Law:

Section:

Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment years 1988-89 to 1990-91 - Whether finding determining cost of construction of building is a pure question of fact, particularly when cost of construction is arrived at on an estimated basis - Held, yes - While estimating cost of construction of building, Tribunal adopted CPWD rates and granted reduction at rate of 15 per cent on that rate - Further reduction of 11 per cent on cost of services provided in building, namely, water supply, sanitation and electricity installation was granted - Assessee failed to show that reduction of 15 per cent on cost of construction and 15 per cent on cost of services was adopted in all other similar cases - Assessee also failed to show how adoption of rate by Tribunal was arbitrary, unreasonable or perverse - Whether it is not necessary to adopt uniform rate for granting reduction - Held, yes - Whether no question of law arose from order of Tribunal requiring interference by High Court - Held, yes FACTS During the assessment proceedings, the Assessing Officer held that difference in amount between the cost of construction as estimated by the assessee and the value as determined by the Departmental Valuation Officer would represent the unexplained investment of the assessee and, therefore, added the same to the assessee's income. On appeal, the Commissioner (Appeals) rejected books of account maintained by the assessee, but granted some reduction. On further appeal, the Tribunal gave reduction in the cost of services provided in the building. On further appeal, the Tribunal adopted CPWD rates and granted reduction at the rate of 15 per cent. The Tribunal further granted reduction of 11 per cent on cost of services provided in the building, namely, water supply, sanitation and electricity installation, etc. The difference was added back to the assessee's income as unexplained income. On appeal : HELD The Tribunal had taken into account the nature of the building, the location of building and also took into account that the deduction was already granted on account of self-supervision and then it held that the deduction of 15 per cent on the CPWD rates…

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