TMI Blog2006 (11) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of apartments and sale thereof. During the years under consideration as well as the intervening year relevant to asst. yr. 1997-98, shopping complex known as 'Shrishti Complex' was constructed by the assessee. During the course of assessment proceedings for asst. yr. 1997-98, the said complex constructed by the assessee was referred by the AO to the valuation cell for the purpose of valuation of cost of construction. The Valuation Officer vide his report dt.20th May, 2000determined the value of said construction at Rs. 32,52,000 as against Rs. 17,41,148 shown by the assessee. The yearwise break-up of the valuation so made by the DVO vis-a-vis the construction cost shown to have been incurred by the assessee for the five years u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out by the assessee that the said valuation ought to have been done by applying itemwise rates, instead of plinth area rates adopted by the valuation officer. It was further submitted that the expenditure incurred by the assessee on construction of complex was his business expenditure and the same being of revenue nature, he was entitled for deduction in respect of the same under s. 37 of the Act even to the extent it was to be treated as unexplained. This submission made by the assessee however, was not found acceptable by the AO and rejecting the same, he proceeded to add the amount of difference in the cost of construction to the total income of the assessee treating the same as unexplained in the assessments completed under s. 148/143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to business stock, appellant was entitled to get deduction under s. 37 and the net effect would be zero. Thus, the net effect of the entire exercise of addition would be zero. The Department itself has allowed the appellant's claim for various deductions on account of self-supervision, bulk purchases and also UP PWD rates totalling to 31 per cent in the asst. yrs. 1999-2000 and 2000-01 and after reducing the valuation by 31 per cent, the addition of resultant difference, if any, was acceptable to the appellant to buy peace of mind and to end litigation." 4. The aforesaid submissions made by the assessee before him were found acceptable by the learned CIT(A) and he proceeded to delete the additions made by the AO on account of differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yr. 1998-99. Thus, the AO is directed to recompute the additions on account of unexplained expenditure in construction under s. 69C and also allow the claim for its deduction in the light of proviso to s. 69C." 5. Aggrieved by the aforesaid relief allowed by the CIT(A) to the assessee, the Revenue has preferred these appeals before the Tribunal by raising the following solitary ground which is common in all the present appeals: "That the learned CIT(A)-II, Dehradun has erred in law and on facts in directing the AO to recompute the additions on account of unexplained investment, as of unexplained expenditure under s. 69C. The assessee has made unexplained investment in constructing the shopping complex and not incurred expenditure, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained expenditure when deemed as an income cannot be allowed as an expenditure. The assessee had sold all the flats and the sale price of these flats as shown by the assessee has been accepted by the Revenue. In such circumstances there will be no effect on the income even if the addition is made on account of unexplained investment in construction. In view of the above, the order of the CIT(A) is just and proper and does not call for any interference. The same is confirmed and this appeal by the Revenue is dismissed." 7. Since the issue involved in the present case as well as all the material facts relevant thereto are admittedly similar to the case of Shri Neeraj Kumar, we are in agreement with the contention of the learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
