Sree Vasista Infrastructures Private Limited, Vijayawada V. Income Tax Officer, Ward-2(2), Vijayawada

CO 71/VIZ/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2316 (ITAT-VISAKHAPATNAM)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 28-08-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO S . 238 & 242 / VIZ /201 8 (ASST. YEAR : 20 13 - 14 & 20 14 - 1 5 ) ACIT , CIRCLE - 3(1), VIJAYAWADA. VS. M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD., 54 - 20/9 - 6, TIMMARUSU STREET, SRINAGAR COLONY, VIJAYAWADA. PAN NO. AAKCS 0909 D (APPELLANT) (RESPONDENT) C.O.NOS. 71 & 73/VIZ/2018 (ARISING OUT OF ITA NO S . 238 & 242 / VIZ /201 8 ) (ASST. YEAR : 20 13 - 14 & 2014 - 15 ) M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD., 54 - 20/9 - 6, TIMMARUSU STREET, SRINAGAR COLONY, VIJAYAWADA. PAN NO. AAKCS 0909 D VS. ACIT, CIRCLE - 3(1), VIJAYAWADA. (APP LICANTS ) (RESPONDENT) ASSESSEE BY : SHRI C. SUBRAHMANYAM, FC A. DEPARTMENT BY : SHRI D.K. SONAWAL, CIT DR DATE OF HEARING : 1 9 / 0 6 /201 9 . DATE OF PRONOUNCEMENT : 26 / 0 6 /201 9 . 2 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THESE APPEAL S BY THE REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) , VIJAYAWADA , BOTH DATED 1 2 /0 3 /201 8 FOR THE ASSESSMENT YEARS 20 13 - 14 & 20 14 - 1 5 . SINCE FACTS AND ISSUES ARE COMMON, CLUBBED AND HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY, FILED ITS RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS . 49,91,180/ - . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE HAS CONSTRUCTED TWO BUILDINGS , WHICH WERE LET OUT TO SRI KALYANA CHAKRAVARTI MEMORIAL EDUCATIONAL TRUST . AS IT IS INFORMED THAT VALUATION OF THE BUILDINGS WAS NOT DONE BY THE ASSESSEE, SO AS TO EXAMINE THE CORRECTNESS OF THE INVESTMENT IN THE CONSTRUCTION , THE CONSTRUCTION WAS REFERRED TO THE DVO U/SEC. 142A(1) OF THE ACT . THE ASSESSING OFFICER AFTER CONSIDERING THE DVOS REPORT, VALUED THE PROPERTY AS UND ER: - DESCRIPTION EXPENDITURE AS STATED BY THE ASSESSEE ASSESSED COST OF CONSTRUCTION DIFFERENCE BUILDING 1 60459494 69063753 8604259 BUILDING 2 51410769 58147347 6736578 TOTAL 111870263 127211100 15340837 3 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) THE ASSESSING OFFICER AFTER CONSIDERING THE DVOS REPORT , HAS MADE THE ADDITION OF RS. 1,53,40,837/ - TOWARDS UNEXPLAINED INVESTMENT AND ADDED TO THE RETURNED INCOME. 3 . ON APPEAL BEFORE THE LD. CIT(A), IT WAS SUBMITTED TH A T THE COST OF CONSTRUCTION AS ESTIMATED BY THE ASSESSING OFFICER BY CONSIDERING THE C PW D RATES , THERE IS ALWAYS A DIFFERENCE BETWEEN THE CPWD & PWD RATES AND WHEN DVO CONSIDERED THE CPWD RATES, 15% DEDUCTION MAY BE GIVEN FOR DIFFERENCE BETWEEN CPWD RATES AND LOCAL RATES . HE ALSO CLAIMED 10% DEDUCTION FOR THE SELF - SUPERVISION. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE AND ALSO BY FOL LO WING THE DECISION OF THE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF D. SATYANARAYANA VS. ACIT [(2016) 47 CCH 528)] DIRECTED THE ASSESSING OFFICER TO ALLOW 10 % DEDUCTION IN RESPECT OF ADOPTION OF CPWD RATES AND 10% DEDUCTION IN RESPECT OF SELF - SUPERVISION. 4 . ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THIS TRIBUNAL. 5. THE DEPARTMENT HAS RAISED TWO GROUNDS , ONE IS IN RESPECT OF BENEFIT OF 10% DEDUCTION UNDER THE DIFFERENCE OF CPWD RATES & PWD RATES, WH ICH HAS ALREADY BEEN GRANTED BY THE DVO, THEREFORE, IT AMOUNT S TO DOUBLE DEDUCTION . THE SECOND GROUND IS 4 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) IN RESPECT OF GRANT OF 10% DEDUCTION ON SELF - SUPERVISION , WHICH IS HIGHLY EXCESSIVE AND THE MAXIMUM REBATE ALLOWABLE IS ONLY 7.5% . 6 . ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A) AND ALSO THE DECISION OF THE ITAT , VISAKHAPATNAM IN THE CASE OF ITO VS. K. SATISH IN ITA NO. 49/VIZ/2013, DATED 04/12/2015 . 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 8 . THE ONLY ISSUE INVOLVED IN THIS APPEA L IS IN RESPECT OF REBATE GRANTED BY THE LD. CIT(A) RELATES TO THE DIFFERENCE BETWEEN CPWD & PWD RATES AND SELF - SUPERVISION. THE LD. CIT(A) BY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE VISAKHAPATNAM TRIBUNAL IN THE CASE OF D. SATYANARAYANA (SUPRA) , HAS GRANTED THE REBATE IN RESPECT OF VARIATION BETWEEN CPWD & PWD RATES . THE VERY SAME ISSUE HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN K.SATISHS CASE (SUPRA) WHEREIN IT HAS BEEN HELD AS UNDER: - 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FACTUAL MATRIX OF THE CASE, IS THAT THE A.O. MADE ADDITIONS TOWARDS UNEXPLAINED INVESTMENTS IN BUILDING. WHILE DOING SO, THE A.O. HAS REFERRED THE MATTER TO THE DISTRICT VALUATION OFFICER AND OBTAINED THE REPORT FROM DVO AND MADE THE ADDITIONS TOWARDS DIFFERENCE BETWEEN VALUE DETERMINED BY THE DVO AND AMOUNT REPORTED BY THE ASSESSE E . THE ASSESSE E CHALLENGED THE MATTER BEFORE CIT(A), BUT COULD NOT SUCCEED. THE ASSESS E E CARRIED THE MATTER TO THE ITAT. THE ITAT, SET ASIDE THE ORDER PA SSED BY CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF A.O. BY OBSERVING THAT THE A.O. HAS REFERRED TO D.V.O. FOR 5 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) VALUATION, WITHOUT REJECTING THE BOOKS OF ACCOUNTS WHICH IS NOT PERMITTED IN LAW. THE ITAT, FURTHER OBSERVED THAT THE APPELLANT WAS NOT GIVEN PROPER OPPORTUNITY OF HEARING AND THUS, DENIED THE ASSESSEE AN OPPORTUNITY TO PUT FORTH HIS ARGUMENTS. WITH THESE OBSERVATIONS, THE ITAT SET ASIDE THE ASSESSMENT TO THE FILE OF THE A.O. WITH A DIRECTION TO RE - EXAMINE THE COST OF CONSTRUCTION ALONG WITH B OOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. CONSEQUENT TO ITAT DIRECTIONS, THE A.O. HAS TAKEN UP THE CASE FOR RE - EXAMINATION. HOWEVER, THE A.O. IGNORED THE BOOKS OF ACCOUNTS FURNISHED BY THE ASSESS E E AND CONFIRMED THE ADDITIONS MADE ON THE BASIS OF THE DV O REPORT. WHILE DOING SO THE A.O. HELD THAT THE ASSESS E E, DID NOT PRODUCED BOOKS OF ACCOUNTS AT THE TIME OF ORIGINAL ASSESSMENT, THEREFORE THE BOOKS PRODUCED NOW WERE FABRICATED AND HENCE CANNOT BE ACCEPTED. 8. THE A.O. MADE THE ADDITIONS SOLELY ON THE B ASIS OF THE DVO REPORT AND IGNORED THE BOOKS OF ACCOUNTS PRODUCED BY THE ASSESSEE. WE HAVE EXAMINED THE DVO REPORT, WHEREIN THE DVO HAS ALLOWED 6% MARGIN TOWARDS SELF - SUPERVISION AND DIFFERENCE BETWEEN CPWD & STATE PWD RATES. THE ASSESSEE CONTENTION IS T HAT THE BUILDING IS LOCATED IN A VILLAGE, THEREFORE, IT CANNOT BE VALUED BY TAKING INTO ACCOUNT THE CPWD RATES. THE ASSESSEE FURTHER CONTENDED THAT HE HIMSELF CONSTRUCTED THE BUILDING AND THE QUALITY OF MATERIALS USED FOR CONSTRUCTION IS ALSO VERY LOW, WH EREBY HE HAD SAVED GOOD AMOUNT OF MONEY, THEREFORE, THE VALUE ADOPTED BY THE ASSESSEE SHOULD BE TAKEN INTO ACCOUNT, INSTEAD OF DVO REPORT. AS STATED BY THE AO, THERE IS A DISCREPANCY IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. THEREFORE, THE A.O . REFERRED THE MATTER TO THE VALUATION OFFICER FOR ASCERTAINING THE CORRECT VALUE OF THE COST OF CONSTRUCTION. THE DVO HAS VALUED THE BUILDING BY TAKING INTO ACCOUNT CPWD RATES AND DETERMINED THE VALUE AT RS.72.99 LAKHS. WE HAVE EXAMINED THE DVO REPORT A ND FIND THAT THE DVO HAS ALLOWED 6% TOWARDS SELF SUPERVISION CHARGES. THE ASSESSEES CONTENTION IS THAT AT LEAST 15% TOWARDS RATE DIFFERENCE AND 10% TOWARDS SELF SUPERVISION CHARGES SHOULD HAVE BEEN ALLOWED BY THE A.O. WHILE DETERMINING THE VALUE OF THE B UILDING. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSE THAT, CPWD RATES ARE PRESCRIBED FOR CONSTRUCTION OF BUILDINGS FOR THE CENTRAL GOVERNMENT PROJECTS BY TAKING IN TO ACCOUNT THE STANDARD QUALITY OF CONSTRUCTION WITH HIGH QUALITY MATERIALS. THOUGH THESE RATES ARE THE BASIS FOR VALUATION OF COST OF CONSTRUCTION, SUITABLE MARGIN SHOULD BE ALLOWED, TOWARDS COST OF MATERIALS AND OTHER CHARGES CONSIDERING THE FACTS AND CIRCUMSTANCES, BEING QUALITY OF MATERIALS USED AND PLACE OF CONSTRUCTION. IN THE INSTANT CA SE, AS CAN BE SEEN FROM THE FACTS, THE BUILDING IS SITUATED IN VILLAGE AND THE ASSESSE HIMSELF 6 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) CONSTRUCTED THE BUILDING UNDER HIS SUPERVISION. AS CLAIMED BY THE ASSESS E E, SEPARATE RATES ARE PRESCRIBED BY THE STATE PWD FOR CONSTRUCTION OF BUILDINGS AND WHIC H WAS BROUGHT TO THE NOTICE OF VALUATION OFFICER BUT DVO IGNORED THE STATE PWD RATES. THEREFORE, WE ARE OF THE VIEW THAT THE D.V.O. IS NOT CORRECT IN CONSIDERING THE CPWD RATES, WHEN THE STATE PWD RATE IS AVAILABLE FOR ASCERTAINING THE VALUE OF BUILDING. 9. THE ASSESS E E RELIED UPON THE JUDGEMENT OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SALMA A. MEHDI IN ITA NO.697 & 698/HYD/1995. WE HAVE EXAMINED THE CASE LAWS RELIED UPON BY THE ASSESS E E, IN THE LIGHT OF THE FACTS OF THE PRESENT CASE. THE COOR DINATE BENCH OF THIS TRIBUNAL, IN THE ABOVE MENTIONED CASE, WHILE DEALING WITH SIMILAR ISSUE HELD AS UNDER: THE DVO ESTIMATED THE COST OF CONSTRUCTION FOLLOWING THE PLINTH AREA METHOD OF VALUATION. HE APPLIED THE BASIC PLINTH AREA RATES APPROVED BY THE CEDT. HE APPLIED THE PLINTH AREA OF NEW DELHI AS FIXED IN 1976 AND APPROVED BY THE GOVERNMENT OF INDIA BY DULY ENHANCING THE BASIC RATE OF SIMILAR STRUCTURES WITH APPROPRIATE COST INDEX AS APPLICABLE TO THE LOCALITY DURING THE PERIOD OF CONSTRUCTION. THE VALUATION DID NOT APPEAR TO HAVE TAKEN INTO CONSIDERATION THE LOCAL RATES THAT ACTUALLY EXISTED DURING THE PERIOD FO R CONSTRUCTION. IT IS COMMON KNOWLEDGE CPWD RATES OF NEW DELHI ARE FAR HIGHER THAN LOCAL RATES. KEEPING THAT FACTOR IN VIEW THE FIRST APPELLATE AUTHORITY WOULD APPEAR TO HAVE ALLOWED SOME AD HOC DEDUCTION IN THE COST OF BASIC CONSTRUCTION. TAKING INTO CONSIDERATION THE FACT THAT THE CPWD RATES OF NEW DELHI ARE ALWAYS HIGHER THAN THE LOCA L RATES, WE FELL THAT IT WOULD BE JUST AND REASONABLE TO GIVE AN OVER ALL REDUCTION OF 15% ON THE COST OF CONSTRUCTION ESTIMATED BY THE DVO IN ORDER TO COMPENSATE THE HIGHER ESTIMATE ON ACCOUNT OF THE ADOPTION OF HIGHER RATE OF CPWD OF NEW DELHI. FURTHER, THE VALUATION OFFICER DID NOT ALLOW ANY DEDUCTION TOWARDS PERSONAL SUPERVISION. THE FIRST APPELLATE AUTHORITY ALLOWED 10% REDUCTION ON ACCOUNT OF SAVINGS BY PERSONAL SUPERVISION APPEARS TO BE QUITE REASONABLE. IF WE DEDUCT 10 % TOWARDS PERSONAL SUPERVISION AND 15 % ON ACCOUNT OF THE HIGHER RATE ADOPTED BY THE VALUATION OFFICER, THE ESTIMATE OF COST OF CONSTRUCTION DETERMINED BY THE VALUATION OFFICER COMES DOWN TO RS.5,16,7501 / - . EVEN IF WE TAKE AVERAGE OF COST OF CONSTRUCTION OF RS.68900 DETERMINED BY THE DVO ON THE BASIS OF PLINTH AREA METHOD WORKS OUT TO RS.5,22,000 / - . IN THAT VIEW OF THE MATTER, THE COST OF CONSTRUCTION OF RS.5,16,750 / - ARRIVED AT BY US AFTER GIVING 15% REDUCTION FOR 7 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) HIGHER CPWD RATES AND 10% DEDUCTION FOR PERSONAL SUPERVISION, APPEARS TO BE QUITE REASONABLE. IT CAN BE ROUNDED TO RS.5,16,000/ - . 10. IN YET ANOTHER CASE, THE ITAT HYDERABAD BENCH IN THE CASE OF G. PULLA REDDY VS. JCIT, WHILE CONSIDERIN G THE SIMILAR ISSUE OF APPLICABILITY OF STATE PWD RATES AND DEDUCTION FOR SELF SUPERVISION CHARGES, HAS OBSERVED AS UNDER: PLINTH AREA RATE AS PRESCRIBED BY CBDT OF CURSE CONTAIN PROVISIONS FOR COST INDEXING AND ADJUSTMENT OF LOCATION VARIATION TO ARRIVE AT COST OF CONSTRUCTION OF A PARTICULAR LOCATION. BUT THE FACTS REMAINS THAT SUCH VALUATION RESTS CPWD RATES FIXED ON UNIFORM BASIS. AS OBSERVED IN THE CASE OF ITO VS. TEK CHAN, 52 LTD 1995 B Y THE JAIPUR BENCH THAT CPWD RATES ARE GENERAL IN THEIR NATURE AND PURPOSE IN VIEW OF THE WIDE AREA OF THEIR APPLICABILITY, THE STATE PWD RATES TAKE INTO ACCOUNT THE SPECIAL CONDITIONS IN A PARTICULAR AREA IN THE TERRITORIES OF THE STATE. THE AVAILABILITY OF COST FO R CONSTRUCTION MATERIAL, THE AVAILABILITY OF LABOUR AND WAGES TO BE PAID TO THEM AND OTHER LIKE FACTORS DO AFFECT THE COST OF CONSTRUCTION AND, THEREFORE, IT WAS QUITE LOGICAL FOR THE PERSON CONCERNED TO FOLLOW THE STATE PWD RATES WHILE ESTIMATIN G THE COST OF CONSTRUCTION OF BUILDING IN DIFFERENT AREA. HOWEVER, THE FACTS REMAINS THAT THE PWD RATES ARE FOR THE PURPOSE OF DETERMINING FAIR MARKET RENT OF A PROPERTY, WHENEVER THE STATE PWD AWARDS A CONTRACT FOR CONSTRUCTION OF A PARTICULAR PROPERTY, V ERY SPECIFIC PARAMETERS ARE SENT IN THE CONTRACT FOR THE PURPOSE OF EACH INDIVIDUAL PROJECT AND, HENCE, IT IS NOT CORRECT TO SAY THAT THE STATE PWD RATES ARE THE PROPER BASIS TO ARRIVE AT THE COST OF CONSTRUCTION. THE APPLICABILITY OF CPWD RATE WITH LOCAL INDEXING CAME UP BEFORE THE TRIBUNAL IN THE CASE OF SMT. SALMA A. MEHDI, IN ITA NOS. 697 & 698/HYD/93 FOR ASST. YEARS 1985 - 86 AND 1986 - 87 WHEREIN THE TRIBUNAL VIDE PARAS 10 OF THIS ORDER HELD THAT IN ARRIVING AT PROPER COST OF CONSTRUCTION, IT WOULD BE JUSTIFIED IF A DISCOUNT OF 15 % IS GIVEN FOR HIGHER CPWD RATE AND FURTHER RATE OF 100/0 FOR PERSONAL SUPERVISION IS ALLOWED. THE SAID PARAGRAPH - 10 READS AS UNDER: - THE DVO ESTIMATED THE COST OF CONSTRUCTION FOLLOWING THE PLINTH AREA METHOD OF VALUATION. HE APPLIED THE BASIC PLINTH AREA RATES APPROVED BY THE CEDT. HE APPLIED THE PLINTH AREA OF NEW DELHI AS FIXED IN 1976 AND APPROVED BY THE GOVERNMENT OF INDIA BY DULY 8 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) ENHANCING THE BASIC RATE OF SIMILAR STRUCTURES WITH APPROPRIATE COST INDEX AS APPLICABLE TO THE LOCALITY DURING THE PERIOD OF CONSTRUCTION. THE VALUATION DID NOT APPEAR TO HAVE TAKEN INTO CONSIDERATION THE LOCAL RATES THAT ACTUALLY EXISTED DURING THE PERIOD FOR CONSTRUCTION. IT IS COMMON KNOWLEDGE CPWD RATES OF NEW DELHI ARE FAR HIGHER THAN LOCAL RATES. KEEPING THAT FACTOR IN VIEW THE FIRST APPELLATE AUTHORITY WOULD APPEAR TO HAVE ALLOWED SOME AD HOC DEDUCTION IN THE COST OF BASIC CONSTRUCTION. TAKING INTO CONSIDERATION THE FACT THAT THE CPWD RATES OF NEW DELHI ARE ALWAYS HIGHER THAN THE LOCAL RATES, WE FELL THAT IT WOULD BE JUST AND REASONABLE TO GIVE AN OVERALL REDUCTION OF 15% ON THE COST OF CONSTRUCTION ESTIMAT ED BY THE DVO IN ORDER TO COMPENSATE THE HIGHER ESTIMATE ON ACCOUNT OF THE ADOPTION OF HIGHER RATE OF CPWD OF NEW DELHI. FURTHER, THE VALUATION OFFICER DID NOT ALLOW ANY DEDUCTION TOWARDS PERSONAL SUPERVISION. THE FIRST APPELLATE AUTHORITY ALLOWED 10% REDUCTION ON ACCOUNT OF SAVINGS BY PERSONAL SUPERVISION APPEARS TO BE QUITE REASONABLE. IF WE DEDUCT 10 % TOWARDS PERSONAL SUPERVISION AND 15% ON ACCOUNT OF THE HIGHER RATE ADOPTED BY THE VALUATION OFFICER, THE ESTIMATE OF COST OF CONSTRUCTION DETERMINED BY THE VALUATION OFFICER COMES DOWN TO RS.5,16,7501/ - . EVEN IF WE TAKE AVERAGE OF COST OF CONSTRUCTION OF RS.68900 DETERMINED BY THE DVO ON THE BASIS OF PLINTH AREA METHOD WORKS OUT TO RS.5,22,000/ - . IN THAT VIEW OF THE MATTER, THE COST OF CONSTRUCTION OF RS .5,16,750/ - ARRIVED AT BY US AFTER GIVING 15% REDUCTION FOR HIGHER CPWD RATES AND 10% DEDUCTION FOR PERSONAL SUPERVISION, APPEARS TO BE QUITE REASONABLE. IT CAN BE ROUNDED TO RS.5,16,000/ - . 24. WE ARE IN RESPECTFUL AGREEMENT WITH THE AFORESAID ORDER OF THE TRIBUNAL AND HOLD THAT CIT(A) WAS JUSTIFIED IN UPHOLDING PLINTH AREA BASIS FOR DETERMINING COST OF CONSTRUCTION OVER THE CPWD RATES AND FURTHER REDUCTION OF 10%0 ON ACCOUNT OF PERSONA! SUPE RVISION. WE DO NOT FIND FORCE IN DEPARTMENT'S SUBMISSION THAT THE OBJECT OF DETERMINING THAT RATE OF 10% FOR PERSONAL SUPERVISION WAS GIVEN ONLY BECAUSE, THE ASSESSEE IN THAT CASE HIMSELF WAS AN ENGINEER. THAT MAY BE A FACT WHEN A BUT PROPERTY BEING CONSTR UCTED, EVERY PERSON TAKES CARE AND SUPERVISES THE PROPERTY PERSONALLY, AND THE RATE ALLOWED BY THE TRIBUNAL BY 10/O WOULD BE APPLICABLE IN ALL SUCH CASES. WE MAY, HOWEVER, SAY HERE THAT THE PROPERTY IN CASE OF SMT. SALMA A. MEHDI, WAS OF ABOUT 3000 SQ.FT. , WHICH IS A VERY SMALL AREA, AS COMPARED TO 1,22.985 SQ. FT., AREA IN THE PRESENT' CASE. IT IS AN ADMITTED FACT THAT WHEN A LARGER AREA IS BEING CONSTRUCTED, THERE WILL BE COST ECONOMY IN MANY WAYS FOR 9 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) BULK PURCHASES AND A BETTER BARGAINING POWER AND THE DISCOUNT WHICH IS GIVEN IN CASE OF SMALLER AREA MAY NOT BE SUFFICIENT. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND A VERY HUGE AREA CONSTRUCTED IN THIS APPEAL, WE ARE OF THE OPINION THAT A FURTHER DISCOUNT AT 5% WOULD BE REASONABLE IN ESTIMATING THE COST OF CONSTRUCTION. WE DIRECT ACCORDINGLY. 11. CONSIDERING FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISION, WE ARE OF THE OPINION, THAT THE ASSESSEE IS ENTITLED FOR 15% DEDUCTION TOWARDS RATE VAR IATION BETWEEN CPWD AND STATE PWD AND A FURTHER 10% DEDUCTION TOWARDS SELF - SUPERVISION CHARGES FROM THE VALUE ARRIVED BY THE DVO APPLYING THE CPWD RATES. THE CIT(A), AFTER CONSIDERING THE FACTS THAT THE ASSESS E E HAS MAINTAINED BOOKS OF ACCOUNTS AND BILLS F OR CONSTRUCTION, SCALED DOWN THE ADDITION TO RS.7,25,000/ - . WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE ORDER OF THE CIT(A). THEREFORE, WE INCLINED TO UPHELD THE ORDER OF THE CIT(A) AND REJECT THE GROUND RAISED BY THE REVENUE. 9. RESPECTFULLY FOLLOWING THE ABOVE REFERRED TO DECISION, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) . THUS, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. 10 . INSOFAR AS THE OBJECTION RAISED BY THE DEPARTMENT IN RESPECT OF DOUBLE DEDUCTION IS CONCERNED, IT IS DIRECTED THE ASSESSING OFFICER TO VERIFY WHETHER DVO HAS GRANTED 10% REBATE IN RESPECT OF VARIATION IN CPWD & PWD RATES OR NOT . IF DVO HAS ALREADY GRANTED, NO SEPARATE DEDUCTION IS REQUIRED TO BE GRANTED. ORDER ED ACCORDINGLY 11 . THE CROSS OBJECTIO N S FILED BY THE ASSESSEE ARE BARRED BY LIMITATION BY 17 DAYS . NO APPLICATION S FOR CONDONATION OF DELAY 10 ITA NO S . 238 & 242/VIZ/2018 C.O.NOS.71 & 73/VIZ/2018 ( M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD. ) ARE FILED . THEREFORE, C.OS. FILED BY THE ASSESSEE ARE DISMISSED IN LIMINE. 12. IN THE RESULT, APPEAL S FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 6 T H DAY OF JUNE , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 6 T H JUNE , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE - M/S. SREE VASISTA INFRASTRUCTURES PVT. LTD., 54 - 20/9 - 6, TIMMARUSU STREET, SRINAGAR COLONY, VIJAYAWADA. 2. THE REVENUE - ACIT, CIRCLE - 3(1), VIJAYAWADA. 3. THE PR. CIT , VIJAYAWADA. 4. THE CIT(A) , VIJAYAWADA. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.