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2016 (3) TMI 86 - AT - Income TaxReference to DVO - Additions towards difference between the cost of construction estimated by the DVO and cost of construction declared by the assessee - Held that:- In the present case on hand, the assessee claimed that she has used materials from dismantled building and also constructed the building on her self supervision. It is an undisputed fact that the DVO has applied the plinth area rate and cost index method, whereas the registered valuer has adopted detailed estimation method with plinth area rate prevailing in the market at that point of time. The DVO did not appear to have taken into consideration the local rates that actually existed during the period of construction. It is a common knowledge that CPWD rates are far higher than the local rates. Keeping in view of the fact that CPWD rates are always higher than the local rates, the CIT(A) would appear to have allowed 10% deduction towards cost of materials and supervision charges. Therefore, considering the facts and circumstances of the case, we are of the opinion that the assessee is eligible for 15% deduction towards rate difference and a further 10% deduction towards self supervision charges. Taking into consideration of the facts that the CPWD rates of New Delhi are always higher than the local rates we are of the opinion that the assessee is entitled for 15% deduction towards difference between CPWD rates and local rates and further 10% deduction towards self supervision charges. Therefore, we direct the A.O. to determine the cost of construction of building by taking average of the two plinth areas arrived by the DVO and claimed by the assessee and allow 15% & 10% respectively towards rate difference and self supervision charges. - Decided partly in favour of assessee
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