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2014 (11) TMI 213 - AT - Income TaxDeletion of unexplained investment in hospital building – Held that:- The addition on account of unexplained investment in the construction of hospital building is not justified - In the course of survey, assessee did offer additional income on account of unexplained investment in the construction of the hospital building - such a declaration made was retracted within a short span of time and of course much before the due date of filing of return for the assessment order - The assessee explained that the declaration was based on a mistaken fact-situation inasmuch as the valuation report of Shri Madhukar Dhere dated 20.02.2009, which formed the basis for the declaration, was unreliable - CIT(A) has noted that the construction of the building started in the AY 2005-06 was still continuing on the date of survey and therefore it was imperative for the Valuer to take into consideration the cost of construction in the respective periods. The absence of such an approach in the report of the Valuer justifiably renders such report as unreliable in order to establish the estimated cost of construction of the building - the total investment in the hospital building was adopted by the AO which was reflected in the books of account maintained for AY 2007-08 and it did not take into consideration the expenditure incurred by the assessee for the period from 01.04.2007 upto the date of survey - CIT(A) considered the report of a Government Approved Valuer and compared the value estimated by him with the cost of construction recorded in the books of account - The CIT(A) correctly noted that the difference between the two figures was insignificant, which cannot be ruled-out because valuation report is ostensibly only an estimation - the CIT(A) was justified in deleting the addition made by the AO – Decided against revenue. Unexplained investment in interior decoration – Held that:- The CIT(A) made no mistake in sustaining the addition on account of unexplained money spent on furniture, fixture and interior decoration - The explanation furnished by the assessee in the course of assessment proceedings has been aptly considered by the CIT(A) and found to be incorrect – there was no reason to interfere with his conclusion on this aspect – Decided against assessee.
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