TMI Blog2010 (6) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... sions quoted by the assessee, no addition is justifiable. 3. The relevant facts, as noted by the AO, are as under : 2. The assessee produced books of account like cash book, ledger, genera] fees receipt registers and other relevant documents/papers for my examination and necessary verification. The assessee is an orthopaedic surgeon doing private practice for last 8-9 years . During the course of scrutiny of the case it came to knowledge that the assessee has made a huge investment in the construction of a nursing home known as 'Jagat Hospital'; looking to the volume of the investment the matter was referred to the Valuation Cell, Allahabad, for proper valuation of the property. The DVO vide his report dt. 15th March, 2007 has estimated the cost of the investment made in the construction of the property under reference at ₹ 80,31,500 against the total cost of investment disclosed by the assessee at ₹ 41,84,472 with the following year-wise break-up of the investment : Sl. No. Financial year Declared investment in construction Estimated cost of investment by DVO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the price prevailing at that time in the market of different commodities which is on much lesser side than adopted by the Valuation Officer. Thus the assessee has strongly pleaded that his valuation report be accepted. (Addition of ₹ 15,50,555) 6. The assessee to substantiate his case and to explain the investment has filed photocopies of the ledger, bills and vouchers relating to expenses of the property. He also filed details of the investment under different heads such as Sariya, Maurang, Gitti, labour and wooden work etc. The assessee also filed the details of the loan taken from different banks for construction of the property, copy of the bank statement, all these papers kept on records. Although the assessee has tried to establish the investment made in the construction of the property to be genuine he has tried to establish the investment made in the construction of the property to be genuine to the extent he has declared. In support he has filed a lot of photocopies of the ledger relating to the expenses under different heads, even then their genuineness cannot be ascertained in toto because complete and full vouchers and bills have not been filed. Merely filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as recorded item-wise details of the expenditure made in the construction of the aforesaid nursing home building in the cash book/ledger and all the entries made therein are fully supported by bills and vouchers, copies of which had been furnished before the AO. 5.1 Shri M.P. Mishra, learned counsel for the assessee vehemently argued that the AO has not pointed out a single instance to show that the assessee had actually incurred expenditure more than recorded in the books of account. Accordingly, Shri Mishra, learned counsel for the assessee submitted that the report of the DVO relied upon by the AO is not correct and reliable and the expenditure shown in the construction as per the books of account is liable to be accepted. For this purpose, Shri M.P. Mishra, learned counsel for the assessee relied on the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Meerut Cement Co. (P) Ltd. [2006] 202 CTR (All) 506 6. Shri Neel Jain, learned Departmental Representative relied on the order of the AO. He further relied on the judgment of the Hon'ble Uttarakhand High Court in the case of CIT v. Bhawani Shankar Vyas [2009] 311 ITR 8 (Uttarakhand) wherein it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of constructions are entered in the books of account, which are open to verification, and its correctness is not doubted, it should be accepted. In case of doubt, the assessing authority can refer the matter to the Valuation Cell for determination of cost of construction and rely upon such report as an evidence, but it is open to the assessee to challenge the correctness of such valuation report and in case if it establishes that such report is not correct and reliable expenditure shown in the construction as per the books of account is liable to be accepted. 8. In view of the above, we are of the considered view that there was no justification in making the addition. In the instant case, the AO has made the addition merely on the basis of report of the DVO. As per the ratio laid down by the Hon'ble jurisdictional High Court in the case of Meerut Cement Co. (P) Ltd. (supra), it is always open to the assessee to challenge the correctness of valuation report and in case he establishes that such report is not correct and reliable, expenditure shown in the construction as per the books of account is liable to be accepted. In the instant case, it is admitted position that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the DVO's report is not correct and reliable and therefore the expenditure incurred for construction as shown in the books of account, is liable to be accepted. We further hold that the ratio laid down by the Hon'ble jurisdictional High Court in the case of Meerut Cement Co. ( P.) Ltd. (supra) is squarely applicable to the facts of the present case. Accordingly, we delete the impugned addition. 9. Since we have deleted the impugned addition, therefore, we do not consider it necessary to decide ground Nos. 1, 2 and 3 of the appeal being of academic interest only. 9.1 Ground No. 4 relates to disallowances of expenses. This ground was not pressed before us and hence same is dismissed. 10. Now we will take up ITA No. 193/Luck/2010 relating to the asst. yr. 2005-06. The ground No. 2 of the appeal is similar to that of ground No. 2 of ITA No. 192/Luck/2010, the only difference is regarding the amount of addition sustained by the learned CIT(A). The addition sustained by the learned CIT(A) is ₹ 2,97,704. 11. The facts of the present year are similar to that of asst. yr. 2006-07 and therefore, the findings given in ITA No. 192/Luck/2010 shall apply to this grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
