Law:

Section:

Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 1995-96 - Assessee constructed a house and declared cost of construction of same - Assessing Officer in order to find out real value of cost of construction, referred matter to DVO - DVO determined cost of construction at much higher figure than that declared by assessee and, therefore, Assessing Officer made addition on basis of difference between cost of construction determined by Valuation Officer and that declared by assessee - Commissioner (Appeals) accepting assessee's submission that Valuation Officer had estimated cost of construction on basis of CPWD rates and had ignored local PWD rates, granted deduction of 201 per cent from cost so determined by Valuation Officer - Tribunal accepted view taken by Commissioner (Appeals) - Whether Tribunal was justified - Held, yes FACTS The assessee constructed a house and declared the cost of construction of the same. However, the Assessing Officer referred the matter to valuation cell and the Valuation Officer (DVO) determined the cost at a much higher figure than that declared by the assessee. The Assessing Officer made addition on the basis of difference in the cost of construction determined by the Valuation Officer and that declared by the assessee. On appeal, the Commissioner (Appeals) accepting the assessee's contention that the DVO had estimated the cost on CPWD rates basis by ignoring the local PWD rates, reduced the addition by granting 20 per cent deduction in the cost so determined by the DVO. On second appeal, the assessee contended that the Assessing Officer was not entitled to reject the books of account and refer the matter to the DVO. The Tribunal found that the Assessing Officer had already pointed out that the assessee had not maintained proper details for expenses relating to construction and had maintained only self-made vouchers and no supporting vouchers were available for such expenses and under these circumstances, he in order to find out the real value of cost of construction, referred the matter to the DVO and made addition. The Tribunal, accordingly, upheld the order of Commissioner (Appeals). On appeal :…

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