TMI Blog2017 (7) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of ITO Vs Dr. Anand Chhabra (2006 (11) TMI 268 - ITAT JODHPUR) has held that such supervision rebate shall be given ranging from 7% to 10%. Therefore, in view of the various decisions of the tribunal on this issue we direct the AO to allow a rebate of 10% on account of self supervision while computing the rate of cost of construction. Hence this ground of the assessee’s appeal is partly allowed. Addition on account of interest on FDR invested in the earlier years - Held that:- The assessee categorically stated before the AO that this amount of interest is already offered in the return of income as part of the interest income of ₹ 72,642/- This fact has been duly recorded by the AO in para 5.3. Despite that the AO has not accepted the explanation of the assessee. We note that as per schedule 4 of profit & loss account the assessee has shown the interest from banks at ₹ 72,642/- and further the interest of NSC at ₹ 2,641/-. Therefore, prima facie it appears that the interest received from the bank has been duly reflected as part of the interest income of ₹ 72,642/-. However, since the CIT(A) has not adjudicated this issue therefore, for the lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re partly allowed. - ITA Nos. 1490 to 1492/Bang/2015 - - - Dated:- 8-3-2017 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER, AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER For The Appellant : Shri Narayana Murthy, CA For The Respondent : Shri G.R. Reddy, CIT(DR-I) ORDER Per Vijay Pal Rao, Judicial Member These three appeals by the assessee are directed against the composite order dated 31.08.2015 of CIT(A) for the assessment years 2011-12 to 2013- 14. Since these three appeals are arising from the assessments framed u/s. 143(3) r.w.s. 153A of the IT Act and involve common issues therefore, these three appeals were clubbed together for the purpose of hearing and are being disposed of by this composite order. 2. There is a delay of 43 days in filing these appeals by the assessee. The assessee has filed a petition for condonation of delay which is supported by an affidavit. The ld. AR of the assessee has submitted that since the appeals of the assessee for three years have been disposed of by the CIT(A) by a composite order, the assessee applied for certified copy of the impugned order to file three separate appeals before the tribunal. He has submitted that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in house construction. 3. The learned CIT(A) erred in law in confirming the addition of ₹ 51,347/- in respect of interest earned or FDR invested in earlier years. 4. The learned CIT (A) erred in law in sustaining the disallowance of ₹ 24,987/- estimated at 30% of the administrative expenses related of the professional income of the appellant. 5. The learned CIT (A) erred in law in not granting proper and sufficient opportunity to the appellant to put forth his case and this has resulted in violation of principles of natural justice. 6. The learned CIT (A) erred in law in ignoring the details furnished by the appellant regarding sources of investment in house construction. 7. The learned CIT (A) ought to have adopted the KPWD rates rather then the CPWD rates for valuation of the house property. 8. The learned CIT (A) ought to have granted self-supervision charges at 10% of the total cost of house construction as against 6% allowed by the District Valuation Officer. 9. For These and such other grounds as may be advanced on or before the date of hearing, he appellant humbly prays that this Hon'ble Tribunal be pleased to allow this appeal and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Dr. Anand Chhabra (2007) 107TTJ 0831. The ld. AR has also relied upon the decision of the Chennai bench of the tribunal in case of DCIT Vs Smt. C.K. Sumathy, (2010) 6 ITR 0193. 9. On the other hand, the ld. DR has relied upon the orders of the authorities below and submitted that the CIT(A) has already allowed the substantial relief to the assessee and therefore no further reduction in the addition on account of investment in cost of construction of house can be allowed. 10. We have considered the rival submissions as well as the relevant material on record. The limited grievance of the assessee in respect of this issue is application of CPWD rates or state PWD rates while computing the cost of construction. There is no dispute that the DVO while computing the valuation as per the valuation report has considered the CPWD rates despite the objections raised by the assessee. It is pertinent to note that this issue of applicability of state PWD rates has been considered by this tribunal in series of decisions. The tribunal has taken a consistent view that when the property is situated in the state PWD jurisdiction then the state PWD rates should be applied to ascertain the cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of ₹ 72,642/-. The AO did not accept this explanation of the assessee and made an addition of ₹ 51,347/-. The assessee challenged the action of the AO before the CIT(A). However, the CIT(A) has not adjudicated this issue. 13. Before us the ld. AR of the assessee has referred to the schedule 4 to Profit Loss account at page 146 of the paper book and submitted that the total interest of ₹ 72,642/- is comprising of the interest from bank deposits in various branches and further the interest on NSC has been separately shown in schedule 5. Therefore, the ld. AR has submitted that the assessee has already offered the interest income in the return of income. On the other hand, the ld. DR has relied upon the order of the AO and submitted that the AO has verified the record and found that the assessee has not offered the interest of ₹ 51,347/- 14. We have considered the rival submissions as well as relevant material on record. The AO made an addition of ₹ 51,347/- on account of interest on Fixed Deposit and National Savings Certificate. The assessee categorically stated before the AO that this amount of interest is already offered in the return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by any standard the quantum of administration expenses in relation to the total professional receipts are reasonable and are below the normal claim in similar cases. The ld. AR has even referred the amendment vide Finance Bill 2016 in section 44ADA which provides for estimating the income of an assessee engaged in any profession whose total gross receipt does not exceed ₹ 50 Lakhs in the previous year. Thus, the revenue considered 50% of the gross receipt of the profession as reasonable expenses to be allowed for computing taxable income from profession. The assessee has claimed the administrative expenses below 15% of the gross receipts and therefore adhoc disallowance of 30% is not justified. On the other hand, the ld. DR has relied upon the orders of the authorities below and submitted that when the assessee has not substantiated his claim by filing the supporting evidence, then the disallowance of 30% is justified. 17. We have considered the rival submissions as well as relevant material on record. The assessee has shown the professional receipts of ₹ 5,72,356/- against which the assessee has claimed administrative expenses of ₹ 83,339/- which is less tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue for the assessment year 2011-12 this issue stands disposed of in same terms. 21. Ground No. 3 is regarding disallowance of 30% of administrative expenses. This issue is common as for the assessment year 2011-12. In view of our finding on this issue for the assessment year 2011-12 this issue has been disposed of in same terms. 22. For the assessment year 2013-14, the assessee has raised the following revised grounds. 1. The order of the learned CIT (A) is opposed to law, facts and evidence in this case. 2. The learned CIT (A) erred in law in sustaining addition to the tune of ₹ 13,47,877/- as unexplained investment in house construction. 3. The learned CIT (A) erred in law in sustaining additions on account of unexplained gold and silver to the extent of ₹ 17,71,225/- 4. The learned CIT (A) erred in law in confirming the addition of ₹ 10,00,000/- being case found in the bank locker as unexplained income. 5. The learned CIT (A) erred in law in sustaining the disallowance of ₹ 1,28,848/- estimated at 30% of the administrative expenses related to the professional income of the appellant. 6. The learned CIT (A) erred in law in not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of the assessee consist of himself, his wife and two sons born in the year 2002 and 2007. Since the assessee belongs to Reddy community whether it is customary to receive gifts on occasions like wedding, birthday etc. The AO has wrongly assumed that the jewellery was acquired during the Financial Year 2012-13 and applied the prevailing rate at the time of search instead of the rate prevailing when this jewellery was received by way of gifts at the time of marriage and remaining on the occasion of the birth of his sons. Thus, the ld. AR has contented that the AO has adopted the rate of gold prevailing at the time of search instead of the rate at the time of acquisition of jewellery in question as gift. He has referred to the details of the rate of gold jewellery at the relevant point of time of marriage, birth of first child and birth of second child. The ld. AR has submitted that the assessee had explained the occasions and times of jewellery received by the wife of the assessee then the rates prevailing at that point of time should have been applied for the purpose of addition. 27. On the other hand, the ld. DR has relied upon to orders of the authorities below and submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-13, the explanation of the assessee is plausible and cannot be brushed aside. Therefore, in view of the facts and circumstances of the case that the assessee belongs to a Reddy community whether there is a custom of giving the jewellery on the occasion of wedding as well as occasion of birth of children, we are of the considered view that the rate of gold jewellery has to be applied as prevailing at the time of the marriage of the assessee as well as at the time of the birth of the sons of the assessee. Accordingly, we set aside this issue to the record of the AO for applying the rate of gold as prevailing at the time of the wedding as well as births of the children of the assessee by considering the proportionate amount of jewellery on the occasions being wedding and birth. 29. Ground No. 4 is regarding addition of ₹ 1,00,000/- being cash found in the bank locker. We have heard the ld. AR as well as the ld. DR as well as the relevant material on record. When there is no dispute that the cash was found from the locker it has to be included in the income of the assessee in the absence of any explanation. However, the assessee is entitled for telescopic adjustment of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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