TMI Blog1978 (11) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the said house, the ITO had two reports before him, one from the S.D.O., P.W.D., giving the estimated cost of the house as Rs. 87,668 and the other from the income-tax inspector giving the cost of construction as Rs. 1,06,846. The ITO made an addition of Rs. 15,000 as being the assessee's unexplained investment in house property, after noting that the assessee had agreed to the said addition. The said addition of Rs. 15,000 was assailed by the assessee on appeal before the AAC. It was contended by the assessee that the construction of the house in question was completed only during the year ending 31 st March, 1971, and that the total cost of construction was Rs. 98,152. He explained that since he had actually spent Rs. 15,000 ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the cost of construction ?" After hearing the learned counsel for the parties, we are of the opinion that both these questions of law referred to us have to be answered in the negative and against the revenue. As regards the first question, it cannot be held as a matter of law that the remedy of appeal provided by the provisions of s. 246(1)(c) of the Act cannot be availed of by the assessee without having filed a rectification application before the ITO in a case where the order of the ITO shows that the assessee agreed to the addition in the income. There is no provision in the I.T. Act, wherein the remedy of appeal against the order of the ITO or against the order of the AAC is barred if the impugned orders make mention that the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the relief in appeal. In the case in hand, the order of the ITO no doubt makes mention that, after discussion, the assessee agreed that an addition of Rs. 15,000 may be made in his income from other sources towards the cost of construction, but this was sought to be explained by the assessee that he understood that the amount of Rs. 15,000 was spent by him in the year succeeding the year of assessment. The assessee sought to explain that he never understood that this amount will be added to the income in the assessment year in question. This explanation was accepted by the AAC. The AAC further took notice of the fact that the assessee had shown the cost of construction of Rs. 83,000 in the year 1970-71 and another Rs. 15,000 in the year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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