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TMI Blog1995 (6) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... aluation. He made a reference to the Departmental Valuation Officer (DVO) whose report was received. He had estimated the cost at Rs. 35.48 lakhs as on 19th Oct., 1984, the day of his inspection. The assessee had maintained books of account in regard to construction. 4. The assessee had objected to the report of the DVO. The assessee also had furnished to the Assessing Officer the report of an approved valuer according to which the cost was Rs. 21,36,110. The Assessing Officer accepted the DVO's valuation. On the basis of that, he determined, in his own way, the cost of construction of the two theatres for the purpose of assessment. The difference between that cost and the declared cost was treated as unexplained investment and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee had again appealed from the order of the Assessing Officer. The CIT(A) called for a remand report from the Assessing Officer. In the meanwhile another thing had happened. 9. As mentioned earlier, the assessee had challenged the report of the DVO. There were specific attacks not only with regard to few items of work, rate, but also the area of construction. The DVO made a rectification on 10th Aug., 1989 and by that, he held that the cost of construction was Rs. 27.71 lakhs. The reason was this. The DVO had taken the roofing as one of RCC. This was not correct. No theatre would have an RCC roofing. In this case, the roofing was of asbestos sheets with steel stresses. The DVO corrected the mistake and sent a revised estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the assessee had not produced the books of account before the DVO as there was a dispute not only with regard to rates but also with regard to area of construction. 14. In reply, Sri Kishore Mallya stated that the remand report dt. 11th Dec., 1991 given by the Assessing Officer to the CIT(A) would furnish a complete answer to all the points raised on behalf of the Revenue in this appeal. 15. After a careful examination of the record we are convinced that the first appellate authority had not applied his mind at all to the questions that were posed before him for adjudication. The report of the DVO is not a sheet anchor. It is a piece of evidence like any other evidence and the acceptability of the same should have been consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that the accounts were being rejected to justify estimation. This is one aspect. The remand report sent by the Assessing Officer is on record. The three points which he considered according to the direction given by the CIT(A), in his order dt. 9th Sept., 1990, were: "(i) That the quantity of the materials purchased was not lesser than the quantity required for the construction; (ii) All the materials used in the construction have been accounted for; (iii) The quality and the quantity of the materials used as per the books of account tally with the quantity of the materials used in the construction of the theatre; (iv) The expenditure in respect of the construction of the two theatres has been taken at Rs. 18,66,881 by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e too much dependence on the report of the DVO would also be not proper. He had committed a great blunder valuing the theatres as if the auditoriums were of RCC construction. On being objected to, he could open his eyes and find that GI sheets and steel stresses had been used for roofing. That is the reason for bringing down the estimation from Rs. 38.41 lakhs to Rs. 27.71 lakhs. 22. Another point raised was in regard to parking space. It was submitted at the Bar that a common parking place was planned since they were twin theatres built side by side. 23. The report of the DVO reads "considering the prevailing rates of materials and labour in the locality the following plinth area rates are adopted". He does not compare his rates w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. It is held that addition could not be made on the basis of the report of the valuation officer. The principle laid down in those two authorities is squarely applicable to the facts of the appeal before us. 26. We may also make reference to few decisions of the Tribunal which were cited on behalf of the assessee. Relevant of them are : the decision of the Madras Bench of the Tribunal in the case of K. Hari Rao vs. Second ITO (1979) 8 TTJ (Mad) 15; the decision of the Ahmedabad Bench of the Tribunal in the case of ITO vs. Sethna Ice Cold Storage (1980) 9 TTJ (Ahd) 537; and the decision of the Jaipur Bench of the Tribunal in the case of Singhvi Woollen Industries vs. ITO (1980) 10 TTJ (JP) 276. In all these cases it is held that when a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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