Law:

Section:

Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 1988-89 - Whether, where while fixing cost of construction of building and granting relief to assessee qua addition made on account of unexplained investment therein, Tribunal had considered each and every piece of material furnished by assessee, including objections to valuation made by departmental valuer and cost of construction assessed by Assessing Officer, relief granted by Tribunal was reasonable and there was no ground to grant any further relief - Held, yes FACTS The assessee-firm, constructed a hotel building over a period of eight years from 1983 to 1991. The cost of construction furnished by the assessee, as per report of registered valuer with reference to PWD rates, was Rs. 41,55,500 as against Rs. 39,78,765 shown in the account books. The Assessing Officer got its valuation done by departmental valuer who estimated the cost of Rs. 90,53,600 adopting the plinth area method. The difference between the valuation done by the departmental valuer and the cost of construction recorded in the accounts, was added back to the assessee's income under the head 'Other sources'. On appeal, the Commissioner (Appeals) set aside the assessment and remanded it for fresh determination. The Assessing Officer reduced the cost of construction to Rs. 77,14,141 and, accordingly, reduced income on account of unexplained investment. On appeal, the Commissioner (Appeals) granted partial relief and reduced the said addition. On second appeal, the Tribunal considered the report of the departmental valuation officer, the objections filed by the assessee, the clarification given by the valuation officer and reduced the cost of construction substantially, which was fixed at Rs. 55,21,723 resulting in further reduction in addition on account of unexplained investment. On appeal, the assessee had contended that the authorities were not justified in adopting the plinth area method instead of the actual cost depicted in its books of account and that the Tribunal had not considered the statement given by it regarding the valuation done by the same departmental valuer of other buildings in the vicinity…

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