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2014 (11) TMI 1163 - AT - Income TaxRejection of the books of account u/s. 145(1) - Held that:- Many times expenditure is booked but the assessee may not be in a position to satisfy the Assessing Officer in respect of the nature of the said expenditure as required evidence may not be sufficient. The assessee has not made the provisions in respect of the accounting charges. We find that the Assessing Officer has given more importance to the fact that the assessee is not having any computer. In our opinion a fact also cannot be discarded that many times the assessee may engage professional accountant instead of taking the full liability of the employee and the accountant maintains the account. It is one of the recognized practices in the business or trade. Even if the assessee engaged in the land development and selling of plots but it appears that the said land was owned by the assessee and it was agricultural land which was under cultivation. Except showing minor discrepancy the Assessing Officer has not made out the case for rejection of the books of account by invoking Sec. 145 of the Act. We, accordingly, concur with the finding of the Ld. CIT(A) that the Assessing Officer was not justified in rejecting the books of account of the assessee. Unexplained expenditure for purchasing hotel - Held that:- CIT(A) has held that the amount of investment in hotel has been recorded by the assessee in the books of account and the source of said investment has also been supported by the sale proceeds of the agricultural land amounting to ₹ 1.16 crores and sale proceeds of the plot amounting to ₹ 2,09,11,282/- during the year. This fact has not been controverted before us. We find no reason to interfere with the order of the Ld. CIT(A) on this issue as the said amount is dully recorded in the books of account and the assessee has also explained the source. Addition towards alleged cash deposits into bank account - Held that:- It appears that there were deposits ₹ 14,18,736/- in Janlaxmi Bank and ₹ 14,01,090/- in Rajlaxmi Bank which have been recorded by the assessee in the books of account. If the amounts are recorded in the books of account then how the Assessing Officer has made the observation that the bank of account was not appearing in the audited balance sheet. In this case the assessee is in the business of development of agriculture land and sale of plots and he is gradually selling his agricultural land which has been developed and plots are made. The finding of the Ld. CIT(A) has not been controverted before us. The Ld. AR also pointed out that in the balance sheet the said bank accounts are appearing. In our opinion the reasons given by the Assessing Officer are totally erroneous and contrary to the evidence on record. We find no reason to interfere with the order of the Ld. CIT(A). Addition made on the basis of Department Valuation Officer (DVO) report - Held that:- We find that the difference in the valuation is less than 10% that is between the sale consideration shown by the assessee which is at ₹ 1.61 cores and valuation made the DVO is ₹ 1.76 crores. The Ld. CIT(A) has followed the decision of the ITAT, Pune in the case of Rahul Construction vs. DCIT 38 DTR 19 wherein it is held that if the difference in the valuation made by the DVO and value declared by the assessee is less than 10% then no addition is justified u/s. 50C. As this fact is not disputed before us and also the Ld. CIT(A) has followed the decision in the case of Rahul Construction (2012 (1) TMI 229 - ITAT PUNE), we decline to interfere with the finding of the Ld. CIT(A) for deleting the addition. Calling the valuation report from the DVO - whether the Ld. CIT(A) can give the directions to the Assessing Officer to get the valuation done by the DVO when admittedly the DVO has given his opinion in respect of the valuation adopted by the assessee for computation of the capital gain? - Held that:- CIT(A) has exceeded his jurisdiction and authority by directing the Assessing Officer to refer the matter to the DVO for ascertaining the fair market value (FMV) of land bearing S. No. 264/1 and 265/1 at Mhasrul as on 01-04-1981. We, therefore, cancel the directions of the Ld. CIT(A) to the extent that the Assessing Officer should ask the DVO to file copies of the valuation report of the lands at S. No. 264/1 and 265/1 valuing the said lands on 01-04-1981. We also cancel the directions of the Ld. CIT(A) that the Assessing Officer should compute the capital gain on the basis of the value of the lands as on 01-04-1981 arrived at by the DVO in his valuation report. At the same time we find that the assessee had already lodged a claimed by filing the valuation report of the Govt. Approved Valuer. We consider it appropriate to give the direction to the Assessing Officer to consider the valuation report of the Approved Govt. Valuer filed by the assessee in respect of the fair mart value of as on 01-04-1981 and accordingly, decide the taxable capital gain as per the provisions of law. We make it clear that we are not expressing anything on merit in respect of correctness of the valuation report obtained by the assessee from the Govt. Approved Valuer. With this direction we allow the Ground Nos. 6 and 7 for the statistical purpose.
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