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TMI Blog2017 (9) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... he law applicable to the facts of the appellant's case and hence liable to be quashed. 2. The Learned Commissioner of Income-Tax(Appeals)-2, Visakhapatnam, ought to have accepted that, in the facts and circumstances of appellant's case, the very reference of Cost of Construction to DVO, is not correct and as such the very addition relying on report thus obtained is un called for and liable to be deleted. 3. The Learned Commissioner of Income-Tax(Appeals)-2, is not at all justified in sustaining addition of Rs. 36,63,299/- relying on DVO report by adopting plinth area rates and cost index method issued by CPWD approved by CBDT, which is mere opinion, as against cost of construction recorded in the regular books of account maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds and any other ground or grounds that may be urged during the course of hearing of the appeal, the appellant humbly prays the Hon'ble Income Tax Appellate Tribunal to allow the appeal or to give appropriate relief as the Hon'ble Tribunal may deem it fit, in the facts and circumstances of appellant's case." 3. The assessee has raised as many as grounds. However, the issue for consideration is whether the Ld. CIT(A) is correct in confirming the addition of Rs. 36,16,299/- by not allowing the deduction of 15% from cost of construction by following the CPWD method and 10% on selfsupervision. 4. Facts are in brief that the assessee is a partnership firm filed its return of income for assessment year 2012-13 on 7.9.2012 declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order, the A.O. has noted that the assessee categorically admitted voluntarily in his statement u/s 131 of the Act about its inability to produce the bills and vouchers with reference to certain expenses such as labour, material such as sand, bricks, etc. besides the A.O. also noted that the valuation officer has opined that the accounts method could not be adopted for determining the cost of construction as the assessee failed to submit details of quantity, labour employed, duration period for which labour employed daily, site visit, etc. The valuation officer also noted that only few purchase bills and vouchers were submitted by the assessee besides details of the measurement of all the items, structural/working drawings of the bui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention that rebate should be allowed towards self-supervision and rate difference. As regards rate difference, it is noted that the DVO has adopted the rates approved by the CBDT taking into account cost index of particular time and place. This aspect was discussed in detail in the DVO report and the AO in his assessment order at page 10. In view of these I do not find any merit in the authorized represetative's contention and the same is rejected." 6. So far as self-supervision charges are concerned, the Ld. CIT(A) has held as under: "As regards the plea towards self-supervision, I find that the DVO has allowed rebate at 7.5% of an amount of Rs. 15,88,392/-. However the AO did not allow such relief taking into account the professiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of vouchers relating to labour, material such as sand, bricks, etc. He has not retracted subsequently. The assessing officer has referred the matter to the DVO for determination of cost of construction. The DVO has adopted the rates approved by CBDT by taking into account cost indexation of time and place and determined the cost of construction at Rs. 2,56,24,000/- after giving allowance towards self-supervision of Rs. 15,88,392/-. The A.O. has called the assessee's objections as to why valuation determined by DVO should not be adopted. In response to that, the assessee has submitted before the A.O. that the DVO has followed the CPWD rates and has also allowed only 7.5% towards the self-supervision and submitted that 20% should be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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