TMI Blog2003 (10) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Officer had estimated the total investment in the construction of the property at Rs. 11,96,400 and bifurcation of this investment allowance to the various years is as under: Assessment year Amount 1987-88 22,800 1988-89 2,89,500 1989-90 4,57,700 1990-91 4,26,400 11,96,400 3. The assessment for these three assessment years before us were reopened by issuing a notice under s. 148 of the Act and the AO had given some relief to the assessee on certain points, but on the basis of the reports submitted by the Valuation Officer of the Department, the following additions were made in respect of the following assessment years: Assessment year Amount 1988-89 1,11,200 1989-90 1,75,680 1990-91 98,825 4. The assessee, being aggrieved, preferred three appeals before the CIT(A), who decided all the three appeals by the composite order and extended the relief against which the Department had preferred these three appeals. 5. The order of AO and learned CIT(A) shall reveal that the addition made by the AO were solely based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such difference is ignorable. The learned CIT(A) decided the issue in favour of the assessee by noting as under : "6. I have carefully considered the submissions raised on behalf of the appellant and in view of the fact that the appellant is able to prove her contentions regarding the lesser amount spent in the fixation of marbles, I do not see any reason as to why her claim for deduction of Rs. 1,94,532 should be rejected. Similarly, when the appellant is able to furnish the necessary certificates from the architect that he charged only an amount of Rs. 3,000, there is no reason for resorting a higher estimation of Rs. 34,845 by the Valuation Officer or Rs. 10,000 by the AO. Similarly, when the appellant is in a position to prove that the amount of Rs. 19,737 were also paid to Agarwal Hardware Stores, Kanpur, for purchase of building material, there is no reason to reject her claim that this much amount was also invested in the construction of the house property. Further I do not see any reason in rejecting the appellant s claim that she invested a further amount of Rs. 1,15,000 in financial year 1991-92 in the construction of the property. It is pertinent to note that Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, he should have summoned the architect for cross-examination. The other plea of the learned counsel for the assessee is that the assessee s family members are dealing in contract business and having brick kiln. The assessee was able to get bricks, cement, iron etc. at very cheaper rates for which the AO himself has allowed the benefit of Rs. 40,000 in one year and such benefit should have been given in respect of all the assessment years. The contention is that in case the amount shown by the assessee are included, then the difference in between the amount of construction returned by the assessee and the amount of investment in the construction as estimated by the DVO will be less than 10 per cent and the Tribunal, Lucknow Bench in the case of Dy. CIT vs. Janki Prasad Garden Enclave (P) Ltd. in ITA No. 54/All/1999 had decided vide order dt. 28th Feb., 2003 and held that, if difference is less than 10 per cent in valuation made by the valuation expert and amount of investment returned by the assessee, then such difference is to be ignored. The case law has also been cited and the copy of that order is appearing in pp. 2-4 of his paper book-I. On the basis of this, the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the assessee submitted that if the AO has no jurisdiction to call for the report, then such report cannot be relied upon for making addition and for that learned counsel referred to the decision of Tribunal Nagpur Bench, in the case of Dr. Arjun D. Bharad vs. ITO (2003) 78 TTJ (Nag) 832, in which it was laid down that if the AO had exercised power under s. 131(1) of the Act, without any proceedings pending before him, then such report is not admissible and the AO has no jurisdiction to make reference without application of the mind in respect of the account books of the assessee. The learned counsel submitted that the AO has not pointed out any defect in the books of the assessee and, thus, the AO was having no jurisdiction to issue the commission to DVO for making estimate of investment in the construction of the house. 11. We have carefully considered the facts and circumstances of the case, the case laws to which our attention was invited and the rival submissions. So far as the legal position is concerned, the Hon ble Supreme Court of India in the case of Smt. Amiya Bala Paul vs. CIT, has laid down that the Valuation Officer appointed under the Wealth-tax Act, 1957 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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