Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 946 - AT - Income TaxValuation of property - cost of construction of the property which was let out to Incor Hospitals - unexplained investment U/s. 69B - matter referred to DVO - CIT (A) granted relief towards construction above Terrace B and towards steel fire escape - HELD THAT:- AR demonstrated before us from the DVO’s report dated 29/06/2017 that the construction above Block-B Terrace and steel fire escape is included in the valuation report submitted by the DVO. AR pleaded that this was also demonstrated before the Ld. CIT(A) and hence the Ld. CIT(A) granted relief on this issue. We also note DVO has considered the valuation in valuing the construction of the property. AR pointed that these expenses were incurred by the lessee and hence adding it to the cost of construction of the assessee is not valid. We find from the valuation report of the DVO that this cost of construction has been included in the valuation report and being considered as cost of construction of the assessee. We therefore find merit in the arguments of the Ld. AR and from the materials placed before us, we find that there is no infirmity in the order of the Ld. CIT(A) on this ground and hence no interference is required. Addition to cost of lifts - As submitted by the Ld. AR the copies of bills have been made available to us and before the Ld. CIT(A). CIT(A) has therefore rightly considered the cost of invoices given by Kone Elevator India Private Limited for Rs. 16,05,000/- for 13 passenger capacity and Rs. 10,82,000/- for 8 passenger capacity. The cost of lifts is evidenced by the invoices issued by the supplier which was also produced before us. Therefore, on going through these documents and the facts involved in this issue, we find no infirmity in the order of the Ld. CIT(A) and hence no interference is required on this ground. Cost of transformers estimated by the DVO - We find from the paper book page No. 66 that the invoice from Esennar Transformers Pvt Limited is placed before us where the cost of transformer is only Rs. 5,14,609/- and the Ld. CIT(A) has rightly considered the same in his order. We therefore find no infirmity in the order of the Ld. CIT(A) and hence no interference is required on this ground. Allowing of rebate of 25% (15% towards difference between CPWD rates and local rates and 10% towards self supervision) as against 7.5% granted by the DVO - We find merit in the argument of the Ld. AR that CPWD rates are generally higher than the State PWD rates which was not at all considered by the DVO. The DVO has erred in adopting the CPWD rates in lieu of local State PWD rates in the valuation of the property. CIT(A) has referred to the Hon’ble ITAT, Vizag Bench decision in many cases cited by the assessee before him and allowed the rebate of 15% towards the difference between the CPWD rates and State PWD rate and also allowed the relief of 10% towards self-supervision from the cost estimated by the DVO. We find that the Ld. CIT(A) has rightly observed the difference between the CPWD rates and local State PWD rates and we find that the rates adopted by Ld.CIT(A) is reasonable and we are of the considered view that there is no infirmity in the order of the Ld.CIT(A) and no interference is required. Cost of construction of the property subsequent to handing over of possession to the lessee - DR could not demonstrate that the capital work in progress shown in the books of accounts pertains to any other property. We find force in the argument of the Ld. AR and we are of the considered view that the construction activities as disclosed in the books of accounts for the impugned property after the submission of documents from GVMC on 2/4/2013 deserves consideration towards cost of construction. The Ld. CIT(A) has rightly considered the same and therefore we find no infirmity in the order of the Ld. CIT(A) and no interference is required on this ground. DVO has not submitted the report within six months as specified U/s. 142A of the Act and therefore it is not valid - Ld. DR countered that section 142A(6) came into force only from 1/10/2014 and the case of the assessee pertains to AY 2014-15 and hence no limitation applies in the instant case. We agree with the contentions of the Ld. DR that since the amendment came into force from 1/10/2014, the limitation specified therein shall be applicable for the AY 2015-16 and shall not be applicable for the AY 2014-15.
|