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d payments were made accordingly, that the assessee had obtained written clarification from the consultant with respect to clerical error in one of the bills, that in the subsequent financial year it had constructed the additional for, on the said building and the total cost of construction of the building is ₹ 9.06 crores, that the cost of building incurred by the assessee and capitalise in its books of account as on 31/03/2010 was ₹ 6.64 crores inclusive of allocation of preoperative expenses capitalised along with the cost of building, that the consultant had certified that building was completed in March, 2010, that remaining part of the building was completed in subsequent years, that it had incurred further cost of constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence can be made,for determining the fair market value and not for determining the cost of the of construction,that the issue in the case under consideration was to determine the cost of construction. He referred to page five of the paper book and argued that there was a mistake in the one of the bills raised by the consultant.The Departmental Representative(DR) supported the order of the FAA and argued that the architect had in its bill clearly mentioned the cost of the project at ₹ 8 crores. 5. We have heard the rival submissions and perused the material before us. We find that assessee had carried out construction during the year under consideration, that it had entered into an ACA with M A,that it had to pay commission at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding upto 31.3.10 was Re.3.67crores.Besides,the assessee had given year-wise break up of expenditure made for construction of building and had capitalised the same.The accounts of the assessee were audited. In our opinion,there was no justification after letter of consultant to take the value of the building at ₹ 8 crores.The assessee had obtained a valuation report from a chartered engineer who is also a registered valuer and same was submitted to the FAA.As per the report of the registered valuer the estimated total cost of investment is ₹ 8.79,36,912/-.Thus there is a minor difference of ₹ 36,106/- in the cost of investment shown by the assessee and cost estimated by the registered valuer.In these circumstances,restric ..... X X X X Extracts X X X X X X X X Extracts X X X X
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