Purshottam Agarwal & Sons, Darjeeling V. ITO, Ward - 3(1), Siliguri, Siliguri

ITA 1104/KOL/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7875 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 01-06-2010
• Court: TRIBUNAL
• Department Lawyers: D BANERJEE; PULAK AIC
• Assessee Lawyers: S CHOUDHURY
• Keywords: Valuation report; Assessment record
• Section: 143(3); 6; 144

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA ( ) BEFORE , /AND , ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA , AM ] / I.T.A NO S . 1104 & 1105 /KOL/20 1 0 / ASSESSMENT YEAR S : 200 5 - 0 6 & 2006 - 07 PURUSHOTTAM AGARWAL & SONS VS. INCOME - TAX OFFICER, WD - 3(1), SILIGURI (PAN:AAHHP9882L) ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING: 0 8 . 12 .201 4 DATE OF PRONOUNCEMENT: 12 . 1 2 .201 4 FOR THE APPELLANT : SHRI S. CHOUDHURY , ADVOCATE FOR THE RESPONDENT : SHRI D. BANERJEE, JCIT & SHRI PULAK AICH, DCIT / ORDER PER SHRI MAHAVIR SINGH, JM : BOTH THE APPEALS FILED BY ASSESSEE ARE AGAINST THE COMMON ORDER OF CIT(A) , SILIGURI IN APPEAL NO. 99 /CIT(A) /SLG/07 - 08 & 05/CIT(A)/SLG/09 - 10 DATED 29 .0 3 .201 0 . ASSESSMENT W AS FRAMED BY ITO, WARD - 3(1), SILIGURI U/S. 143(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR S 2005 - 06 AND 2006 - 07 VIDE HIS SEPARATE ORDER S DATED 31 .12.200 7 AND 30.12.2008 . 2. FIRST OF ALL , WE WILL DEAL WITH ITA NO. 1104 /KOL/201 0 . THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE PROTECTIVE ASSESSMENT IN THE HANDS OF THE ASSESSEE, WHEREAS SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SILIGURI PRABHUPADA INTERNATIONAL RESEARCH SOCIETY ON THE BASIS OF DIFFERENCE BETWEEN INVESTMENT SHOWN BY THE ASSESSEE IN THE COST O F CONSTRUCTION OF BUILDING IN ITS BOOKS OF ACCOUNT AND COST ESTIMATED VIDE DVO S REPORT BEING RS.20 LACS. 3. AT THE OUTSET, IT IS NOTICED THAT ON A NUMBER OF OCCASION TRIBUNAL ASKED REVENUE TO GIVE THE STATUS REPORT IN RESPECT OF SUBSTANTIVE ADDITION IN THE HANDS OF SILIGURI PRABHUPADA INTERNATIONAL RESEARCH SOCIETY. THE TRIBUNAL VIDE ORDER SHEET ENTRY DATED 14.02.2013 AT SL. NO. 23 DIRECTED AS UNDER: SL. NO. 23 - THE LD. DR IS DIRECTED TO VERIFY WHERE IS THE SUBSTANTIVE ADDITION AND THE LATEST STATUS O F THE INPUT ASSESSMENT YEAR IN THE CASE OF SILIGURI PRABHUPADA INTERNATIONAL RESEARCH SOCIETY . HENCE, THE CASE IS ADJD. AND BLOCK FOR 3 MONTHS. BOTH PARTIES ARE INFORMED IN THE OPEN COURT. 2 ITA NO. 1104 & 1105/KOL/2010 PURSHOTTAM AGARWAL & SONS AY 2005 - 06 & 2006 - 07 AGAIN ON 25.06.2013 AT SL. NO. 25 TO PRODUCE ASSESSMENT RECO RD AND TELL THE STATUS OF SUBSTANTIVE ADDITION, AS UNDER: SL. NO. 25 1. HEARD THE PARTIES. 2. DR DIRECTED TO PRODUCE ASSESSMENT RECORD OF THE ASSESSEE IN WHOSE HANDS SUBSTANTIVE ASSESSMENT WAS MADE. 3. ADJ. TO 19.07. FOR COMPLIANCE TO THIS REQUISITIO N. TECHNICALLY, P/H MATTER AGAIN ON 19.07.2013 AT SL. NO.27 TO PRODUCE ASSESSMENT RECORD AND TELL THE STATUS OF SUBSTANTIVE ADDITION AND FINAL OPPORTUNITY WAS GIVEN, AS UNDER: SL. NO. 27 FINAL OPPORTUNITY FOR 9 TH OCTOBER. FAILURE TO PRODUCE RECORD ON THAT DAY WILL RESULT IN ADVERSE INFERENCE. ADJ. TO 09/10. AGAIN ON 08.09.2014 AT SL. NO.33 FOR THE SAME REASONS IT WAS ADJOURNED AS UNDER: SL. NO.33 AS PER REASON NOTED IN THE ORDER SHEET ENTRY DATED 25.06.2013 , THE CASE IS ADJOURNED TO 17.11.14. BOTH PARTIES ARE INFORMED IN THE OPEN COURT. AND FINALLY ON 20.11.2014 AT SL. NO. 36, THE BENCH NOTED AS UNDER: SL. NO. 36 IN THIS CASE, VIDE ORDER SHEET ENTRY DATED 26.09.12, THE REVENUE WAS ASKED TO PRODUCE AS SESSMENT RECORDS. AGAIN ON 14.02.2013, THE DR WAS DIRECTED TO VERIFY WHETHER THE SUBSTANTIVE ADDITION HAS BEEN MADE AND ALSO TO PRODUCE ASSESSMENT RECORDS. AGAIN ON 25.06.2013, THE REVENUE WAS DIRECTED TO PRODUCE ASSESSMENT RECORDS AND ALSO INFORM WHETHE R SUBSTANTIVE ASSESSMENT WAS MADE. AGAIN ON 19.07.13, IT WAS INFORMED TO THE REVENUE THAT ADVERSE INFERENCE WILL BE DRAWN, IN CASE, THE REVENUE IS UNABLE TO GIVE THE INFORMATION CALLED FOR I.E. WHETHER THE SUBSTANTIVE ADDITION HAS BEEN MADE AND TO PRODUCE THE ASSESSMENT RECORDS. AGAIN ON 22.10.13, THE MATTER WAS ADJOURNED ON SAME PRETEXT. FURTHER, ON 18.09.14, EARLIER ORDER SHEET ENTRIES WERE DIRECTED TO COMPLY WITH. AGAIN ON 18.11.14, THE LD. SR. DR FILED A LETTER WRITTEN TO THE AO FOR REQUISITION OF A SSESSMENT RECORDS VIDE NO. ADDL. CIT RANGE - 2(C)/KOL/REQUISITION/14 - 15. FINALLY, ON 19.11.2014, WHEN REVENUE WAS ASKED FOR THE INFORMATION AND PRODUCE THE REQUISITION MADE FOR ASSESSMENT RECORDS, VIDE LETTER NO. CIT(ITAT)/KOL/B - BENCH/2014 - 15/2786 DATED 19. 11.14 , SR. DR STATED THAT TELEPHONICALLY MANY A TIMES, THE AO WAS REQUESTED BUT TILL DATE NOTHING CAME CONCRETE. ON THIS, WE ADJOURNED THE MATTER FOR 20.11.14 I.E. TODAY AND TODAY ALSO THE LD. SR. DR DID NOT FILE ANY INFORMATION AND THE ASSESSMENT RECORDS , AS ASKED FOR. AS THE REVENUE HAS SHOWN A NON - COOPERATIVE ATTITUDE AND NOT BEEN ABLE TO PRODUCE ASSESSMENT RECORDS OR TO STATE WHETHER THE SUBSTANTIVE ADDITION HAS BEEN MADE AND WHAT HAPPENED TO THAT. TO KNOW THE ACTUAL FACTS, THE CONCERNED ASSESSING OF FICER IS DIRECTED TO APPEAR BEFORE THE BENCH ON 8 TH DECEMBER, 2014 ALONG WITH THE CASE RECORDS. THE MATTER IS ADJOURNED TO 8 TH DECEMBER, 2014. 4. NOW, TODAY, THE CONCERNED AO SHRI PULAK AICH, DCIT ALONG WITH SR. DR. SHRI D. BANERJEE, JCIT APPEARED BEFORE THE TRIBUNAL BUT THEY COULD NOT ANSWER THE MAIN QUERY WHERE THE SUBSTANTIVE ADDITION IS MADE AND WHAT IS THE STATUS AS ON DATE . THE AO REPLIED THAT TILL DATE THEY COULD NOT FIND THE STATUS OF SUBSTANTIVE ADDITION AND SHOWN IGNORANCE. AS THE REVENUE COULD NOT POINT OUT , WHERE THE SUBSTANTIVE ADDITION MADE AND WHAT 3 ITA NO. 1104 & 1105/KOL/2010 PURSHOTTAM AGARWAL & SONS AY 2005 - 06 & 2006 - 07 HAPPENED TO THE SAME, WE ARE UNABLE TO KEEP THIS APPEAL P ENDING SINCE 2010 AND ADJOURNED 36 TIMES . W E CANNOT KEEP THIS APPEAL AS PENDING FOR EVER FOR THE FAULT OF REVENUE . IN TERM OF THE AB OVE, WE DELETE THE PROTECTIVE ADDITION BECAUSE THE REVENUE IS UNABLE TO BRING ON RECORD WHAT HAPPENED TO SUBSTANTIVE ADDITION. IN CASE, REVENUE IS ABLE TO SHOW US THAT SUBSTANTIVE ADDITION HAS BEEN DELETED IN THE HANDS OF SILIGURI PRABHUPADA INTERNATIONAL RESEARCH SOCIETY AND THERE IS A DIRECTION THAT THIS ADDITION SHOULD BE CONSIDERED IN THE HANDS OF THE ASSESSEE, THEN THEY MAY GET THIS ORDER RECALLED AS PER THE PROVISIONS OF THE ACT. IN TERM OF THE ABOVE, THIS APPEAL OF ASSESSEE IS ALLOWED AND PROTECTIV E ADDITION IS DELETED. 5. COMING TO ITA NO. 1105/KOL/2010. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN MAKING ADDITION OF DIFFERENCE BEING THE INVESTMENT MADE IN THE COST OF CONSTRUCTION AS DIS CLOSED IN BOOKS OF ACCOUNT AND COST OF CONSTRUCTION AS PER DVO S REPORT AT RS.15,77,260/ - . 6. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STATED THAT THIS ISSUE IS COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE FOR THE REASON THAT THE AO HAS NOT RE JECTED THE BOOK RESULTS. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE IS A PROPERTY DEVELOPER AND IS ENGAGED IN CONSTRUCTION AND SALE OF PROPERTY DEVELOPED BY IT. DURING THE COURSE OF ASSESSMENT PROCEEDING ASSESSEE FURNISHED DETAILS IN RESPEC T OF CONSTRUCTION OF PROPERTY AND SALE THEREOF. THE ASSESSEE PRODUCED COMPLETE BOOKS OF ACCOUNT ALONG WITH BILLS, VOUCHERS, BANK STATEMENT AND OTHER DETAILS AS REQUISITIONED, WHICH WERE VERIFIED BY THE AO. THE RELEVANT PARA AT 1 ST PAGE OF THE ASSESSMENT ORDER READS AS UNDER: BOOKS OF ACCOUNT WERE PRODUCED FOR VERIFICATION ALONGWITH BILLS, VOUCHERS, BANK STATEMENTS AND OTHER DETAILS THAT WERE REQUISITIONED AND THE SAME WERE TEST CHECKED AND VERIFIED. ON EXAMINATION, THE FOLLOWING OBSERVATION WAS MADE. THE AO WITHOUT REJECTING THE BOOKS OF ACCOUNT REFERRED THE MATTER TO DVO, WHO ESTIMATED THE COST OF CONSTRUCTION AT RS.37,70,933/ - VIDE HIS REPORT F. NO.1832/DVO/IT/KOL/07 - 08/537 DT. 27.12.2007 WHEREAS THE COST OF CONSTRUCTION DECLARED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT WAS AT RS.21,93,673/ - . ACCORDING TO AO, AS THERE WAS A DIFFERENCE HE MADE ADDITION AT RS.15,77,260/ - . LD. COUNSEL FOR THE ASSESSEE STATED THAT WITHOUT REJECTING THE BOOKS OF ACCOUNT, THE AO CANNOT REFER THE COST OF CONSTRUCTION FOR VALUATION IN VIEW OF THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF SARGAM CINEMA VS. CIT (2010) 328 ITR 513(SC). THE CIT( A ) ALSO CONFIRMED THE ACTION OF AO WITHOUT ANY BASIS. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 4 ITA NO. 1104 & 1105/KOL/2010 PURSHOTTAM AGARWAL & SONS AY 2005 - 06 & 2006 - 07 7 . WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALREADY DEALT WITH EXACTLY SIMILAR ISSUE IN THE CASE OF ITO VS. M/S. SAHUL INDIA LIMITED IN ITA NOS. 768 & 769/KOL/2011 FOR AY 2002 - 03 & 2003 - 04 DATED 10.08.2011, WHEREIN IT IS HELD AS UNDER: 4. THE ONLY QUESTION BEFORE US IS WHETHER REFERENCE CAN BE MADE WITHOUT REJECTING BOOK RESULTS OR NOT, TO DVO FOR ESTIMATING COST OF CONSTRUCTION, PARTICULARLY WHEN NO DEFECTS WERE FOUND IN BOOKS OF ACCOUNT EXCEPT DISALLOWANCE OF SMALL DISCREPANCIES AND OTHER PRELIMINARY EXPENSES BEING CAPITAL IN NATURE, WHICH WERE ADDED, WHILE COMPLETING ASSESSMENT U/S. 143(3) OF THE ACT. WE HAVE GONE THROUGH THE REASSESSMENT ORDERS AND ASSESSMENT ORDER FRAMED U/S. 143(3) OF THE ACT FOR ASSESSMENT YEAR 2002 - 03, THERE IS NO WHISPER ABOUT ANY DISCREPANCY IN BOOKS OF ACCOUNT AND THERE IS NO REJECTION OF BOOKS OF ACCOUNT BY ASSESSING OFFICER. ONCE THIS IS THE POSITION, WHAT THE ASSESSING OFFICER SHOULD HAVE DONE. THE ASSESSING OFFICER SHOULD NOT HAVE REFE RRED THE MATTER TO THE DVO FOR ESTIMATING COST OF CONSTRUCTION PARTICULARLY WHEN THE COST OF CONSTRUCTION IS FULLY DESCRIBED IN THE BOOKS OF ACCOUNT. THE BASIC PRINCIPLE IS THE SAME IN LAW RELATING TO INCOME - TAX AS WELL AS IN CIVIL LAW, NAMELY, IF THERE IS NO CHALLENGE TO THE TRANSACTION REPRESENTED BY THE ENTRIES OR TO THE GENUINENESS OF THE ENTRIES, THEN IT IS NOT OPEN TO THE REVENUE OR OTHER SIDE TO CONTEND THAT WHAT IS SHOWN BY THE ENTRIES IS NOT THE REAL STATE OF AFFAIRS. WHEN A RETURN IS FURNISHED AND ACCOUNTS ARE PUT IN, IN SUPPORT OF THAT RETURN, THE ACCOUNTS SHOULD BE TAKEN AS THE BASIS FOR ASSESSMENT. THEY SHOULD NOT BE REJECTED BECAUSE THEY ARE COMPLICATED. THE PROCEDURE OF THE ASSESSING OFFICER IS OF A JUDICIAL NATURE AND IN MAKING ASSESSMENT HE SHOULD PROCEED ON JUDICIAL PRINCIPLES. IF EVIDENCE IS PRODUCED BY THE ASSESSEE IN SUPPORT OF HIS RETURN IT SHOULD BE ACCEPTED UNLESS IT IS REBUTTED BY OTHER ADMISSIBLE EVIDENCE AND NOT BY MERE HEARSAY. AS THE ASSESSING OFFICER EXAMINES THE ACCOUNTS OF AN A SSESSEE, HE HAS TO CONSIDER THE FOLLOWING QUESTIONS: (1) WHETHER THE ASSESSEE HAS REGULARLY EMPLOYED A METHOD OF ACCOUNTING? (2) EVEN IF REGULAR ADOPTION OF A METHOD OF ACCOUNTING IS THERE, WHETHER THE ANNUAL PROFITS CAN PROPERLY BE DEDUCED FROM THE METH OD EMPLOYED? (3) WHETHER THE ACCOUNTS ARE CORRECTLY MAINTAINED? (4) WHETHER THE ACCOUNTS MAINTAINED ARE COMPLETE IN THE SENSE THAT THERE IS NO SIGNIFICANT OMISSION THEREIN? IF THE ASSESSING OFFICER S FINDING ON ALL THE FOUR QUESTIONS IS IN THE AFFIRMATIV E (YES), ASSESSEE S PROFITS ARE TO BE COMPUTED ON THE BASIS OF HIS ACCOUNTS. IN SUCH A CASE, NEITHER FIRST PROVISO TO SECTION 145(1) OF THE ACT NOR SECTION 145(2) OF THE ACT CAN BE INVOKED. IF, HOWEVER, THE FINDING ON QUESTIONS NO (1), (3) AND (4) IS IN TH E AFFIRMATIVE (YES), BUT THE FINDING ON QUESTION NO. 2 IS IN THE NEGATIVE (NO), THE FIRST PROVISO TO SECTION 145(1) OF THE ACT COMES IN AND THE COMPUTATION OF INCOME HAS TO BE MADE ON SUCH BASIS AND IN SUCH MANNER AS THE ASSESSING OFFICER MAY DETERMINE. ON THE OTHER HAND, IF THE FINDING ON ANY OF THE QUESTIONS NO. (1), (3) OR (4) IS IN THE NEGATIVE (NO), SECTION 145(2) OF THE ACT APPLIES AND THE ASSESSING OFFICER MAY MAKE A BEST JUDGMENT ASSESSMENT IN THE MANNER PROVIDED IN SECTION 144 OF THE ACT. FIRST PRO VISO TO SECTION 145(1) OF THE ACT, OR SECTION 145(2) OF THE ACT, CAN BE INVOKED ONLY IF AND WHERE ELEMENTS ATTRACTING EITHER OF THOSE PROVISIONS ARE FOUND TO EXIST. A CLEAR FINDING TO THAT EFFECT, ALONG WITH MATERIALS ON WHICH SUCH FINDING IS BASED, HAS TO BE MADE OUT AND GIVEN BY ASSESSING OFFICER. NO ASSESSMENT UNDER THE FIRST PROVISO TO SECTION 145(1) OF THE ACT OR UNDER SECTION 145(2) OF THE ACT CAN BE SUSTAINED IF THE ASSESSING OFFICER (OR THE APPELLATE AUTHORITY, IN CASES OF APPEAL) HAS NOT CONSIDERED AND RECORDED A FINDING AGAINST THE ASSESSEE AS TO WHETHER HE HAS BEEN REGULARLY 5 ITA NO. 1104 & 1105/KOL/2010 PURSHOTTAM AGARWAL & SONS AY 2005 - 06 & 2006 - 07 EMPLOYING A METHOD OF ACCOUNTING OR WHETHER HIS INCOME, PROFITS OR GAINS CAN PROPERLY BE DEDUCED FROM HIS METHOD OF ACCOUNTING IF HE HAS BEEN REGULARLY EMPLOYING A METHOD OF A CCOUNTING OR WHETHER THE ACCOUNTS ARE CORRECT AND COMPLETE, AND THE ASSESSING OFFICER S DECISION ON THESE MATTERS IS NOT TO BE A SUBJECTIVE OR ARBITRARY DECISION BUT A JUDICIAL DECISION AND CANNOT BE ACCEPTED IF THERE IS NO MATERIAL TO SUPPORT HIS FINDINGS . AS IN PRESENT CASE, THE AO REFERRED COST OF CONSTRUCTION TO DVO WITHOUT REJECTION OF BOOKS OF ACCOUNT, WHICH IS NOT AS PER ESTABLISHED LEGAL PROPOSITIONS. HON BLE APEX COURT IN THE CASE OF SARGAM CINEMA VS. CIT (2010) 328 ITR 513(SC) HELD AS UNDER: - IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL DECIDED THE MATTER RIGHTLY IN FAVOUR OF THE ASSESSEE INASMUCH AS THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO THE DEPARTMENT VALUATION OFFICER (DV)) WITH OUT THE BOOKS OF ACCOUNT BEING REJECTED. IN THE PRESENT CASE, A CATEGORICAL FINDING IS RECORDED BY THE TRIBUNAL THAT THE BOOKS WERE NEVER REJECTED. THIS ASPECT HAS NOT BEEN CONSIDERED BY THE HIGH COURT. IN THE CIRCUMSTANCES, RELIANCE PLACED ON THE REPOR T OF THE DVO WAS MISCONCEIVED. FURTHER HON BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V PRATAP SINGH AMRO SINGH RAJENDRA SINGH (1993) 200 ITR 788 (RAJ) HELD AS UNDER: - WE HAVE CONSIDERED THE MATTER. IN RESPECT OF THE INVESTMENT WHICH IS MADE IN THE PR OPERTY, THERE CAN BE ONLY TWO METHODS TO FIND OUT THE CORRECT POSITION (I) WHEN PROPER BOOKS OF ACCOUNT ARE MAINTAINED, AND (II) VALUATION REPORT. IF THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNT AND ALL DETAILS ARE MENTIONED IN SUCH BOOKS OF ACCOUNT , WHICH ARE DULY SUPPORTED BY VOUCHERS AND NO DEFECTS ARE POINTED OUT AND THE BOOKS ARE NOT REJECTED, THE FIGURES SHOWN THEREIN HAVE TO BE FOLLOWED. THE VALUATION REPORT CAN BE TAKEN INTO CONSIDERATION ONLY WHEN THE BOOKS OF ACCOUNT ARE NOT RELIABLE OR ARE NOT SUPPORTED BY PROPER VOUCHERS OR THE INCOME - TAX OFFICER IS OF THE OPINION THAT NO RELIANCE CAN BE PLACED ON SUCH BOOKS OF ACCOUNT. IT IS TRUE THAT THE INCOME - TAX OFFICER HAS NO OPTION BUT TO RELY ON THE VALUATION REPORT, WHICH IS A DOCUMENT PREPARED BY AN EXPERT AND IS ADMISSIBLE, BUT THERE MUST BE A FINDING BY THE INCOME - TAX OFFICER THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ARE DEFECTIVE OR ARE NOT RELIABLE. THERE MAY BE A MARGINAL DIFFERENCE IN THE ACTUAL INVESTMENT AND THE REPORT OF THE V ALUATION OFFICER FOR A NUMBER OF REASONS AS THE VALUATION REPORT IS PREPARED ON THE BASIS OF NORMS PRESCRIBED BY THE C. P. W. D. FOR THE CONSTRUCTION OF BUILDINGS AND THE DIFFERENCE MAY BE WITH REGARD TO QUALITY OF THE MATERIALS, ETC. THE INCOME - TAX OFF ICER COULD HAVE EXAMINED THE MATTER IN DETAIL WITH REGARD TO THE BOOKS OF ACCOUNT IN ORDER TO SAY THAT THE BOOKS ARE NOT RELIABLE. SIMPLY BECAUSE THE VALUATION REPORT IS OF A HIGHER AMOUNT, THE BOOKS CANNOT BE SAID TO BE UNRELIABLE UNLESS, BY A DEEPER PROB E, ANY DEFECT IS FOUND IN THE MAINTENANCE OF THE BOOKS OF ACCOUNT. THE TRIBUNAL WAS, THEREFORE, JUSTIFIED IN DELETING THE ADDITION OF RS. 55,780. CONSEQUENTLY, THE REFERENCE IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE AND IT IS H ELD THAT IN THE ABSENCE OF ANY FINDING BY THE INCOME - TAX OFFICER THAT THE BOOKS OF ACCOUNT ARE NOT PROPERLY MAINTAINED AND THAT THE EXPENDITURE IS NOT FULLY RECORDED OR IS NOT SUPPORTED BY VOUCHERS OR THE BOOKS OF ACCOUNT ARE DEFECTIVE, THE INCOME TAX APPE LLATE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 55,780. IN VIEW OF THE ABOVE LEGAL POSITION AND RESPECTFULLY FOLLOWING THE DECISION OF HON BLE APEX COURT AND HON BLE RAJASTHAN HIGH COURT, WE DELETE THE ADDITION BASED ON DVO S REPORT ESTIMA TING COST OF CONSTRUCTION WITHOUT REJECTION OF BOOKS OF ACCOUNT, AS THE BOOKS OF ACCOUNT WERE MAINTAINED PROPERLY BY ASSESSEE RECORDING THE COST OF CONSTRUCTION. HENCE, CROSS OBJECTIONS OF ASSESSEE ARE ALLOWED. 6 ITA NO. 1104 & 1105/KOL/2010 PURSHOTTAM AGARWAL & SONS AY 2005 - 06 & 2006 - 07 WE FIND FROM THE ABOVE DECISION OF THIS T RIBUNAL, WHEREIN THE ISSUE IS EXTENSIVELY DEALT WITH AND THE FACTS AND CIRCUMSTANCES ARE EXACTLY SIMILAR IN THE PRESENT CASE BEFORE US, TAKING A CONSISTENT VIEW, WE DELETE THE ADDITION FOR THE REASON THAT WITHOUT REJECTION OF BOOKS OF ACCOUNT THE REFERENCE TO DETERMINE THE COST OF CONSTRUCTION TO DVO CANNOT BE MADE IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SARGAM CINEMA, SUPRA. 8 . IN THE RESULT, APPEAL S OF ASSESSEE ARE ALLOWED. 9 . ORDER IS PRONOUNCED IN OPEN COURT ON 1 2 . 1 2 . 2 0 1 4 S D / - S D / - , , ( SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 2 T H DECEMBER , 201 4 JD.(SR.P.S.) - COPY OF THE ORDER FORWARDED TO: 1 . / A PPELLANT PURUSHOTTAM AGARWAL & SONS, C/O S. L. AGHARWAL, 33, M. G. ROAD, KHOLAPARA, SILIGURI, DIST. DARJEELING PIN - 734005 . 2 / RESPONDENT ITO, WARD - 3(1), SILIGURI . 3 . ( )/ THE CIT(A), SILIGURI 4. 5. / CIT , SILIGURI / DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, / BY ORDER, /ASSTT. REGISTRAR .