TMI Blog2014 (8) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... o the value of construction either on the side of the assessee or on the side of the Department - there is no specific notification or circular indicating that CPWD rate alone should be adopted in arriving at the cost of construction, the Tribunal is justified in adopting the valuation of the State P.W.D. rates for the purpose of determining the cost of construction – Decided against Revenue. - Tax Case (Appeal) No.255 of 2014 - - - Dated:- 22-7-2014 - R. Sudhakar And G. M. Akbar Ali,JJ. For the Appellant : Mr. J. Narayanaswamy Standing Counsel for Income Tax JUDGMENT (Delivered by R. Sudhakar,J.) This Tax Case (Appeal) is filed at the instance of the Revenue as against the order of the Income Tax Appellate Tribunal for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, did not accept such working and proceeded to value the property at ₹ 2,13,60,000/-. 3. The contention of the assessee before the Assessing Officer was that if the rate fixed by the State P.W.D. was adopted by the Valuation Cell, then there is not much of a difference between the cost admitted by the assessee and the cost determined by the Valuation Cell. The assessee also contended that the Valuation Cell has adopted the rates fixed by the Central P.W.D to arrive at a higher figure of ₹ 2,13,60,000/- towards the cost of construction. According to the assessee, this may not be appropriate and correct. 4. The Assessing Authority, however, declined to accept the valuation as propounded by the assessee based on the rates fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the Tribunal, accepted the contentions of the assessee. The Commissioner of Income Tax (Appeals), while allowing the appeal filed by the assessee, held as follows: I find force in the contention of the authorized representative. The Assessing Officer had not pointed out any defect in the construction cost recoded in the books of account before making a reference to the Valuation Cell and on this point alone, respectfully following the decisions of the Jurisdictional High Court and Tribunal relied on by the appellant, the addition deserves to be deleted. The learned representative has gone a step ahead and had effectively countered the cost estimation by reworking the estimate and proving that there are deficiencies in the report a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also perused the decisions of this Court reported in (2011) 331 Taxmann 216 (Madras) (Commissioner of Income-Tax V. Smt. V. Gajalakshmi); (2007) 288 ITR 312 (Commissioner of Income-Tax V. V.T.Rajendran) and 217 Taxmann 40 T.M.P.N.Murugesan -vs- Commissioner of Income-tax. 9. The issue involved in this Appeal is in a case of dispute where the assessee's valuation was not accepted, whether the rates fixed by the State P.W.D. or the Central P.W.D. should be adopted? 10. Since we are considering on this short campus, we are not inclined to issue notice to the respondent/assessee. 11. A perusal of the order of the Assessing Officer shows that the Assessing Officer was of the view that the State P.W.D rates should not be accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Valuation Officer. As is evident from the reading of assessment order, the Departmental Valuation Officer adopted CPWD rates, which were the rates prevalent in Delhi and other cities for working out the cost of construction of the building and the assessee's claim was rejected. 8. We do no find any justifiable ground to adopt the rate prevailing in cities like Delhi for the purpose of working out the cost of construction of house at Virudhunagar. When the details regarding the cost of construction at PWD rates for Virudhunagar District is applicable, there is no reason for the Valuation Officer to adopt the rate, which is prevalent at distant places and metropolitan cities like Delhi. Hence, on going through the Valuation repor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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