Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD
Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU
O R D E R PER S.S.GODARA, J.M. :
This assessee’s appeal for AY.2003-04 arises from the CIT(A)-10, Hyderabad’s order dated 17-06-2016 passed in appeal No.0329/CIT(A)-10/2015-16, involving proceedings u/s.143(3) r.w.s.263 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.
The assessee has pleaded the following substantive grounds in the instant appeal: “1)The order of fie learned CIT(A) is erroneous both on facts and in law.
2)The learned CIT(A) erred in confirming the action of the Assessing Officer in making addition on account of household expenses of Rs.38,000/-. 3)The learned CIT(A) erred in confirming the addition of Rs.16,09,048/- made by the Assessing Officer representing the difference between cost of construction as estimated by the Valuation Cell and the cost of construction as admitted in the books of account. 4)The learned CIT(A) ought to have seen that the construction was completed by 31.03.2002 and the entire expenditure of Rs.39,34,145/- was incurred upto 31.03.2002 and, therefore, no addition can be made for the assessment year 2003-04. 5)The learned CIT(A) ought to have seen that neither the Valuation Cell nor the Assessing Officer have given relief towards rate difference between the CPWD and PWD and allowed a deduction of 15% of the cost. 6)The learned CIT(A) ought to have seen that deduction on account of self supervision is 10% and not 6% as allowed by the Valuation Cell. 7)The learned CIT(A) ought to have seen that the rates adopted by the CPWD are towards cost of construction allowed by the Central Government to the contractors and the profit element of the contractor is more than 10% and, therefore, the deduction towards self supervision of more than 10% is to be allowed. 8)The learned CIT(A) erred in confirming the action of the Assessing Officer in not allowing depreciation on the building. 9) Any other ground or grounds that may be urged at the time of hearing”.
Learned counsel states at the outset that the assessee no more wishes to press for the first and foremost substantive issue of addition on account of house hold expenses of Rs.38,000/- keeping in mind smallness thereof. Rejected accordingly.
We are now left with the latter issue of cost of construction addition of Rs.16,09,048/- on account of the alleged difference between the department’s valuation cell as against the books of accounts maintained at the taxpayer’s behest. Learned counsel sought to invite our attention to various distinguished features adopted by the valuation cell viz-a-viz assessee’s books of account, CPWD and the said state PWD rates as well as the necessary adjustment regarding self- supervision. 5. Coupled with this learned counsel has also placed on record necessary proceedings records dt.25-09-2000 before the Commissioner, Warangal Municipal Corporation approving the construction followed by his permit dt.25-09-2000. The said municipality’s notice for assessment of property tax and the necessary invitations after completion of the nursing home’s inauguration dt.22-02-2002. Although the latter set of documents have come by way of additional evidence, learned counsel vehemently contended in view thereof that both the lower authorities have erred in law and on facts in assessing the entire cost of construction FY.2002-03 involving the AY.2003-04 before us. 6. Learned departmental representative has drawn a strong support from both the lower authorities’ action making the impugned cost of construction addition.
We have given our thoughtful consideration to rival contentions against and in support of the impugned addition amounting to Rs.16,09,048/-. Case file prima facie suggests that neither the valuation cell nor the learned lower authorities have taken into consideration the alleged difference between the state and CPWDs rates as well as assessee’s self-supervision and cost of raw material at the relevant point of time. And also it has come on record from a perusal of the municipal construction permissions as well as house tax assessment proceedings that the impugned construction had not been completed in the impugned AY.2003-04 prima facie. We therefore deem it appropriate in these peculiar facts and circumstances that a lumpsum addition of Rs.3.5 lakhs only than that in issue amounting to Rs.16,09,048/- would meet the ends of justice with a rider that the same shall not be taken as a precedent. The assessee gets relief of Rs.12,59,048/- in other terms. Ordered accordingly. Necessary computation to follow as per law. No other grounds been pressed before us.
This assessee’s appeal is partly allowed in foregoing terms.
Order pronounced in the open court on 16th July, 2021