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TMI Blog1976 (7) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 disclosed by the assessee. The assessee was asked to explain the difference of Rs. 54,445 between the valuation arrived at by the Executive Engineer and the cost of construction disclosed by the assessee. The assessee explained that he had exercised personal supervision over construction, that the work was not entrusted to any contractor, that he used his own bullock carts and he used the stones from his quarry and that he used his own agriculture labour. It was contended that the special facilities enjoyed by the assessee were not taken into account by the Executive Engineer of the Valuation Cell. Besides this, it was contended that normally the Government rates would be more by 10 per cent to 15 per cent which is the margin enjoyed by the contractor and being so, the value fixed by the Executive Engineer was considered to be very high. The Income-tax Officer, after examination of the various contentions raised, agreed that an amount of Rs. 8,000 can be taken as the benefit obtained on account of personal supervision, employment of own agricultural labour, etc., by the assessee. In view of this, he came to the conclusion that the assessee had no explanation for the remaining amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of labour, the AAC estimated the value on this account at Rs. 14,000. (iii) Plaster of Paris Ceiling - The Executive Engineer of the Valuation Cell had worked out the cost at the rate of Rs. 64.60 per square meter and thereby arrived at the cost of Rs. 41,086. However, the assessee claimed that he had entered into contract with M/s V.B. Mahava Rao & Sons, Secunderabad and the labour charges on contract basis came to Rs. 15,000. It was contended that this payment was fully vouched. At the appellate stage, the AAC directed the Income-tax Officer to verify the assessee's arguments regarding the payment of Rs. 15,000 and also to ascertain the nature of work carried out by them. After receipt of report of the Income-tax Officer, the AAC noticed that the contractor was not able to give the actual cost of materials required for the work. In this connection, it was noticed by the AAC that the assessee himself had estimated the value on this account at Rs. 64 per Sq. Meter, in the year 1971 for purposes of wealth- tax. Considering the fact that the construction was done in 1969 and there could be an appreciation in the cost of materials at 15 per cent, the AAC considered that the excess c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he approximate amount of materials required for this work. Being so, it was argued that the Income-tax Officer and the AAC were not correct in concluding that full details regarding the cost of material and labour were not available from the said contractor. Besides this, our specific attention was drawn to para 17 of the order of AAC wherein he had mentioned that the Income-tax Officer had given excess credit for the cost of certain items amounting to Rs. 7,847. It was submitted that this is not correct inasmuch as no such excess credit was given by the Income-tax Officer. At this stage, we asked the learned Departmental Representative to clarify as to how the amount of Rs. 7,847 was added to the difference ascertained by the Income-tax Officer. No satisfactory explanation could be furnished even by the learned Departmental Representative. Being so, the learned counsel for the assessee submitted that there was no justification for the AAC to increase the actual difference between the cost as recorded by the assessee and the cost as estimated by the Executive Engineer by the said amount of Rs. 7,847. If this factor is taken into account, it was submitted that the ultimate differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AAC to examine the Executive Engineer to ascertain whether he was justified in adopting the valuation on certain estimated rates as given by him. 8. Regarding the Plaster of Paris ceiling, the AAC has gone into the approved valuer's report given in the year 1971 and he had given only a reduction of 15 per cent being the appreciation in value of the cost of materials for two years. This action of the AAC appears to be quite reasonable and examination of the Executive Engineer in this regard is not necessary. 9. The relief given by the AAC was only in respect of the above three items and in our considered opinion, examination of the Executive Engineer would not have brought out any fresh points on which the AAC could have taken any other decision. Taking these facts into account, we hold that the AAC was justified in deciding the issue regarding the valuation of the theatre without summoning the Executive Engineer inasmuch as the points involved only related to certain facts which are before the AAC for which examination of the Executive Engineer would not be necessary. Being so, the Departmental appeal will have to be dismissed on this account. 10. As regards the appeal filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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