TMI Blog2018 (1) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... is hereby sustained. In the result, ground of assessee’s appeal is dismissed. - ITA. No. 148/JP/2017 - - - Dated:- 15-1-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P. C. Parwal (CA) For The Revenue : Shri A. S. Nehara (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-I, Jaipur dated 19.12.2016 for Assessment Year 2007-08 wherein the assessee has taken the following grounds of appeal as under:- 1. Under the facts and circumstances of the case CIT(A) has erred by not accepting the fact that proper opportunity of hearing was not provided. 2. Under the facts circumstances of the case CIT (A) has erred by confirming addition of ₹ 46,200/- on account of income from house property without any basis and reasonable ground. 3. Under the facts circumstances of the case the CIT (A) has erred by confirming an addition of ₹ 1,19,730/- on account of commission and brokerage without any basis and reasonable ground. 4. Under the facts circumstances of the case the CIT (A) has erred by confirming addition on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, the ld AR submitted that both the lower authorities have estimated the income on surmises conjectures. No evidence is brought on record to estimate such income at a higher side. Therefore, the addition confirmed by Ld. CIT(A) be directed to be deleted. 8. We have heard the rival submissions and pursued the material available on record. There is no basis or evidence on record to estimate the commission and brokerage income as done by the AO. In the result, addition so made by the AO is clearly on an adhoc basis and cannot be sustained in the eyes of law and the same are hereby deleted. In the result, ground of appeal is allowed. 9. In ground No. 4, the assessee has challenged the confirmation of addition of ₹ 1,14,75,042/- on account of unexplained investment in building construction. Firstly, there is no dispute regarding the quantum of investment amounting to ₹ 1,14,75,042/- as estimated by the Valuation Officer in this regard. The limited issue under consideration is whether the said investment has been made during the year under consideration or not and whether the same can be brought to tax in the impunged assessment year in absence of satisfactory expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y 2006-07 pertaining to A.Y 2007-08 and as source of the said investment was not explained by the assessee, the same was treated as unexplained source of income for the year under consideration. 12. Further, the AO referred to the Valuation Report dated 23.01.2015 wherein the Valuation Officer has estimated the cost of the construction for FY 2006-07 at ₹ 1,14,75,402/- and given that the addition on similar account was made in the hands of the husband of the assessee, Shri Rameshwar Lal Kumawat for AY 2006-07, the addition was made in the hands of the assessee on protective basis for the impunged assessment year 2007-08. It was further held by the AO the assessee was provided a copy of the Valuation Report for filing her objections/explanation and as assessee has not filed any explanation or raised any objection, it was assumed that the assessee does not dispute the valuation so made by the Valuation Officer in terms of investment in construction of the said building. 13. From a close reading of the assessment order, as we have noted above, what emerges is that based on review of the assessee s statement of affairs for the FY 2005-06 and FY 2006-07 wherein only investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the said building is concerned, the Valuation Officer has stated that the period of construction has been taken as 01.04.2006 to 31.03.2007 as per AO s letter No. 342 dated 26.06.2014. Therefore, the Valuation Report confirms the fact of fully constructed building consisting of basement, ground and 4 floors having a total constructed area of 1185.58 sq. mtr. and the estimated cost of construction/investment amounting to ₹ 1,14,75,402 and as far as the year of construction of the said building is concerned, the same has been considered by the Valuation officer as 01.04.2006 to 31.03.2007 based on communication received from the AO which talks about the inauguration of the building around the festival of Dusehera. It is also a fact that the assessee was provided adequate opportunity at the time when the Valuation Officer issued notice to the assessee u/s 142A dated 15.07.2014, subsequently at the time of inspection on 16.12.2014 where the assessee s husband and representative was present and subsequently, after the valuation report was finalized and a copy thereof sent to the assessee. We find that on none of the occasions, the assessee has raised or filed any objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t mentioned therein, whereas as per the valuation report dated 23.01.2015 of the Valuation Officer, the Pawan Tower was consisting of basement, ground floor and four stories upon ground floor as per the following details: S. No. Description Quantity (in sqm) Rate (Rs./Sqm) Amount (Rs.) A RCC Framed structure Building 1. Basement Floor (Floor Height 3.27 meters) 222.74 9872 2192229 2. Ground Floor 222.74 7827 1743386 3. First Floor 238.70 7045 1681642 4. Second Floor 238.70 7 047 1681642 5. Third Floor 238.70 7827 1868305 6. Fourth Floor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awan Tower as estimated by the Valuation Officer. Further, the appellant has not furnished any explanation regarding the source of investment thereof either at the assessment stage or at the appellate stage. Therefore, the only irresistible conclusion is that the appellant has made unexplained investment of ₹ 1,14,75,402/- in the construction of Pawan Tower and thus, it is held that the AO was justified in making addition of ₹ 1,14,75,402/- to the income of the appellant for the year under consideration. Hence, the addition of ₹ 1,14,75,042/- made by the AO is hereby sustained. Thus, this ground of appeal is hereby rejected. ( ix) It is noted from the ground of appeal no. 2 and 3 of this appellate order that the AO has enhanced the income of the appellant from house property and job work i.e. the AO has accepted these sources of income of the appellant. Therefore, I do not agree with the findings of the AO that the appellant has no source of income. Further, the appellant has declared investment in land at ₹ 15 lac in its statement of affairs for the year ending on 31.03.2006. The AO has not brought on record any material or evidence to substantiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.01.2006 to 16.04.2008. 19. It was submitted that the Ld. CIT(A) only on the basis of report of DVO has assumed that assessee has constructed altogether new property after demolishing the existing structure during FY 2006-07 whereas the order of Additional Civil Judge, Jaipur proves beyond doubt that during this period, no construction was carried out by the assessee. In fact after purchase of the property on 06.08.2004, assessee did carried out some repair/ renovation work but the officers of Nagar Nigam considered the same to be new construction and threatened to demolish the same. This proves that if any construction was carried out, the same was in the FY 2005-06 relevant to AY 2006-07 and not in the year under consideration. 20. It was submitted that from the above evidence, it is evident that there is no basis with the AO to refer the matter of determination of cost of construction of the property to the DVO as pertaining to FY 2006-07. Thus, the valuation made by DVO for FY 2006-07 is without basis more particularly when the AO of Sh. RameshwarLal Kumawat, husband of the assessee has considered the alleged construction as pertaining to FY 2005-06 and thus made additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of construction of the subject building Pawan Towers . 23. We have purused the agreement to sell dated 8.8.2004 signed between the seller and the assessee which is available at APB pages 25- 28 and it talks about plot of land measuring 400 sq mts having residential building, 4 shops and boundary wall. There is no description of total constructed area of the residential building, no. of the floors, etc. The report of the DVO, based on inspection physically carried out on 16.12.2014, however is more specific and talks about total constructed area of 1185.58 sq. mt having basement, ground and four floors and it doesn t talk about four shops. 24. We have also gone through the stay order passed by the ld. Additional Civil Judge on petition filed by the assessee against Jaipur Nagar Nigam dated 16.04.2008. In its petition dated 17.01.2006, the assessee has submitted that officials of the Jaipur Nagar Nigam have threatened to stop the repair work being carried out at her old constructed house and to demolish the said house and has thus requested for stay order against any such action by the Jaipur Nagar Nigam. In reply to the appellant s petition, the respondent, Jaipur Nagar Nigam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the appellant, and the respondent failed to prove the Government ownership, it was held that the respondent have to follow the due process of law to get the disputed property vacated and till then, stay was granted against any demolition or peaceful occupation and use of the said property. 26. Now, coming to another contention of the ld AR s that the assessee has not carried out any construction on the property between 12.01.2006, the time of moving the petition before the the ld. Additional Civil Judge for obtaining the stay order against the respondent, and the date of passing of the stay order on 16.04.2008, we find that firstly, there is no restrained order against carrying any construction/repair issued by the respondent, Jaipur Nagar Nigam, which is available on record, rather what we find is that there was threat perception, as apparent from the appellant s petition, from the officials of the Jaipur Nagar Nigam against which the appellant moved the subject stay petition. Secondly, there is nothing on record in terms of interim stay order, as to not carry on any construction activity, issued by ld. Additional Civil Judge till disposal of the stay petition. Therefore, ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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