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TMI Blog2012 (10) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... or a total cost of ₹ 58,49,320/-. Share of each of the assessee in the said cost was ₹ 14,62,330/-. It seems there was a building standing therein which, as per the Assessing Officer, was demolished. A house was constructed in the said land during the period April, 2001 to March, 2004. During the course of the regular assessment proceedings of one of these assessees, namely, Shri Shivlal, Assessing Officer required from him details of cost of construction of the building. Address of the building was Door No.87, Mint Street, Chennai-79. A valuation made by a Registered Valuer was furnished by the assessee and in such valuation report, value of the building was shown as ₹ 74.85 lakhs. As against this, the details of construction expenses filed by the assessees gave a figure of ₹ 1,28,92,674/- which included value of the land and incidental charges. After excluding value of the land, the cost of construction admitted by the assessee as worked out by the A.O. came to ₹ 72,21,622/- against the value of ₹ 74.85 lakhs fixed by the Registered Valuer. Assessing Officer examined Shri Shivlal, whereupon it seems he admitted that no books were maintained for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(Appeals) was appreciative of the contentions of the assessees. According to him, jurisdictional High Court as well as the Tribunal had in similar cases held that cost of construction should be worked out based on State PWD rates only. In this view of the matter, he directed the Assessing Officer to adopt State PWD rates for working of the cost of construction. Nevertheless, for arriving at such State PWD rates, he held that the value fixed by DVO based on CPWD rates could be adopted as the base and a 20% reduction thereon if given, would suffice. CIT(Appeals) also found that construction was spread over to two assessment years 2003-04 and 2004-05, based on the report of DVO. Considering the cost admitted by the assessees for these years, he directed the A.O. to apply the ratio of 63.63% and 36.37% for the two assessment years 2003-04 and 2004-05 respectively. In other words, he directed the A.O. to spread the cost of construction to two years in the above ratio after considering value fixed by the DVO less 20% reduction for arriving at the value of State PWD rates were followed. CIT(Appeals) also worked out the excess of cost of construction, that was to be assessed under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any basis. Hence, according to him, no additions ought have been made under Section 69B of the Act. Finding of the CIT(Appeals) that an addition was required if State PWD rates were followed, was ill founded. Learned A.R. pointed the Registered Valuer s report was with Assessing Officer and in such report, Registered Valuer had followed State PWD rates for arriving at the cost of construction. 9. For arguing that State PWD rates alone could be followed, learned A.R. placed reliance on the decisions of Hon ble jurisdictional High Court in the case of CIT v. D. Subramanian (296 ITR 348) and that of Third Member decision of co-ordinate Bench of this Tribunal in the case of M. Selvaraj v. ITO (2004) 2 SOT 330 (Chennai) (TM). 10. For his submission that in an appeal for a particular year, direction for another year could not be given, learned D.R. relied on the decisions of Hon ble Apex Court in the case of Rajinder Nath v. CIT (120 ITR 14) and CIT v. Foramer France (264 ITR 566), that of Hon ble Delhi High Court in the case of CIT v. Banwarilal Sons (P) Ltd. (257 ITR 518), that of a co-ordinate Bench of this Tribunal in the case of Sun Metal Factory (I) P Ltd. v. ACIT (2010) 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in support of the cost shown by it in its books for the construction. 13. As held by Hon ble Apex Court in the case of CIT v. Sun Engineering Works Pvt. Ltd. (1992) (198 ITR 297) (SC), decision of a Court shall not be considered divorced from the facts based on which such decisions were given. Decision of a Court takes its colour from the questions involved in such cases. Therefore, in our opinion, the observation made by the Third Member decision on M. Selvaraj s case (supra) that valuation based on State PWD rates had to be followed instead of valuation based on CPWD rates, cannot be taken as a universal Rule. Such directions were given based on the facts of that particular case. Here also, what we find from the orders of Assessing Officer that all the assessees, except Shri Shivlal, had filed a Trial Balance where the value of the building was reported. No doubt, in the case of Shri Shivlal, it has been noted by the Assessing Officer that no books were maintained for construction activities. Nevertheless, in an answer to a specific query put by the A.O., it was replied by the said assessee that he was debiting the expenses to his personal books. Whether books are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore it. The expressions finding and direction in s. 153(3)(ii) of the Act must be accordingly confined. Sec. 153(3)(ii) is not a provision enlarging the jurisdiction of the authority or Court. It is a provision which merely raises the bar of limitation for making an assessment order under s. 143 or s. 144 or s. 147 : ITO vs. Murlidhar Bhagwan Das (1964) 52 ITR 335 (SC) : TC51R.2168 and N.K.T. Sivalingam Chettiar vs. CIT (1967) 66 ITR 586 (SC) : TC51R.2042. The question formulated by the Tribunal raises the point whether the AAC could convert the provisions of s. 147(1) into those of s. 153(3)(ii) of the Act. In view of s. 153(3)(ii) dealing with limitation merely, it is not easy to appreciate 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). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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