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2016 (1) TMI 806 - AT - Income TaxUnexplained investments in building - AO confirmed the additions made on the basis of the DVO report - DVO has allowed 6% margin towards self-supervision and difference between CPWD & State PWD rates - Held that:- Find force in the arguments of the assesse that, CPWD rates are prescribed for construction of buildings for the Central Government projects by taking in to account the standard quality of construction with high quality materials. Though these rates are the basis for valuation of cost of construction, suitable margin should be allowed, towards cost of materials and other charges considering the facts and circumstances, being quality of materials used and place of construction. In the instant case, as can be seen from the facts, the building is situated in village and the assesse himself constructed the building under his supervision. As claimed by the assesse, separate rates are prescribed by the state PWD for construction of buildings and which was brought to the notice of valuation officer but DVO ignored the state PWD rates. Therefore, we are of the view that the D.V.O. is not correct in considering the CPWD rates, when the state PWD rate is available for ascertaining the value of building. As the assessee is entitled for 15% deduction towards rate variation between CPWD and State PWD and a further 10% deduction towards self-supervision charges from the value arrived by the DVO applying the CPWD rates. The CIT(A), after considering the facts that the assesse has maintained books of accounts and bills for construction, scaled down the addition to ₹ 7,25,000/-. We do not find any error or infirmity in the order of the CIT(A). Therefore, we inclined to upheld the order of the CIT(A) and reject the ground raised by the revenue. - Decided in favour of assessee.
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