Law:

Section:

Section 251 of the Income-tax Act, 1961, read with rule 46A of Income-tax Rules, 1962 - Commissioner (Appeals) - Powers of - Assessment year 2004-05 - Assessee was an exporter deriving income from manufacture and export of handloom goods - In course of assessment, dispute arose as to correct value of construction of factory - Assessing Officer referred matter to District Valuation Officer (DVO) in whose opinion, cost of construction was much higher than cost declared by assessee in its books of account - Assessing Officer made additions based on report of DVO - On appeal, Commissioner (Appeals) sought a revised report in view of objections of assessee to first report - In revised report, DVO reduced estimated cost of construction given earlier taking into account factor of self-supervision and self-procurement of material by assessee - Commissioner (Appeals) having accepted revised report of DVO, deleted impugned addition - Tribunal upheld order of Commissioner (Appeals) - Whether, on facts, Tribunal rightly upheld finding of Commissioner (Appeals) for admitting additional evidence under rule 46A and giving assessee benefit as per revised report - Held, yes [In favour of assessee] FACTS The assessee was an exporter deriving income from manufacture and export of handloom goods. Dispute arose during the assessment proceedings as to the correct value of the construction of the factory. The Assessing Officer referred the matter to the District Valuation Officer (DVO) in whose opinion, cost of construction was much higher than the cost declared by the assessee in its books of account. Accordingly, the Assessing Officer made additions based on the report of the DVO. On appeal, the Commissioner (Appeals) sought a revised report in view of the objections of the assessee to the first report. This was done in exercise of power under rule 46A of the Income-tax Rules, 1962. In the revised report, the DVO reduced the estimated cost of construction given earlier taking into account the factor of self-supervision and self-procurement of material by the assessee. The DVO, however, did not accept the objections of the assessee under the heads 'Humidification plant' and…

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