TMI Blog2003 (5) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... idate the correctness of the cost of construction and thus the AO has rightly obtained the valuation report. 2. That the learned CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,26,882 made on account of unexplained investment in cold storage (IIIrd chamber) without properly appreciating the facts of the case." 3. Briefly stated, facts are that the assessee-company during the year under consideration constructed third chamber in the cold storage in respect of which the cost shown in the books was at Rs. 25,49,118. According to the registered valuer's report dt. 9th Dec., 1991, the investment was worked out at Rs. 25,10,250. The case was referred to Departmental valuation cell who vide its report dt. 17th Nov., 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the DVO. There does not appear to be any justification for making addition for contingencies at a flat rate of 3 per cent. Similarly, the explanation that no cost was incurred on preparation of drawings was also acceptable. It was not a new construction but only extension over existing construction. Similarly, various appellate authorities had considered deduction at 10 per cent for self-supervision instead of 7.5 per cent as reasonable. Thus, the estimate of DVO is liable to be reduced by Rs. 1,72,693. Therefore, the difference between the assessee's books and DVO's report came to Rs. 54,189 which can be said to be insignificant in the matters of estimate. A reliance in this connection has been made to the Special Bench decision of Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction. Thus, the AO has rightly obtained the valuation report. A reliance in this connection has been made to the decision of Tribunal, Agra Bench, in the case of Das's Friends Builders (P) Ltd. (ITA No. 283/Agra/2000). 6. The learned Departmental Representative has further submitted that since there was difference in the cost estimated by the DVO and shown by the assessee, the AO was justified to make addition on account of unexplained investment in the cold storage. A reliance in this connection has been made to the decision in Smt. Shashi Devi vs. ITO Ors. (1999) 154 CTR (MP) 1 and Daulatram Ors. vs. ITO Ors. (1990) 90 CTR (AP) 152 : (1990) 181 ITR 119 (AP) and 156 Taxation 130 (sic). 7. On the other hand, the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted there remains balance of difference of Rs. 54,189 which fall within the marginal cost which can be ignored. Thus, he has supported the order passed by the learned CIT(A). 8. We have heard the parties and perused the records of the case. We find force in the argument of the learned Departmental Representative that CIT(A) was not justified in observing that there is no provision to obtain valuation report in the case of construction of the building inasmuch as in the case of Das's Friends Builders (P) Ltd., Tribunal, Agra, has held that "by virtue of provision under s. 131(1)(d) the AO has got powers to issue commission for the purposes of obtaining information in respect of income or loss. Such commission could be issued for seek ..... X X X X Extracts X X X X X X X X Extracts X X X X
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