TMI Blog1985 (7) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... he normal construction for which schedules were available, the Departmental valuer had over valued the property by as much as Rs. 92,709. The main plank of argument of the authorised representative before the CIT(A) was that the valuation of the Departmental Valuer in respect of the extra items was exhorbitant but he has no objection in regard to the valuation of the super structure which according to him was based on scheduled rates. The CIT(A) after considering the submission of the authorised representative held as under: "I have carefully considered the various objections led by the ld. counsel As regards marble work for wall lining, and white marble floors, the Departmental Valuer has estimated the cost at Rs. 274 and Rs. 207 per sq. metre against Rs. 25 by the registered valuer. The Registered valuer certainly has grossly under stated this value in as much as Rs. 25 per sq. mt. Could work out to Rs. 25 per sq. ft. This is a rediculous in as much as even labour charges during the period were much higher than this rate. The appellant has produced certain vouchers in respect of purchases of marble by the appellant's husband during the period of construction. The marble tiles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the appellant that except the front walls all other walls were already there when the plot was purchased. The Departmental Valuer has not given any finding that the wall had duly been constructed by the appellant. It is not known how the IAC while approving the order under s. 144B observed that the walls were not the same as existed earlier. On the facts of the case, the cost of these walls has to be excluded not having incurred in the course of construction giving the appellant a relief of Rs. 8784. The excess cost on the above items would be Rs. 4625—Rs. 1264—Rs. 7790—Rs. 4400—Rs. 2200—8784—28,863. As regards the deduction for self supervision, there are number of Tribunal's decisions wherein it has been held that the savings on account of personal supervision would be normally of the order of 10 per cent. The Tribunal in the case of ITO vs. Jagat Prakash Chandra Saxena held that such deduction should be allowed at 10 per cent of the cost and as regards the architect fees, in the absence of any evidence that full time architect had been employed, such cost can reasonably be estimated at 1 per cent of the total cost. As regards other party items, there does not appear to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative, therefore, has no force. 6. As regards architect fee it may be pointed out that the assessee on account of her personal relationship with the Architect did not pay any architect fee except for the original drawings and he had only claimed a small amount of Rs. 2,400 as architect fee. Considering the superior quality of the construction and the relationship of the assessee with the Architect, we deem it proper that architect fee ought to have been allowed in the assessee's case. We, therefore, allowed architect fee to the extent of Rs. 2,400. Since the appellant has disclosed the value of the construction at Rs. 2,07,000 only after keeping into account of the cost of construction worked out by the CIT (A) an addition of Rs. 36,600 remained unexplained. 7. The authorised representative further contended before us that the cost of extra items had been grossly over estimated by the Departmental valuer. He has drawn our attention towards the comparative chart of the two valuers. We have considered the submission of the authorised representative and have also through the superior quality of construction in respect of Kota stone flooring, mosaic flooring polyvinyl chloride t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed representative observed as under: "I have considered these contention. And though I find that for the reasons given by the ITO the disallowance is unsustainable, however, on the facts otherwise collected in the course of appellate proceedings justify the addition. Simply because returns had not been filed is no ground to withhold the explanation for the source of investment when the earning of income is not denied. However, I find that the appellant's husband Shri O. P. Grover who is normally claimed to be maintaining the household had withdrawn a sum of Rs. 18,000 for the household expenses in the earlier year. For the two years under consideration, in the first year there was no withdrawal by him whereas in the second year the withdrawal was only Rs. 10,000. It shows that the income earned by the appellant had been utilised to meet the household expenses and, therefore, this sum was not available for to meet the house investment in house property. On this facts, I hold that the ITO was justified in not giving the set off of Rs. 21,400 against the investment in the property." 9. On the other hand, the Departmental Representative contended before us that the assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eptance of a loan of Rs. 1,10,000 from the appellant's mother-in-law for the purpose of construction of the house. The case of the appellant is that she had borrowed a sum of Rs. 1,10,000 form her mother-in-law and in support thereof she filed a confirmatory letter issued by Smt. Saraswati Devi. It was also contended that over a period of years from 1977 to 1980 the loan was granted in piece-meal. Proceeding further, it was contended by the authorised representative that Smt. Saraswati Devi had the capacity to advance loan a she was regularly assessed to income-tax on a substantial income in the past faw years. the authorised representative proceeding further contended before us that the authorities below not justified in rejecting the plea of the assessee regarding advancement of loan and its investment in the house when the assessee had proved the source of loan as well as its advancement by way of filing the confirmatory letter. The ITO rejected the claim of assessee in this regard. The appeal was dismissed and the CIT(A) observed as under: I have considered these contentions but find no merit in the same. There various factors to suggest that Smt. Sarawati Devi, the mother-i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ody's experience that any body staying in a town like Lucknow which is rather unsafe from security point of view that a person who would be keeping such a large sum of money at home. From all angles only one conclusion can be drawn that the loan is a made up story and not a fact. The appellant has only tried to explain the source of investment taking shelter under loan from her mother-in-law. I am, therefore, fully convinced that the ITO had rightly rejected the genuineness of this loan and I do not find any reason to interfere." The authorised representative contended before us that Smt. Saraswati Devi (deceased) mother-in-law and the assessee (daughter-in-law) had good relations and in the estate duty return the loan was shown by deceased Saraswati Devi and it shows that she had a capacity to advance the loan. It was further contended that Smt. Saraswati Devi (deceased) had 30 tolas of gold with her and she sold it and in 1977 the value of the gold was about Rs. 30,000 and thus the had sufficient source with her to advance the loan. 12. On the other hand the Departmental Representative contended before us that the husband of Smt. Saraswati Devi died in 1949 and she had seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d income of Rs. 7,000 Rs. 8,000 and Rs. 9,000 and that would go to show that she was not assessed to tax on a higher income and as such on the basis of the returned figure it cannot be presumed that she was having sufficient means and was also capable to advancing such a huge loan. The Departmental Representative at the time of argument pointed out that the assessee is the second wife of Shri V. P. Grover and Smt. Saraswati Devi was very much annoyed and the children of Shri V. P. Grover from the first wife were living with Smt. Saraswati Devi and under these circumstances the relation was strained and there was no occasion for Smt. Saraswati Devi to have advanced the loan. The authorised representative, however, supplemented his plank of argument by showing that is true that Smt. Saraswati Devi was angry with assessee only at the time of marriage and in due course the relationship balance cordial. But there is nothing on record to show that Smt. Saraswati Devi had cordial relations with the assessee at the time of construction of the house. If it was so why the children from the first wife were living with Smt. Saraswati Devi. It goes further to establish that there is no force in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause in such a circumstances a widow would not like to keep such a huge amount ranging more than a lakh at her place. Having considered all the facts and circumstances of the case as pointed out above, we are of the opinion opinion that the ld. CIT(A) has rightly disbelieved the case of the assessee. The authorised representative before us requested that the matter may be remitted back to the ITO so as to provide adequate opportunity to him to prove his case. This argument, in our opinion, is of no avail for the reason that the ITO had granted a number of opportunities to the assessee to prove the source and to lead evidence, and the same was not availed. It is clear from the order-sheet as referred to above that a number of opportunities were given from 22nd Dec., 1982 onwards but the assessee did not avail this opportunities for the reasons best known to him and on the other hand a dilatory tactics was adopted to delay the proceedings. Under these circumstances, it is not proper to consider the request of the authorised representative. In view of the aforesaid discussion, we are of the opinion that the order of the CIT(A) is based on sound reasons and we do not find anything on r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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