TMI Blog2012 (11) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ent could be computed. Therefore restore back the same to AO for fresh verification Assessee has 2 vacant plots - AO has adopted 10% of the investment value as the notional rent under head income from house property – Held that:- Since the adoption of 10% of the investment appears to be on the higher side. We, therefore, direct the AO to adopt 8% of the investment as the notional rent from such house properties. Addition on the basis of report of valuation officer on under constructions property – AO made reference to Department valuation officer to determine cost of construction, in absence of books – Held that:- As the assessee neither produced books of accounts before the AO nor any books of accounts were found during the course of search could not be controverted by the assessee. Therefore under these circumstances AO rightly referring the matter to the DVO for determining the cost of construction. Whether CIT(A) accepting the report of DVO after passing the assessment order by AO – Held that:- Since the DVOs report was received after passing of the order by the AO, therefore, the CIT(A) was fully justified in accepting the report of the DVO. It is the settled proposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22/23 of the Income Tax act. In view of the above, the AO estimated 10% of the investment in such House Property as the notional income. After deducting 30% towards repairs etc. u/s.24 of the Income Tax Act, the AO made addition of Rs. 5,99,262/-. 4. Before the learned CIT(A) it was submitted that the list contains 2 vacant plots on which there is no construction and therefore no notional rental income should have been computed. It was submitted that the assessee being a political leader and an Ex.MP was using 3 flats and one shop at Panvel for political purposes which are as per Sl.Nos. 9 to 12 above. Since the assessee is not earning any income, therefore, no notional income should have been computed from those 4 properties. So far as the property located at Kalote Khalapur is concerned it was submitted that the same is an ancestral house maintained for agricultural activities at native place and the labourers use this property for their stay. Therefore no notional income should be computed on this property. Finally it was argued that no House Property could fetch income @ 10% of the investment which are located at Panvel and Pune. 4.1 Based on the arguments advanced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resh adjudication. 6.1 So far as the claim of the learned counsel for the assessee that the 4 properties, i.e. 3 flats and one shop at Sawali building at Panvel are being used for assessee s political activities as an Ex.MP we find the learned CIT(A) did not agree with the contention of the assessee in absence of any evidence filed before him. Further the assessee has also not furnished the details of payment of Municipal Taxes as observed by the learned CIT(A). Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the AO with a direction to ascertain as to whether the 3 flats and a shop in question are being used for the political activities of the assessee or not. The AO shall decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. 7. As regards the 2 vacant plots are concerned we find the learned CIT(A) has already deleted the notional rent for which the revenue is not in appeal, therefore, the same is not required for our consideration. 8. So far as the remaining properties are concerned we find the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional construction cost admitted. The registered valuer has estimated the cost of construction at Rs. 58.78 lakhs. Subsequently, the AO passed an order u/s.154 wherein he removed the addition of Rs.36,02,740/- on the ground that, it was already reflected in the balance sheet. 12. It was submitted before the learned CIT(A) that the AO has neither looked into the books nor has he rejected the books before making reference to valuation cell, therefore, the reference to valuation cell is illegal. The assessee placed reliance on the decisions reported in ITO W-5(1) Vs. Vijeta Educational Society, (2009) 118 ITD 382 (Luck) and Reliance Jute Inds Ltd. Vs. ITO (1984) 105 ITR 643 (Cal.). It was further argued that the AO referred the property to valuation cell under impression that the assessee had not accounted for the investments in books and also the building was not completed as on 31-03-2008. It was submitted that that the cost of construction in Panvel is much less than in Metros like Mumbai and Delhi. The DVO has adopted a cost index of December 2009 which is wrong. It was also submitted that the sand and wood recovered from the old building was reused, the construction took 3 y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. The finding given by the learned CIT(A) that the assessee neither produced books of accounts before the AO nor any books of accounts were found during the course of search could not be controverted by the learned counsel for the assessee. Under these circumstances, we find no infirmity in the action of the AO in referring the matter to the DVO for determining the cost of construction. Accordingly this argument advanced by the assessee being devoid of any merit is rejected. 16. So far as the addition sustained by the learned CIT(A) we find he proceeded to determine the cost of construction as if the house is fully complete as on 31-03- 2008 whereas the records show that the assessee was showing construction in the subsequent year. Since the appeal before us is for assessment year 2008-09, therefore, only difference between the investment made by the assessee upto 31- 03-2008 and the cost of construction determined by the DVO upto that period can at best be added. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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