TMI Blog2020 (4) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... was done in the presence of Inspector of Department. Therefore, the objection relating to DVO Report is not correct hence, it is not acceptable. Further, seen that the construction was started from 1996-97 and reached finality in the A.Y. 1999-2000. The assessee has not shown any work in progress as no return for A.Y. 1996-97 to 1999-2000 has been ever filed. - As per the records, the assessee has shown project completion method, hence, the profit is liable to be taxed in the assessment year under consideration only , hence, we hold the same. In the Registered Valuer report, the assessee shown rate of construction at 325 per Sq. Ft. for the total construction area of 16980 sq. Ft. However, these figures are not supported by the books of accounts as the assessee failed to produce any books of accounts before the income-tax authorities as well as DVO. The assessee has not cooperated with DVO also nor filed any details. The assessee has not established its claim of cost by producing books of accounts before the AO. In such circumstances and non corporative attitude of the assessee, the AO could not do justice with the assessee. The assessee himself has total cost at ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. (PB-23). Therefore, the learned counsel for the assessee contended that reference to DVO could be made when assessment proceedings are pending. In the case of there was no proceedings were pending hence, reference to DVO was not valid. Further, the reopening of assessment has been done based on DVO report which is not valid in the light of following judgements; Me Mummy Hospital v. ACIT [2014] 107 DTR (Gujarat) 209 (PB-104) CIT v. Baldev Plaza [2013] 94 DTR (All) 313, (PB-113), ITO v. Nisarg Co-op Housing Society Ltd. [2011] 48 SOT 136 (Ahmedabad-Trib) PB-122) , CIT v. Umiya Coop Housing Society Ltd. [2009] 314 ITR 272 (Gujarat) (PB-124), Manjusha Estate Pvt. Ltd. v. ITO [2009] 314 ITR 263 (Gujarat) and ITO v. Agencies Rajasthan (P) Ltd. [ 2008] 117 (JP) 542(PB-136) contended that the AO did not have authority to refer the matter to DVO under section 131 (1)(d) of the Act on 06.08.1999 when no proceedings were pending on the date neither any return was filed nor any notice under section 148 of the Act was issued by the AO to the assessee by that date , re-opening as well as additions were not sustainable. However, the ld. CIT (A) while dealing the issue held that that issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent made in construction of M/s. Deeplaxmi Project, which was constructed by the assessee i.e. M/s. Ashadeep Developers. 5. We have heard the rival submissions and perused the relevant material on record. We find that the learned counsel for the assessee has not made any submission as to why this additional ground was not raised while filing of appeal before tribunal except saying that it is legal ground. Nor any affidavit is filed before for spelling reasons and justification of admission of additional ground and why not raised at first instance at the time of filing of appeal. Therefore, in such circumstances, the additional ground raised now by the assessee is not admissible, as the learned counsel for the assessee has not made out a case as to why this should be admitted. Even on merits, we further find that while finalizing assessment in the case of M/s. Deep Laxmi Apartment, it was submitted before him that cost of construction of said project was at ₹ 36 Lakh. Therefore, to elucidate the fair market value of the said project a reference was made by the AO of M/s. Deep Laxmi Apartment vide letter dated 06.08.1999 to DVO Ahmedabad to ascertain cost of construction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd misleading facts and contrary to record. In view of this matter, the additional ground is neither maintainable as no argument and justification is given and how it has come to be raised in second round of assessment proceedings which was carried out at the behest of Tribunal for supplying reasons for reopening of assessment only, Nor this grounds of appeal was taken before the AO, hence, it is not maintainable in law and also liable to be dismissed on merits due to facts as discussed above. The reliance by the Learned Counsel on various case laws cited above are not applicable as the facts of the present case entirely different as laid down in those case laws, and hence, we are not discussing each case laws as each case has its different facts. Therefore, additional ground of appeal is accordingly, dismissed. 6. Regular grounds of appeal:(I) Ground No. (1) relates to confirming addition of ₹ 39,48,225 being difference between the value determined by the DVO at ₹ 71,71,225 and ₹ 36,00,64,541. Ground No. (2) Without prejudice to above that when construction was spread over four years i.e. 1996-97 to 1999-2000, there was no justification for making add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. As per the details filed before ITAT following expenses were incurred: Assessment year Land Construction 1996-97 4,40,000 33,05,489 1997-98 23,41,632 1998-98 1,06,508 1999-2000 4,10,912 Total 4,40,000 61,64,541 10. Total area constructed was 16,980 sq.; cost of per Sq. Ft. comes about ₹ 350 sq. ft., which is reasonable at the time. It was mentioned that DVO determined total cost at ₹ 71,71,225 whereas the assessee shown at ₹ 61,64,541 hence, difference is of ₹ 19,96,678 which is less than 15% be ignored. It further submitted that how the figures of ₹ 36, 00, 000 for cost of construction is not clear. It was further claimed that no addition based on valuation report could be made. However, CIT (A) observed figure of cost of construction at ₹ 63,64,541 on the basis of books of accounts cannot be relied upon as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts of the assessee was at ₹ 61,64,541 and not ₹ 36,00,000 and therefore, there was difference of only ₹ 10,07,000 between the cost of construction as shown by the assessee and as determined by the DVO has to be ignored being less than 15% in the light of decision of Hon`ble Supreme Court in the case of C.B Gautam 199 ITR530 (SC) and Nitesh Maheshwari 53 DTR 413. 12. Per contra, the ld. Sr. D.R. vehemently supported the order of lower authorities. She has further submitted that the assessee has not cooperated during original assessment proceedings as well as during set-aside proceedings before the AO. The assessee has not made any compliance to notice issued and produce books of accounts. Hence, lower authorities were justified in making addition in one year. 13. We have heard the rival submissions and perused the relevant material on record. The perusal of original assessment order and fresh assessment order made in compliance to TRIBUNAL order dated 31.01.2012 shows that the assessee has not cooperated in A.Y. assessment proceedings. The assessee has not made any compliance before the AO inspite of having given various notice to him. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition can be made in one year is not tenable as the assessee has not filed any supporting evidence for year wise income and no return of income for assessment years including assessment year under consideration is also not filed. However, the point taken by the Learned Counsel that CPWD rate is to be applied and some weightage be given to cost figures submitted by the assessee. We find that the assessee himself has total cost at ₹ 66,77,000 and expenses at ₹ 65,97,000 of which difference comes to ₹ 87,000 which is the net profit according to the assessee. However, same is also not disclosed as no return of income was filed. Similarly, in such type of project where 21 flats have been constructed, it would be reasonable to adopt Net Profit Rate as applicable to construction business. It is settled law that entire receipts cannot be taxed. In the light of these facts, only net profit is required to be taxed not the entire receipts. Therefore, real income is only to be taxed. We have considered the case laws, relied by the Learned Counsel, but find them not applicable in peculiar circumstances of the case and dealing the case on factual aspect, as the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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