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TMI Blog2015 (12) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... round to the filing of this appeal is that the Assessee who is in the business of real estate developers and builders filed its return of income for the Assessment Year ('AY') 2010-11, which was selected for scrutiny. The assessment was completed under Section 143 (3) of the Income Tax Act, 1961 ('Act') on 13th March 2013 at a total income of Rs. 70,55,158. 4. The AO made an addition of Rs. 36,26,586 on account of alleged excess cost of construction on the ground that cost should be taken at Rs. 511 per sq. ft. as against Rs. 750 per sq. ft. shown by the Assessee. During the course of assessment, the AO appointed District Valuation Officer ('DVO') who undertook an evaluation under Section 142A of the Act and determined the cost of construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.6093/Del/2013, before the ITAT. The ITAT, in the impugned order dated 6th May 2015, noted that the Assessee did not adduce any evidence in support of the estimated cost of construction of Rs. 700 per sq.ft and no valid reason was assigned by the CIT (A) either, while granting relief to the Assessee. Accordingly, the ITAT restored the order of the AO. 8. The Court has heard the submissions of Dr. Rakesh Gupta, learned counsel for the Assessee and Mr. Rahul Chaudhary, learned counsel for the Revenue. 9. It is seen that the report of the DVO which was commissioned by the AO was not acceptable to the Assessee. That report estimated the cost of construction at Rs. 1174 per sq.ft. Having persuaded the AO not to go by the report of the DVO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost of construction of the flats in question. One method was to insist on a proper report of valuation taking into account the books of accounts maintained by the Assessee himself. The alternative method of taking the figure for 2008 and applying to it a 'mark up' by the cost inflation index should normally be resorted to when the Assessee is unable to produce its books of accounts or documents. Where it is prepared to do so, as in the present case, the former method should be adopted. 12. In view of the statement made by the counsel for the Assessee before this Court, the Court is of the view that the ITAT should re-examine the above issue on merits by calling for a report of valuation by any approved registered valuer as may be c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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