TMI Blog2002 (1) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of construction rightly worked out by the Government Approved Valuer at Rs. 8,22,081. ( b )The cost of said construction estimated by the ITO as attributed to assessee (co-owner) for the period ending as on 31-3-1993 at Rs. 4,52,632 when construction had started on 1-8-1992 and ended in December, 1996. This estimate is based on mere hypothesis, supposition, presumption and without any material to justify it and the inference drawn is which cannot be drawn by any reasonable body of persons." 3.1 The facts in brief related to this issue are that in December, 1997, the A.D.I. (Investigation)-II Jalandhar, informed the Assessing Officer that new residential house had been contructed at Hoshiarpur by Shri Shekhar Sood and Smt. Sudesh Sood. During the enquiry by the Investigation Wing, it was claimed that the property belonged to Sh. S.C. Sood, HUF and total amount spent was claimed at Rs. 9,07,000. During the course of assessment proceedings, the source of investment was explained to be out of HUF funds, funds of Smt. Sudesh Sood, Sh. S.C. Sood and Sh. Shekhar Sood as well as N.R.I. gifts. It was claimed that the construction was completed in the month of December, 1996. Duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in adjustments, the Assessing Officer estimated cost of construction at Rs. 9,19,300 as against Rs. 9,22,081 determined by the approved valuer. However, the cost of construction for the period ending on 31-3-1993 was estimated at Rs. 4,52,632 by the Assessing Officer. 3.3 When the matter was taken before the learned CIT(A) the following line of arguments was taken : ( i )That the Assessing Officer was not justified in increasing the rates of built up area etc. by Rs. 20 to Rs. 30 per sq. ft. ( ii )That the Assessing Officer was not a valuer and the Assessing Officer has adopted the figure on guess work only. ( iii )That the Assessing Officer arrived at the figure of Rs. 4,52,632 by guess work only and that the Assessing Officer has surpassed the limits of arbitrariness. ( iv )That no recrods were maintained and it was not possible to make valuation from year to year. ( v )That in gift-tax assessment of the assessee, the assessee has shown only 1/3rd share of the property in question. ( vi )That Sh. Shekhar Sood had invested Rs. 1,60,000 upto May, 1995 and in support of the said contention, the assessee also filed a copy of the assessment order relating to assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood or Smt. Sudesh Sood and the assessee if any in subsequent years can not explain the investment made during the financial year 1992-93. 3.4. Aggrieved by the above findings of the learned CIT(A), the assessee is in further appeal before the Tribunal. Before us, Sh. Ravish Sood, the learned counsel appeared on behalf of the assessee and submitted that both the parties have committed glaring errors of law while estimating the cost of construction of the house in question, particularly the investment made by other two co-owners namely; Smt. Sudesh Sood Sh. Shekhar Sood had not been considered. According to the learned counsel for the assessee, the authorities below should have considered the investment made by other co-owners before making any addition in the hands of the assessee. It was vehemently argued that the Assessing Officer has not given any basis for making the estimate of cost of construction particularly when he has not referred the matter to the Valuation Cell of the Department for estimating the cost of construction of the house in question. It was also argued that the Assessing Officer arbitrarily enhanced the rates of different items and adjusted the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted that all the three persons had contributed towards the cost of construction. Therefore, it is clear that the investment made by the co-owners should have been assessed in their respective hands. However, it is not clear from the records how much share each person is having. The Assessing Officer has also not given any specific finding on this point. It would also be relevant to point out that the learned CIT(A) has not passed a speaking order and simply confirmed the action of the Assessing Officer without assigning any reason. It was brought to our notice that the assessment in the hands of Sh. Shekhar has already been made under section 143(3) of the Act vide order dated 30th Nov., 1998 for the Assessment Year 1996-97. It is not clear whether the assessment was made in the hands of Smt. Sudesh Sood. Considering the entire facts, we deem it proper to set-aside the findings of both the authorities below and restore the matter back to the file of the Assessing Officer with the direction to him to decide the issue afresh, on merits, keeping in view the above observations. However, it is made clear that any adverse observations made hereinabove will not effect the merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oan. 5.1. During the course of assessment proceedings, the Assessing Officer noticed that the assessee was maintaining car which was purchased after raising loan of Rs. 85,000. He also noticed certain entries in his Saving Bank Account and observed that Rs. 7,500 or Rs. 15,000 were having after almost regular intervals on the debit side of the account. He also noticed that one entry on 9-4-1992 written in the bank pass book was narrated that a sum of Rs. 7,500 was withdrawn for car loan, on that basis, the Assessing Officer estimated that the assessee might have paid a sum of Rs. 45,000 towards repayment of car loan and accordingly the addition. The learned CIT(A) confirmed the addition. 5.2. Being aggrieved, the assessee is in appeal. The learned counsel for the assessee Sh. Ravish Sood, submitted before us that the authorities below committed a glaring error of law while making the addition on the basis of withdrawal shown in the Saving Bank Account. It was vehemently argued that the Bank Accounts submitted by the assessee were accepted and no addition was made on the basis of credit entry in the pass book, so there was no case of the Department to make the addition for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehold expenses. ( vii )the CIT(A) erred in concurring with the ITO in making addition of Rs. 5,150 as LIC investment which the assessee has paid as premium to LIC and is entitled to rebate under section 88 which he had rightly claimed while computing his income. ( viii )the ITO erred in making addition of Rs. 3,850 as accretion in capital account to work out the income of the assessee." 6.1. Since we have restored the major issues to the file of the Assessing Officer for readjudication, and, therefore, we think it proper to set-aside the findings of the learned CIT(A) on these issues and consequently, these issues are also restored to the file of the Assessing Officer for re-adjudication. The Assessing Officer should give proper opportunity of being heard to the assessee. It is made clear that the assessee is free to adduce any evidence in support of his claim. It is also made clear that the Assessing Officer should consider the household expenses as a whole and he should also pass a speaking order keeping in view this fact that as to whether these expenses relating to car maintenance/petrol expenses, electricity and telephone expenses etc., were included in the house-hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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