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AMBICA REALITIES PVT. LTD Versus THE DY. C.I.T

2016 (2) TMI 833 - GUJARAT HIGH COURT

Suppression of cost of construction - amount invested by the appellant outside its books - Held that:- It clearly emerges that the disclosed cost of construction of ₹ 191.85 lacs was inclusive of ₹ 39.20 lacs of disclosure made by the assessee during the search. The Assessing Officer as well as the Tribunal at multiple places have referred to this figure inclusive of the disclosure by the Director of the assessee-Company. That being the position the Assessing Officer compared the fai .....

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for assessee would have been justified in arguing that further addition of ₹ 40.28 lacs by way of estimation of cost of construction would amount to double taxation. That is not the case here.

Appellant, however, raised an additional contention that the Assessing Officer could not have referred the cost of construction for his valuation. However, in the present appeal, we are not concerned with this controversy. The only question framed by the Court is with respect to addition .....

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following substantial question of law came to be framed: 1. Whether, in the facts and circumstances of the case, the ITAT was right in law in holding that a sum of ₹ 40,28,613 was required to be confirmed 'being the suppression of cost of construction' when it had already given a finding that an amount of ₹ 39,20,400 was invested by the appellant outside its books? 2. Brief facts are as under. 2.1 Appellant, assessee is a company registered under the Companies Act and is eng .....

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e. The Assessing Officer also was, prima-facie, of the opinion that cost of construction indicated by the assessee in the books of accounts was not correct. He, therefore, referred the matter to the Department Valuation Officer for his opinion. On the basis of such opinion and other materials on record, Assessing Officer concluded that in the cost of construction, there was under valuation of ₹ 40.28 lacs (rounded off). 3. The assessee carried the matter in appeal and raised the questions .....

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Assessing Officer having made such additions under the head of investment outside the books, it was thereafter, not possible for the Assessing Officer to estimate the cost of construction and to make further net addition of ₹ 40.28 lacs. Both additions cannot be simultaneously made which in view of the assessee would amount to double additions. 4. Since there is no dispute in this appeal regarding addition of ₹ 39.20 lacs, we may not refer to the discussion of the Assessing Officer a .....

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uch addition, the Assessing Officer was still not satisfied about the correct cost of construction having been reflected by the assessee in the books, he, therefore, called for the DVO's report. In the order of assessment, he estimated the cost of construction at ₹ 2.32 crores (rounded off). He compared such fair value of construction that the assessee's book disclosure for the period under consideration which came to ₹ 191.85 lacs (rounded off) inclusive of addition of ͅ .....

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