J.C.I.T., Range-2, Agra v. Sh. Dinesh Mohan, Agra

ITA 30/AGR/2013 | 2008-2009
Pronouncement Date: 19-07-2013 | Result: Dismissed

Appeal Details

RSA Number 3020314 RSA 2013
Assessee PAN AHDPM3870G
Bench Agra
Appeal Number ITA 30/AGR/2013
Duration Of Justice 5 month(s) 26 day(s)
Appellant J.C.I.T., Range-2, Agra
Respondent Sh. Dinesh Mohan, Agra
Appeal Type Income Tax Appeal
Pronouncement Date 19-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 19-07-2013
Date Of Final Hearing 09-07-2013
Next Hearing Date 09-07-2013
Assessment Year 2008-2009
Appeal Filed On 24-01-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI A.L. GEHLOT ACCOUNTANT MEMBER ITA NOS.539 & 540/AGRA/2012 ASSESSMENT YEARS: 2008-09 & 2009-10 SHRI DINESH MOHAN VS. DY. COMMISSIONER OF INCOM E TAX PROP. M/S. DINESH ABHUSHAN BHANDAR CIRCLE-2 AGRA. 22 RAM NAGAR COLONY AGRA. (PAN: AHDPM 3870 G) ITA NOS.30 & 31/AGRA/2013 ASSESSMENT YEARS: 2008-09 & 2009-10 DY. COMMISSIONER OF INCOME TAX VS. SHRI DINESH MOH AN CIRCLE-2 AGRA. PROP. M/S. DINESH ABHUSHAN BHAN DAR 29/131 CHAPETTI RAJA MANDI COLONY AGRA. (PAN: AHDPM 3870 G) (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI R.K. AGARWAL & SHRI RAHUL AGARWAL ADVOCATES REVENUE BY : SHRI K.K. MISHRA JR. D.R. DATE OF HEARING : 09.07.2013 DATE OF PRONOUNCEMENT : 19.07.2013 ORDER PER A.L. GEHLOT ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND R EVENUE AGAINST TWO DIFFERENT ORDERS BOTH DATED 31.08.2012 PASSED BY THE LD. CIT(A)-I AGRA FOR THE ASSESSMENT YEARS 2008-09 & 2009-10 RESPECTIVELY. ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEALS :- ITA NO.539/AGRA/2012 BY THE ASSESSEE - FOR A.Y. 2008-09 1. BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1 AGR A (HEREINAFTER REFERRED TO AS CIT(A)) ERRED BOTH IN LAW AND FACTS IN SUSTAINING THE ADDITION OF RS.82476/- IN RESPECT OF INTEREST PAID TO THE BANK AGAINST HOUSING LOAN CLAIMED AS DEDUCTION U/S 24(B) BY THE APPELLANT. 2. BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) WAS NOT LEGALLY JUSTIFIED IN HOLDING THE REF ERENCE MADE BY THE ASSESSING OFFICER U/S 142A AS VALID. LD. CIT(A) FA ILED TO APPRECIATE THAT WITHOUT REJECTING BOOKS OF ACCOUNTS THE REFER ENCE U/S 142A WAS WHOLLY ILLEGAL IN VIEW OF AUTHORITATIVE JUDICIAL PR ONOUNCEMENTS. THE REFERENCE TO THE AVO BY ASSESSING OFFICER WAS WITHO UT APPLICATION OF HIS MIND AND VIOLATIVE OF THE PRINCIPLES OF NATURAL JUSTICE. 3. BECAUSE ON THE FACTS AND CIRCUMSTANCES LD. CIT( A) WAS NOT LEGALLY JUSTIFIED IN SUSTAINING ADDITION ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION DECLARED BY THE APPELLANT AND THE V ALUATION ARRIVED AT BY THE AVO. THE LD. CIT(A) GROSSLY ERRED IN ACCEPT ING THE 3 RD REVISED ESTIMATE OF THE AVO SUBJECT TO REDUCTION/DIRECTION CONTAINED IN THE IMPUGNED ORDER. 4. BECAUSE ON THE FACTS AND CIRCUMSTANCES THE LD. CIT(A) GROSSLY ERRED IN LAW WHILE ADOPTING FRIVOLOUS ESTIMATE MADE BY THE AVO. LD. CIT(A) FAILED TO APPRECIATE THE OBJECTIONS OF THE A PPELLANT MADE AGAINST THE MALAFIDE REPORT OF THE AVO WITH CONJECT URES AND SURMISES. 5. BECAUSE ON THE FACTS AND CIRCUMSTANCES THE ADDI TION CONFIRMED BY LD. CIT(A) IN THE IMPUGNED ORDER IN RESPECT OF U NEXPLAINED INVESTMENT IN THE CONSTRUCTION OF HOUSE IS WHOLLY U NJUSTIFIED AND UNLAWFUL. 6. BECAUSE IN ANY CASE THE ORDER IS AGAINST LAW AN D FACTS. 7. BECAUSE THE APPELLANT CRAVES LEAVE TO ALTER/MODI FY GROUNDS BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 3 ITA NO.540/AGRA/2012 BY THE ASSESSEE - FOR THE A .Y. 2009-10 1. BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) WAS NOT LEGALLY JUSTIFIED IN HOLDING THE REF ERENCE MADE BY THE ASSESSING OFFICER U/S 142A AS VALID. LD. CIT(A) FA ILED TO APPRECIATE THAT WITHOUT REJECTING BOOKS OF ACCOUNTS THE REFER ENCE U/S 142A WAS WHOLLY ILLEGAL IN VIEW OF AUTHORITATIVE JUDICIAL PR ONOUNCEMENTS. THE REFERENCE TO THE AVO BY ASSESSING OFFICER WAS WITHO UT APPLICATION OF HIS MIND AND VIOLATIVE OF THE PRINCIPLES OF NATURAL JUSTICE. 2. BECAUSE ON THE FACTS AND CIRCUMSTANCES LD. CIT( A) WAS NOT LEGALLY JUSTIFIED IN SUSTAINING ADDITION ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION DECLARED BY THE APPELLANT AND THE V ALUATION ARRIVED AT BY THE AVO. THE LD. CIT(A) GROSSLY ERRED IN ACCEPT ING THE 3 RD REVISED ESTIMATE OF THE AVO SUBJECT TO REDUCTION/DIRECTION CONTAINED IN THE IMPUGNED ORDER. 3. BECAUSE ON THE FACTS AND CIRCUMSTANCES THE LD. CIT(A) GROSSLY ERRED IN LAW WHILE ADOPTING FRIVOLOUS ESTIMATE MADE BY THE AVO. LD. CIT(A) FAILED TO APPRECIATE THE OBJECTIONS OF THE A PPELLANT MADE AGAINST THE MALAFIDE REPORT OF THE AVO WITH CONJECT URES AND SURMISES. 4. BECAUSE ON THE FACTS AND CIRCUMSTANCES THE ADDI TION CONFIRMED BY LD. CIT(A) IN THE IMPUGNED ORDER IN RESPECT OF U NEXPLAINED INVESTMENT IN THE CONSTRUCTION OF HOUSE IS WHOLLY U NJUSTIFIED AND UNLAWFUL. 5. BECAUSE IN ANY CASE THE ORDER IS AGAINST LAW AN D FACTS. 6. BECAUSE THE APPELLANT CRAVES LEAVE TO ALTER/MODI FY GROUNDS BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEALS :- ITA NO.30/AGRA/2013 BY THE REVENUE - FOR A.Y. 20 08-09 1. THAT THE LD. CIT(A)-I AGRA HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION OF RS.529 040/- ON ACCOUNT OF INTEREST DISALLOWED ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 4 U/S 36(1)(III) AS THE LOAN USED IN NON BUSINESS PUR POSE BY NOT APPRECIATING THE FACTS. 2. THAT THE LD. CIT(A)-I AGRA HAS ERRED BY ALLOWIN G REBATE FOR SELF SUPERVISION UPTO THE EXTENT OF RS.10% OF TOTAL CONSTRUCTION COST WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR DELETE OR ALTER OR MODIFY ANY ONE OR MORE GROUND(S) OF APPEAL DURING T HE APPELLATE PROCEEDINGS. 4. THAT THE ORDER OF THE CIT(A)-I AGRA BEING ERRON EOUS IN LAW AND ON FACTS BE SET ASIDE AND THAT THE ORDER OF THE ASSESSING OFFICER BE RESTORED. ITA NO.31/AGRA/2013 BY THE REVENUE - FOR A.Y. 200 9-10 1. THAT THE LD. CIT(A)-I AGRA HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION OF RS.529 040/- ON ACCOUNT OF INTEREST DISALLOWED U/S 36(1)(III) AS THE LOAN USED IN NON BUSINESS PUR POSE BY NOT APPRECIATING THE FACTS. 2. THAT THE LD. CIT(A)-I AGRA HAS ERRED BY ALLOWIN G REBATE FOR SELF SUPERVISION UPTO THE EXTENT OF RS.10% OF TOTAL CONSTRUCTION COST WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR DELETE OR ALTER OR MODIFY ANY ONE OR MORE GROUND(S) OF APPEAL DURING T HE APPELLATE PROCEEDINGS. ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 5 4. THAT THE ORDER OF THE CIT(A)-I AGRA BEING ERRON EOUS IN LAW AND ON FACTS BE SET ASIDE AND THAT THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 4. FIRST WE TAKE UP APPEALS FILED BY THE ASSESSEE I .E. ITA NOS.539 & 540/AGRA/2012. 5. THE ASSESSEE HAS RAISED COMMON GROUNDS IN BOTH T HE APPEALS BASED ON IDENTICAL SET OF FACTS. THE LD. AUTHORISED REPRESE NTATIVE SUBMITTED THAT THE FACTS OF THE CASE LEAD IN A.Y. 2008-09. HOWEVER THE ASSESS EE HAS ALSO PRAYED FOR ADMISSION OF MODIFIED GROUNDS WHICH READS AS UNDER :- 3. BECAUSE ON THE FACTS AND CIRCUMSTANCES LD. CIT (A)-1 AGRA WAS NOT LEGALLY JUSTIFIED IN SUSTAINING AN ADDITION OF RS.27 04 542/- ON ACCOUNT OF DIFFERENCE IN THE COST OF CONSTRUCTION D ECLARED BY THE APPELLANT. 6. SIMILAR GROUND IS RAISED IN A.Y. 2009-10 ALSO. THE AMOUNT OF ADDITION IS RS.12 06 852/-. 7. GROUND NO.1 OF ASSESSEES APPEAL FOR A.Y. 2008-0 9 PERTAIN TO ADDITION IN RESPECT OF INTEREST PAID TO BANK AND CLAIMING DEDUC TION UNDER SECTION 24(B) OF THE ACT. LD. AUTHORISED REPRESENTATIVE HAS NOT PRESSED THIS GROUND OF APPEAL. THEREFORE THE SAME IS DISMISSED NOT PRESSED. HOWE VER THE LD. AUTHORISED ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 6 REPRESENTATIVE MADE SUBMISSION THAT NECESSARY DIREC TION MAY BE ISSUED FOR ALLOWING THE INTEREST CLAIM IN RESPECTIVE YEARS IN WHICH THE ASSESSEE IS ELIGIBLE. 8. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E WE DO NOT FIND SUBSTANCE IN THE SUBMISSION OF LD. AUTHORISED REPRESENTATIVE. HOWEVER THE ASSESSEE IS AT LIBERTY TO TAKE REMEDIAL ACTION IN ACCORDANCE WITH LAW BEFORE APPROPRIATE AUTHORITY. 9. THE FIRST COMMON ISSUE RAISED IN ASSESSEES APPE ALS IN GROUND NO.2 FOR A.Y. 2008-09 AND GROUND NO.1 FOR A.Y. 2009-10 IS PERTAIN ING TO REFERENCE MADE UNDER SECTION 142A OF THE ACT. 10. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE FIRST CONTENTION OF THE LD. AUTHORISED REPRESEN TATIVE WAS THAT THE ASSESSEE MAINTAINED REGULAR BOOKS OF ACCOUNT AND WITHOUT REJ ECTING BOOKS OF ACCOUNT THE A.O. CANNOT MAKE REFERENCE UNDER SECTION 142A OF TH E ACT. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE WE DO NOT FIND SUBSTAN CE IN THE SUBMISSION OF THE LD. AUTHORISED REPRESENTATIVE AS THE ASSESSEE DID NOT M AINTAIN DETAILED CONSTRUCTION ACCOUNT. HE HAS SIMPLY MAINTAINED ACCOUNT WHEREIN LUMP SUM ADVANCE IN CONSTRUCTION HAS BEEN ACCOUNTED FOR. A COPY OF CON STRUCTION ACCOUNT FILED BY THE ASSESSEE HAS BEEN PLACED ON RECORD. IT IS ADMITTED FACT THAT THE ASSESSEE DID NOT MAINTAIN DAY-TO-DAY CONSTRUCTION EXPENDITURE ACCOUN T. IN THE LIGHT OF THE FACT THE BOOKS OF ACCOUNT ARE IMPLIEDLY REJECTED AND THE A.O . HAS RIGHTLY MADE THE ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 7 REFERENCE UNDER SECTION 142A OF THE ACT. THUS THI S CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE IS REJECTED. 11. COMMON ISSUE RAISED IN CROSS APPEALS IS PERTAIN ING TO VALUATION OF CONSTRUCTION OF BUILDING VIDE GROUNDS NO.3 4 5 6 & 7 IN A.Y. 2008-09 AND GROUNDS NO.2 3 4 5 & 6 IN A.Y. 2009-10 IN APPEAL S OF ASSESSEE AND GROUNDS NO.2 3 & 4 IN APPEALS OF REVENUE IN BOTH THE YEARS. 12. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE DERIVES INCOME FROM TRADING OF SILVER ORNAMENTS. DURING THE ASSESSMENT PROCEED INGS THE A.O. NOTICED THAT THE ASSESSEE HAS PURCHASED PROPERTY NO.22 RAM NAGAR CO LONY AGRA ON 17.07.2006 FOR RS.33 60 839/-. AFTER DEMOLISHING THE OLD STRU CTURE HE STARTED CONSTRUCTING NEW HOUSE ON THE SAID PLOT. THE INVESTMENTS MADE B Y THE ASSESSEE IN DIFFERENT YEARS ARE AS UNDER:- (PAGE NOS.2 & 3 OF A.O.) A.Y. AMOUNT OF INVESTMENT 2007-08 RS.33 60 839/- FOR PURCHASE OF PROPERTY 2007-08 RS.3 00 000/- IN CONSTRUCTION 2008-09 RS.21 30 310/- IN CONSTRUCTION 2009-10 RS.9 50 000/- TOTAL RS.67 41 149/- ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 8 13. THE A.O. NOTICED THAT THE DETAILS OF INVESTMENT S ALONG WITH SUPPORTING EVIDENCES WERE NOT FURNISHED. IN VIEW OF THE FACT HE MADE A REFERENCE UNDER SECTION 142A OF THE ACT TO THE VALUATION OFFICER. T HE VALUATION OFFICER DETERMINED THE COST OF CONSTRUCTION AS UNDER :- (A. O. PAGE NO.8) F.Y. COST OF CONSTRUCTION DECLARED BY ASSESSEE COST OF CONSTRUCTION ESTIMATED BY VALUATION OFFICER EXCESS INVESTMENT MADE BY ASSESSEE 2006-07 3 00 000/- 10 04 464/- 7 04 464/- 2007-08 21 30 310/- 71 32 732/- 50 02 422/- 2008-09 9 50 000/- 31 80 803/- 22 30 803/- TOTAL 33 80 000/- (IN ROUND FIGURE) 1 13 18 000/- (IN ROUND FIGURE) 79 38 000/- 14. AFTER CONSIDERING THE ASSESSEES SUBMISSION TH E A.O. FOUND DIFFERENCE IN COST OF INVESTMENT SHOWN BY THE ASSESSEE AND THE CO ST ESTIMATED BY THE VALUATION OFFICER OF WHICH CALCULATION COMES TO RS.50 02 422/ - IN A.Y. 2008-09. THE A.O. MADE ADDITION OF RS.50 02 422/- UNDER SECTION 69B O F THE ACT FOR A.Y. 2008-09. SIMILAR TYPE OF ADDITION WAS MADE FOR A.Y. 2009-10 AT RS.22 30 803/-. THE ASSESSEE CHALLENGED THE ORDER OF A.O. BEFORE THE CI T(A) ON VARIOUS GROUNDS. ON THE BASIS OF SUBMISSION OF THE ASSESSEE THE CIT(A) OBTAINED FRESH VALUATION REPORT DATED 24.01.2012 WHEREIN THE VALUATION OFFICER HAS ESTIMATED THE VALUE OF ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 9 RS.97 13 728/- AS AGAINST EARLIER VALUATION REPORT DATED 28.12.2010 VALUED AT RS.1 13 18 000/-. A FURTHER CONFIDENTIAL ABSTRACT OF COST OF VALUATION OFFICER DATED 11.07.2012 THAT IS THIRD REPORT WAS OBTAINED BY THE CIT(A) WHEREIN VALUE WAS ESTIMATED AT RS.88 08 680/-. FURTHER THE VALUATION REPORT WAS REVIEWED BY THE VALUATION OFFICER AND FURNISHED HIS REPORT ON 09.08 .2012 VALUING AT RS.86 34 094/. THE CIT(A) DIRECTED THE A.O. TO MAKE THE ADJUSTMENT IN THE FINAL VALUATION REPORT SUBMITTED BY THE VALUATION OFFICER ESTIMATING VALUA TION OF RS.86 34 094/-. THE RELEVANT FINDING OF CIT(A) IS REPRODUCED AS UNDER : - (PARAGRAPH NO.6.30 PAGE NOS.33 & 34) 6.30 IN VIEW OF MY DECISIONS RELATING TO VALUAT ION OF THE HOUSE PROPERTY AS DISCUSSED ON PREVIOUS PAGES THE VALUAT ION REPORT OF THE AVO DATED 09.08.2012 DETERMINING THE COST OF CONSTR UCTION AT RS.86 34 094/- SHOULD BE FURTHER MODIFIED KEEPING I N VIEW THE INSTRUCTION OF THE VO ISSUED VIDE HIS LETTER DATED 02.07.2012 WHICH HAS NOT BEEN INCORPORATED BY THE AVO AND THE DECISI ON OF HONBLE JURISDICTIONAL ALLAHABAD HIGH COURT AND THE JURISDI CTIONAL ITAT AGRA AS SUMMARIZED BELOW : 1. THE VALUE OF BASEMENT GROUND FLOOR FIRST FLOOR SECOND FLOOR AND RCC PROJECTIONS DETERMINED AT PLINTH AREA RATE OF CPWD SHOULD BE FURTHER REDUCED BY 10% TO MAKE THIS VALUE COMMENSURATE WITH THE RATE OF UPPWD AS DIRECTED IN PARA NO.6.26 ABOVE. 2. VALUE OF EXTRA ITEMS SHOULD BE COMPUTED CORRECTL Y BY APPLYING THE CORRECT RATE AS AVAILABLE IN THE MARKE T AT THAT TIME INSTEAD OF HYPOTHETICALLY ENHANCED RATE ADOPTED BY THE AVO AS DIRECTED IN PARA NO.6.28 ABOVE. ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 10 3. DEDUCTION FOR SALVAGE VALUE OF OLD DISMANTLED MA TERIAL SHOULD BE PROVIDED AS PER THE DIRECTIONS GIVEN IN P ARA NO.6.29 ABOVE. 4. REBATE FOR SELF SUPERVISION SHOULD BE GIVEN AT 1 0% OF TOTAL CONSTRUCTION COST INCLUDING COST OF THE BUILD ING AND THE EXTRA ITEMS AS DIRECTED IN PARA NO.6.27 ABOVE. 5. ADDITION FOR ARCHITECT/CONSULTANT FEE SHOULD BE MADE AT RS.1 LAC AS GIVEN IN THE VALUATION REPORT OF THE AV O. AFTER RE-COMPUTING THE COST OF CONSTRUCTION OF THE BUILDING KEEPING IN VIEW MY ABOVE DIRECTIONS THE VALUE OF T HE COST OF CONSTRUCTION OF THE HOUSE PROPERTY SHOULD BE DETERM INED FOR THREE YEARS I.E. A.Y. 2007-08 2008-09 AND 2009-10 IN THE SAME PROPORTION AS IT HAS BEEN DONE IN THE FIRST VALUATION REPORT A ND ADOPTED IN THE ASSESSMENT ORDER. AFTER ASCERTAINING THE VALUE OF THE COST OF CONSTRUCTION FOR THE ASSESSMENT YEAR 2008-09 BY DIV IDING THE TOTAL COST OF CONSTRUCTION IN THREE ASSESSMENT YEARS AS D IRECTED ABOVE THE EXCESS COST OF CONSTRUCTION SHOULD BE DETERMINED FO R MAKING NECESSARY ADDITION U/S.69B IN THIS ASSESSMENT YEAR. AS THE TOTAL COST OF CONSTRUCTION HAS ALREADY BEEN REDUCED EVEN AS PE R THE MODIFIED REPORT OF THE AVO FROM RS.1 13 18 000/- DETERMINED IN FIRST VALUATION REPORT SUBMITTED AT THE TIME OF ASSESSMENT PROCEEDI NGS TO RS.86 34 094/- AS DETERMINED IN HIS SECOND MODIFIED REPORT DATED 09.08.2012 AND IT WOULD BE FURTHER REDUCED AFTER FO LLOWING MY INSTRUCTIONS GIVEN ON PREVIOUS PAGE OF THIS ORDER. GROUND NO.3 & 4 ARE PARTLY ALLOWED OR STATISTICAL PURPOSES. 15. THE LD. AUTHORISED REPETITIVE SUBMITTED THAT TH E ASSESSEE HAS POINTED OUT SPECIFIC INSTANCES REGARDING THE INCORRECTNESS IN E STIMATION OF THE VALUATION BY THE DEPARTMENTAL VALUER. A CHART SUBMITTED BY THE LD. A.R. IS REPRODUCED AS UNDER :- ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 11 AS PER REGISTERED VALUER AS PER AVO CORRECT VALUATI ON AS PER ASSESSEE PARTICULARS AREA RATE @ VALUATION AREA RATE @ VALUA TION AREA RATE @ VALUE AFTER CIT(A)-I BASEMENT GROUND FLOOR FIRST FLOOR SECOND FLOOR PROJECTION 114.17 218.78 162.11 20.70 12.08 5400 5700 5700 4500 1900 724408 1484440 1085731 126265 39406 121.74 261.51 195.01 17.67 - 11506 9095 9095 7270 1550 1400740 2378433 1773616 128461 18724 114.17 218.78 162.11 20.70 12.08 8970 8970 8970 7225 - 1024104 1962456 1454126 149957 18724 3460250 5699974 4609367 EXTRA ITEM 394289 *3283283 774359 LESS : SELF SUPERVISION 3854539 385459 8983257 449163 5383726 538372 3469080 8534094 4845354 ADD. : 2% GEN. SUP./ARCHITECT FEE 69393 100000 100000 3538473 8634094 4945354 LESS : DISMANTLED MATERIAL 210000 - 210000 @ 10% 3328473 @ 5% 8634094 CORRECT VALUE @ 10% 4735354 16. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THERE IS RATE AND AREA DIFFERENCE IN VALUATION REPORT OF A.V.O. IN RESPECT OF BASEMENT GROUND FLOOR FIRST FLOOR SECOND FLOOR AND PROJECTION. THE LD. AUTHOR ISED REPRESENTATIVE SUBMITTED THAT ON THE BASIS OF INCORRECT MEASUREMENT AND RATE THE A.V.O. HAS ESTIMATED HIGHER VALUE OF THE CONSTRUCTION. THE LD. AUTHORIS ED REPRESENTATIVE FURTHER SUBMITTED THAT THE A.V.O. HAS ESTIMATED THE HIGHER VALUE OF THE EXTRA ITEMS. A DETAIL IN THIS REGARD HAS BEEN PLACED AT PAGE NO.69 OF THE ASSESSEES PAPER BOOK. IN ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 12 THE VALUATION REPORT VALUE OF THE EXTRA ITEM HAS B EEN TAKEN AT RS.32 83 283/- WHEREAS THE VALUE OF EXTRA ITEMS IS RS.7 74 359/-. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE TOTAL VALUATION P OINTED OUT TO THE CIT(A) TAKEN BY A.V.O. IN HIS FINAL REPORT WAS RS.47 35 354/-. THE CIT(A) WITHOUT CONSIDERING THESE EXCESSIVE VALUATION HAS ACCEPTED THE A.V.O. S REPORT WHEREIN COST OF CONSTRUCTION WAS ESTIMATED AT RS.86 34 094/-. THE L D. AUTHORISED REPRESENTATIVE SUBMITTED THAT IN THIS WAY THE A.V.O. HAS ESTIMATED THE EXCESS COST. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESS EE HAS DECLARED CONSTRUCTION COST OF RS.33 80 000/- AS AGAINST THE COST ESTIMATE D BY THE A.V.O. AT RS.86 34 094/-. AFTER GIVING EFFECTS OF THE VARIOU S INCORRECTNESS IN THE VALUATION REPORT THE ESTIMATION COMES TO RS.47 35 354/-. TH EREFORE AT THE WORST TOTAL ADDITION CAN BE MADE AT RS.13 55 354/- SUBJECT TO B IFURCATION IN YEARS OF CONSTRUCTIONS A.Y. 2008-09 & 2009-10. 17. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTH ER HAND RELIED UPON THE ORDER OF CIT(A) AND SUBMITTED THAT THE CIT(A) HAS A LREADY GIVEN REASONABLE ESTIMATION CONSIDERING THE ASSESSEES SUBMISSION. THEREFORE THE ORDER OF CIT(A) MAY BE CONFIRMED. 18. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE CRUX OF THE ISSUE RAISED IN CROSS APPEALS PERTA INS TO ESTIMATION OF CONSTRUCTION ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 13 COST. IT IS ADMITTED FACT THAT THE ASSESSEE DID NO T MAINTAIN DAY-TO-DAY CONSTRUCTION ACCOUNT. HOWEVER HE MAINTAINED ACCOUNT AND BILLS PARTIALLY. THE LD. AUTHORISED REPRESENTATIVE HAS POINTED OUT SPECIFIC ITEMS INCLU DING MEASUREMENT AND RATE TAKEN BY THE A.V.O. IN ESTIMATION OF CONSTRUCTION C OST. WE FIND THAT THE CIT(A) HAS TAKEN THE BASIS OF FINAL REPORT OF A.V.O. AT RS .86 34 094/- AND THAT AMOUNT IS TO BE REDUCED BY EFFECT OF THE INSTRUCTION GIVEN BY HI M. THE CONTENTION OF THE ASSESSEE BEFORE US WAS THAT THE CORRECT ESTIMATION COULD BE RS.47 35 354/- INSTEAD OF RS.86 34 094/-. SINCE THE ASSESSEE HAS POINTED OUT SPECIFIC INCORRECTNESS IN ESTIMATION MADE BY THE A.V.O. AND IN SUCH SPECIFIC INCORRECTNESS THE ESTIMATION IS REQUIRED TO BE CONSIDERED ACCORDINGLY. IN PRINCIPL E WE AGREE WITH THE FINDING OF CIT(A) SUBJECT TO SPECIFIC INSTANCES POINTED OUT BY THE LD. AUTHORISED REPRESENTATIVE. WE THEREFORE MODIFY THE ORDER O F CIT(A) TO THAT EXTENT. THE ISSUE IS SENDING BACK TO THE FILE OF A.O. FOR A LIM ITED PURPOSE. THE A.O. IS DIRECTED TO VERIFY THE SPECIFIC INCORRECTNESS POINTED OUT BY THE LD. AUTHORISED REPREHENSIVE IN A.V.O.S REPORT AND AFTER VERIFICATION ESTIMATI ON COST MAY BE TAKEN AT RS.47 35 354/- INSTEAD OF RS.86 34 094/- OR THE OTH ER CORRECT AMOUNT AS THE SAME IS FOUND AFTER VERIFYING THE ASSESSEES SPECIFIC CONTE NTION REGARDING THE INCORRECTNESS OF THE ESTIMATION MADE BY THE A.V.O. WITH THIS MOD IFICATION ORDER OF THE CIT(A) IS CONFIRMED INCLUDING THE DIRECTION GIVEN BY HIM. THUS GROUND NOS.3 4 5 6 & 7 ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 14 AND GROUND NOS.2 3 4 5 & 6 OF ASSESSEES APPEALS FOR A.Y. 2008-09 AND 2009-10 RESPECTIVELY ARE ALLOWED FOR STATISTICAL PURPOSES A S INDICATED ABOVE. 19. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 20. NOW WE ARE TAKING REVENUES APPEALS. THE FIRST COMMON GROUND IS IN RESPECT OF DELETION OF ADDITION OF RS.5 29 040/- EA CH FOR A.Y. 2008-09 & 2009-10 ON ACCOUNT OF DISALLOWANCE OF INTEREST UNDER SECTIO N 36(1)(III) OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS THE A.O. NOTICED THAT TH E ASSESSEE MADE INVESTMENT IN HOUSE CONSTRUCTION AT RS.67 47 149/- TILL 31.03.200 8. THE ASSESSEE HAS TAKEN BANK LOAN OF RS.19 00 000//-. THE LOAN OF RS.24 43 674/ - WAS TAKEN FROM PRIVATE PARTIES. THE ASSESSEE WAS PAYING INTEREST ON LOAN @ 12% AND THE SAME WAS CLAIMED AS EXPENDITURE IN THE PROFIT & LOSS ACCOUNT AMOUNTING TO RS.13 81 387/- IN A.Y. 2008-09. THE A.O. AFTER CONSIDERING THE AS SESSEES SUBMISSION CALCULATED THE AMOUNT OF DISALLOWANCE APPLYING 12% RATE OF INT EREST OF WHICH CALCULATION COMES TO RS.5 29 040/- EACH FOR A.Y. 2008-09 & 2009 -10. THE A.O. DISALLOWED THE INTEREST CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.5 29 040/- UNDER SECTION 36(1)(III) HOLDING THAT THE INTEREST EXPENDITURES W ERE NOT EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE CIT(A ) DELETED THE SAID ADDITION ACCEPTING THE ASSESSEES CONTENTION THAT THE ASSESS EE WAS HAVING SUFFICIENT INTEREST ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 15 FREE FUND. IN ADDITION TO THAT THE CIT(A) HELD TH AT NO NEXUS HAS BEEN BROUGHT ON RECORD BY THE A.O. SHOWING THAT THE BORROWED FUND W AS UTILISED FOR THE PURPOSE OF MAKING INVESTMENT IN CONSTRUCTION OF HOUSE PROPERTY . 21. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE NOTICE THAT THE ASSESSEE WAS HAVING OWN CAPITAL OF RS.79 45 408/- AS ON 31.03.2009 WHICH IS SUFFICIENT TO COVER COST OF CON STRUCTION OF THE PROPERTY. IN THE LIGHT OF VARIOUS ORDERS OF I.T.A.T. AGRA BENCH IN CLUDING I.T.A. NO.439 & 440/AGRA/2011 ORDER DATED 14.09.2012 WHEREIN IT H AS BEEN HELD THAT INTEREST UNDER SECTION 36(1)(III) IS NOT DISALLOWABLE IF THE ASSESSEE IS HAVING SUFFICIENT OWN CAPITAL. IN THE LIGHT OF THE FACT WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ORDER OF CIT(A) IS CONFIRMED. 22. IN REVENUES APPEAL THE SECOND ISSUE RAISED PE RTAINS TO ALLOWING REBATE FOR SELF SUPERVISION UPTO 10% IN BOTH THE YEARS I.E. 20 08-09 & 2009-10. THE CIT(A) AFTER CONSIDERING FACTS OF THE CASE AND AFTER CONSI DERING THE A.V.O.S REPORT DIRECTED THE A.O. TO ALLOW REBATE FOR SELF SUPERVIS ION @ 10% OF THE TOTAL CONSTRUCTION COST. AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE WE DO NOT FIND ANY INFIRMITY IN SUCH DIRECTION OF THE CIT(A) BECAUSE IT IS ADMITTED FACT THAT THE ASSESSEE HAS CONSTRUCTED THE BUILDING BY SELF A ND NOT BY ANY CONTRACTOR. THEREFORE THE CIT(A) HAS RIGHTLY ALLOWED DEDUCTION TO THE EXTENT OF 10% OF THE ITA NOS.539 & 540/AGRA/2012 AND 30 & 31/AGRA/2013 A.YS. 2008-09 & 2009-10 16 TOTAL CONSTRUCTION COST ON ACCOUNT OF SELF SUPERVIS ION. THE ORDER OF THE CIT(A) HAS BEEN CONFIRMED ON THE ISSUE BY US WHILE DECIDING GR OUNDS OF APPEALS OF ASSESSEE IN PARAGRAPH NO.18 OF THIS ORDER. THUS THIS COMMO N GROUND RAISED IN BOTH THE YEARS I.E. A.YS. 2008-09 & 2009-10 ARE DISMISSED. 23. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE AND BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTA NT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT AGRA BENCH AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL AGRA TRUE COPY