Income-tax Officer, V. Shri Laddugopal C. Sharma, Nashik

ITA 1194/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1075 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 17-08-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Unexplained investment; Deemed to accrue or arise in india; Additional evidence; Cost of acquisition; Fair market value; Valuation report; Tax effect
• Section: 69C; 142(1)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 1194 /PN/201 6 / ASSESSM ENT YEAR : 20 1 1 - 1 2 THE INCOME TAX OFFICER, WARD 2(1), NASHIK . / APPELLANT VS. SHRI LADDUGOPAL C SHARMA, ASTHA BHAVAN, OPP. GURUGOVIND SINGH SCHOOL, INDRA NAGAR, NASHIK 422009 . / RESPONDENT PAN: BDIPS5207B / APPELLANT BY : SHRI P.L. KUREEL / RESPONDENT BY : SHRI SANKET JOSHI / DATE OF HEARING : 22 . 0 8 .201 6 / DATE OF PRONOUNCEMENT: 26 . 0 8 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH I S APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - 2 , NASHIK , DATED 31 . 03 .20 1 6 RELATING TO ASSESSMENT YEAR 20 1 1 - 1 2 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL : - ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 2 1 . WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - 2, NASHIK IS JUSTIFIED IN DELETING THE ADDITIONS MADE BY THE A.O. ON THE BASIS OF THE DVO VALUATION REPORT AND NON - CONFIRMATION OF THE LOAN? (TAX EFFECT: A. ON UNEXPLAINED INVESTMENT IN PLOT RS.3,07,062/ - , B. ON UNEXPLAINED INVESTMENT IN HOUSE RS.8,04,728/ - , C. ON UNEXPLAINED UNSECURED LOAN RS.72,600/ - . TOTAL T.E. RS.11,84,390/ - ). 2. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - 2, NAS HIK IS JUSTIFIED IN REJECTING THE VALUATION REPORT ISSUED BY THE DEPARTMENTAL VALUER, DVO, THANE AND ACCEPTING THE REPORT OF OTHER VALUER, SUBMITTED BY THE ASSESSEE? 3. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - 2, NASHIK IS JU STIFIED IN GIVING THE RULING THAT THE A.O. HAS NOT REJECTED THE BOOK RESULTS WITHOUT CONSIDERING THE FACT THAT THE FINANCIAL STATEMENTS PRODUCED BY THE ASSESSEE WERE NEITHER AUDITED NOR GENUINE? 3. THE PRESENT APPEAL IS FILED BY THE REVENUE IS AGAINST TH E ORDER OF CIT(A) IN DELETING THE FOLLOWING ADDITIONS: - A) UNEXPLAINED INVESTMENT IN PLOT OF RS.9,30,491/ - B) UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE AT RS.23,99,276/ - C) UNEXPLAINED UNSECURED LOAN OF RS. 2,20,000/ - 4. BRIEFLY, IN THE FACTS OF T HE CASE, THE ASSESSEE WAS AN INDIVIDUAL ENGAGED 4. BRIEFLY, IN THE FACTS OF T HE CASE, THE ASSESSEE WAS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF ASTROLOG Y CONSULTANCY. THE ASSESSEE IS A SPIRITUAL GURU ENGAGED IN PROVIDING CONSULTANCY TO VARIOUS DISCIPLES SPREAD ACROSS THE COUNTRY. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 3,50,427/ - AND AGRICULTURAL INCOME OF RS. 3,54,560/ - . THE ASSESSEE HAD SHOWN THE WDV OF HOUSE AT NASHIK AT RS. 13,84,082/ - AND THE ADDITION MADE TO THE ASSET DURING THE YEAR WAS RS. 11,00,918/ - . THE ASSES SING OFFICER NOTED THAT THE HOUSE WAS BUILT ON TWO PLOTS OWNED BY THE ASSESSEE SOMEWHERE IN FINANCIAL YEAR 2007 - 08. THE WDV OF THESE PLOTS WERE SHOWN AT RS. 4,23,000/ - AND RS.1,01,101/ - RESPECTIVELY. THUS, THE TOTAL VALUE OF HOUSE AT NASHIK INCLUDING CONS TRUCTION AND LAND COST AS PER BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2011 WORKED OUT TO RS. 30,09,101/ - . THE ASSESSING OFFICER AS PER INFORMATION AVAILABLE WITH THE DEPARTMENT AND ENQUIRIES CONDUCTED, NOTED THAT THE ASSESSEE HAD BUILT THE ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 3 HOUSE ON THE S AID PLOT ADMEASURING 512 SQ.MTRS. HE HAD ALSO BUILT A TEMPLE ON THE SAME PLOT. AS PER INFORMATION AVAILABLE, THE COST OF CONSTRUCTION OF HOUSE WAS NEARLY RS.1.25 CRORES AND THAT OF TEMPLE WAS AT RS.25 LAKHS. IN ORDER TO ASCERTAIN THE GENUINENESS OF INFO RMATION , THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT AND ASKED THE ASSESSEE TO PROVIDE INFORMATION IN RESPECT OF CONSTRUCTION OF HOUSE ALONG WITH BILLS, VOUCHERS AND OTHER DETAILS. THE ASSESSEE WAS RELUCTANT TO FURN ISH INFORMATION OF FIXED ASSETS, CONSTRUCTION COST, DETAILS OF DONORS/DISCIPLES, ETC. AND IN VIEW OF VAST DIFFERENCE IN THE VALUE OF HOUSE AT NASHIK AS PER THE INFORMATION AVAILABLE WITH THE ASSESSING OFFICER AND AS PER BALANCE SHEET OF THE ASSESSEE, MORE ENQUIRIES WERE M ADE . IN RESPONSE TO WHICH, THE ASSESSEE POINTED OUT THAT THE DOCUMENTS SHOWING CONSTRUCTION OF EXPENSES WERE LOST ON 19.07.2012 AND COPY OF FIR LODGED IN THIS REGARD ON 20.07.2012 WITH INDIRANAGAR POLICE STATION WAS FILED. THE ASSESSING OFFICER DID NOT B ELIEVE THE ASSESSEE AND RECORDED HIS STATEMENT. THE ASSESSING OFFICER IN PARA 8 OF THE ASSESSMENT ORDER ACKNOWLEDGES THAT THOUGH THE PLOTS ON WHICH THE BUILDING AND TEMPLE WERE BUILT WERE PURCHASED SOMEWHERE IN 2007 OR SO AND ALSO THE CONSTRUCTION TOOK PL ACE IN 2008, HOWEVER, THE COST OF ACQUISITION AND COST OF DEVELOPMENT OF PLOT AND BUILDING, AS PER THE ASSESSING OFFICER HAD TO BE DETERMINED AS ON 31.03.2011. SINCE THE ASSESSEE HAD FAILED TO FURNISH ANY INFORMATION IN THIS REGARD, THE ASSESSING OFFICER REFERRED THE MATTER TO THE DISTRICT VALUATION OFFICER (DVO), THANE ON 26.08.2013 TO ASCERTAIN THE FAIR MARKET VALUE OF THE BUILDING AND THE LAND ON WHICH THE BUILDING WAS CONSTRUCTED. THE DVO VIDE REPORT DATED 18.03.2014 INTIMATED THAT THE FAIR MARKET VAL UE OF LAND WAS RS. 40,44,121/ - AND THAT OF BUILDING WAS AT RS. 48,84,276/ - MAKING THE TOTAL VALUE OF HOUSE AS ON 01.04.2011 AT RS. 89,28,397/ - . THE ASSESSING OFFICER NOTED THAT THERE WAS DIFFERENCE OF RS. 59,19,296/ - IN THE FAIR MARKET VALUE AS ON 01.04.2011 GIVEN BY ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 4 THE DVO AND CLOSING WDV OF THE SAID PROPERTY AS ON 31.03.2011 SHOWN BY THE ASSESSEE. SINCE THE ASSESSEE HAD FAILED TO PRODUCE ANY EVIDENCE OF COST OF CONSTRUCTION, SUM OF RS. 59,19,296/ - WAS DEEMED TO BE THE INCOME OF ASSESSEE AND SHOW CAUSE NOTIC E IN THIS REGARD WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IN ITS REPLY DATED 21.02.2014 POINTED OUT THAT THERE WERE CALCULATION AND ARITHMETIC MISTAKES IN THE REPORT OF DVO AND THE ASSESSING OFFICER AFTER GOING THROUGH THE REPORT FOUND THAT THERE WERE MIS TAKES IN CALCULATING THE FAIR MARKET VALUE OF THE PLOT. THE MODIFIED REPORT WAS RECEIVED FROM THE DVO ON 24.03.2014 , IN WHICH FAIR MARKET VALUE OF THE PLOT AS ON 01.04.2011 WAS SHOWN AS RS. 14,54,592/ - INSTEAD OF RS. 40,44,121/ - SHOWN IN THE ORIGINAL REPORT . AS PER MODIFIED REPORT, THERE WAS DIFFERENCE OF RS. 33,29,767/ - IN THE FAIR MARKET VALUE AS ON 01.04.2011 GIVEN BY THE DVO AND THE CLOSING WDV OF THE SAID PROPERTY AS ON 31.03.2011 AND HENCE, SUM OF RS. 33,29,767/ - WAS TREATED AS DEEMED INCOME OF THE ASSE SSEE UNDER SECTION 69C OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR. ANOTHER ADDITION MADE IN THE HANDS OF ASSESSEE WAS ON ACCOUNT OF UNSECURED LOANS RECEIVED FROM MEENA SHASTRI AND KIRTI SHARMA TOTALING RS.2,70,000/ - . SINCE THE ASSESSEE FAILED TO FURNISH ANY CONFIRMATION, THE SAME W ERE DISALLOWED AND ADDED AS INCOME OF THE ASSESSEE. 5. IN APPEAL, THE CIT(A) NOTED THAT TWO PLOTS OF LAND WERE PURCHASED IN JANUARY, 2005 AND MARCH, 2008 BY REGI STERED PURCHASE DEED FOR CONSIDERATION OF RS.5,26,101/ - . THE ASS ESSING OFFICER HAD REFERRED THE VALUATION OF THE SAID PLOT AND CONSTRUCTION ON THE SAID PLOT TO THE DVO, WHO HAD VALUED THE PLOTS AS ON 01.04.2011 AT RS. 14,54,592/ - . THE ASSESSING OFFICER THUS, HAD MADE ADDITION TO THE EXTENT OF RS.9,30,491/ - ON ACCOUNT O F UNDISCLOSED INVESTMENT IN PLOTS. THE FIRST CONTENTION RAISED BY THE ASSESSEE BEFORE THE CIT(A) WAS THAT SINCE THE PLOTS WERE PURCHASED IN EARLIER YEARS, THERE WAS NO MERIT IN VALUATION ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 5 OF PLOTS AS ON 01.04.2011 AND HENCE, NO MERIT IN THE ADDITION. THE CIT(A) ACCEPTED THE CONTENTION OF ASSESSEE AND HELD THAT NO ADDITION IN RESPECT OF UNEXPLAINED INVESTMENT IN RESPECT OF PLOTS PURCHASED IN FINANCIAL YEAR 2004 - 05 AND 2007 - 08 COULD BE MADE IN ASSESSMENT YEAR 2011 - 12. THE SECOND OBJECTION RAISED BY THE ASSE SSEE WAS THAT WHERE BOTH THE PLOTS OF LAND WERE PURCHASED BY WAY OF REGISTERED PURCHASE DEEDS, NO ADDITION COULD BE MADE IN HIS HANDS IN THE YEAR UNDER APPEAL, WITHOUT BRINGING ON RECORD ANY CORROBORATIVE EVIDENCE TO PROVE THAT ANY ADDITIONAL AMOUNT WAS PA ID IN RESPECT OF REGISTERED PURCHASE DEEDS. THE CIT(A) ACCEPTED THE SAID CONTENTION OF ASSESSEE ALSO. THE THIRD CONTENTION RAISED BY THE ASSESSEE WAS THAT THE REFERENCE MADE TO THE DVO WAS NOT JUSTIFIED WHERE THE ASSESSING OFFICER HAS NOT REJECTED THE BO OKS OF ACCOUNT. RELYING ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN SARGAM CINEMA VS. CIT (2010) 328 ITR 513 (SC), THE CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAD MADE REFERENCE OF IMPUGNED PROPERTY FOR VALUATION TO THE DVO WITHOUT REJECTING BOOK RESULTS. IN VIEW THEREOF, THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF RS. 9,30,491/ - WAS DELETED BY THE CIT(A). 6. THE REVENUE IS IN APPEAL AGAINST THE DELETION OF ADDITION AT RS. 9,30,491/ - . 7. THE LEARNED DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. HOWEVER, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE ORDER OF CIT(A). 8. ON PERUSAL OF RECORD AND FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WHERE TH E ASSESSEE HAD PURCHASED PLOTS IN THE MONTH OF JANUARY, 2005 AND ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 6 MARCH, 2008 BY WAY OF REGISTERED PURCHASE DEEDS, THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT FOR ASSESSMENT YEAR 2011 - 12, HAD EXCEEDED HIS JURISDICTION IN MAKING ADDITION IN THE HAN DS OF ASSESSEE ON ACCOUNT OF VALUATION OF SAID PLOT OF LAND AS ON 01.04.2011 IN ORDER TO VERIFY THE INVESTMENT MADE BY THE ASSESSEE. THE CORRECT COURSE IS TO LOOK INTO THE INVESTMENT IS IN THE RELEVANT YEAR S I.E. IN FINANCIAL YEARS 2004 - 05 AND 2007 - 08. N O INVESTMENT HAS BEEN MADE DURING THE YEAR UNDER CONSIDERATION BY THE ASSESSEE FOR PURCHASE OF SAID PLOTS AND ALSO THE ASSESSING OFFICER HAS NOT FOUND ANY EVIDENCE TO THE CONTRARY. ACCORDINGLY, THERE IS NO JUSTIFICATION FOR MAKING THE SAID ADDITION ON THE BASIS OF REPORT OF DVO. THE ASSESSING OFFICER HAD EXCEEDED THE JURISDICTION IN MAKING SAID REFERENCE TO THE DVO FOR VALUING THE COST OF PLOTS OF LAND AS ON 01.04.2011, WHICH ADMITTEDLY, WERE PURCHASED IN JANUARY, 2005 AND MARCH, 2008. THE ASSESSEE HAD A LSO DECLARED THE VALUE OF SAID LAND AND THE COST OF PROPERTY IN SCHEDULE OF ASSETS AND AS PART OF ITS BALANCE SHEET. ONCE THE SAID ASSET HAS BEEN SO DECLARED BY THE ASSESSEE AS PART OF ITS ASSETS, THEN IN CASE ANY REFERENCE IS TO BE MADE TO THE DVO , THE B OOK RESULTS MERITS TO BE REJECTED. IN THIS REGARD, I RELY ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN SARGAM CINEMA VS. CIT (SUPRA), WHEREIN IT WAS HELD AS UNDER: - ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO THE DVO WITHOUT THE B ASIS OF ACCOUNT BEING REJECTED AND THEREFORE, RELIANCE PLACED ON THE REPORT OF THE DVO WAS MISCONCEIVED AND THE IMPUGNED JUDGMENT OF THE HIGH COURT IS SET ASIDE. 9. IN VIEW THEREOF, THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS. 9,30,491/ - ON ACCOUNT OF VALUATION OF LAND IS UPHELD. 10. THE SECOND ADDITION MADE BY THE ASSESSING OFFICER WAS ON ACCOUNT OF INVESTMENT IN CONSTRUCTION OF HOUSE TO THE EXTENT OF RS. 23,99,276/ - . THE PLEA OF THE ASSESSEE BEFORE THE CIT(A) WAS THAT HE HAD NOT RECEIVED COMPLETE ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 7 VALUATION REPORT OF DVO BUT HAD RECEIVED INCO MPLETE VALUATION REPORT . IN VIEW OF THE OBJECTIONS IN RESPECT OF CALCULATION ERRORS, WHICH WERE POINTED OUT TO THE ASSESSING OFFICER, WHO RECTIFIED THE SAME AND REDUCED THE ADDITION TO RS.23,34,276/ - . HOWEVER , NO ADDITION WAS WARRANTED ON THE BASIS OF VALUATION REPORT OF DVO AS THE DVO HAD ONLY ESTIMATED THE VALUE AS ON 01.04.2011 , WHEREAS THE CONSTRUCTION WAS MADE DURING THE FINANCIAL YEARS 2007 - 08 TO 2010 - 11. 11. ANOTHER OBJECTION RAISED BY THE ASSESSEE B EFORE THE CIT(A) WAS THAT THE ASSESSING OFFICER HAD REFERRED THE VALUATION OF HOUSE PROPERTY TO THE DVO WITHOUT REJECTING ITS BOOK RESULTS. THE ASSESSEE ALSO FILED YEAR - WISE CONSTRUCTION EXPENDITURE ALONG WITH COPIES OF BALANCE SHEET AND ACKNOWLEDGEMENT O F INCOME TAX RETURNS SUPPORTING THE CONSTRUCTION EXPENDITURE FOR FINANCIAL YEARS 2007 - 08 TO 2010 - 11 TOTALING RS. 24,85,000/ - . THE CIT(A) ACCEPTED THE PLEA OF ASSESSEE THAT HE HAD SHOWN CONSTRUCTION OF HOUSE DURING THE FINANCIAL YEAR S 2007 - 08 TO 2010 - 11 AND THE VALUE ARRIVED AT BY THE DVO AS ON 01.04.2011 COULD NOT BE APPLIED. THE SECOND CONTENTION OF THE ASSESSEE THAT IN RESPECT OF CONSTRUCTION MADE IN EARLIER YEARS, NO ADDITION COULD BE MADE IN ASSESSMENT YEAR 2011 - 12 WITHOUT BRINING ON RECORD ANY CORROBO RATIVE EVIDENCE OF INCURRING ANY EXPENDITURE IN ADDITION TO THE EXPENDITURE DEBITED TO THE BOOKS OF ACCOUNT WAS ALSO ACCEPTED BY THE CIT(A). THE THIRD OBJECTION OF ASSESSEE THAT WITHOUT REJECTING THE BOOK RESULTS, NO REFERENCE COULD BE MADE TO THE DVO WAS ALSO ACCEPTED BY THE CIT(A), IN VIEW OF RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN SARGAM CINEMA VS. CIT (SUPRA). ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 8 12. THE REVENUE IS IN APPEAL AGAINST THE DELETION OF ADDITION TOTALING RS. 23,99,276/ - . 13. ON PERUSAL OF RECORD AND AFTER ANALYZING TH E FACTUAL ASPECTS OF THE CASE, THE ISSUE WHICH ARISES IS AGAINST THE VALUATION OF COST OF CONSTRUCTION OF PROPERTY WHICH WAS ADMITTEDLY, CONSTRUCTED DURING THE FINANCIAL YEARS 2007 - 08 TO 2010 - 11. IN CASE THE CONSTRUCTION OF PROPERTY HAS TAKEN PLACE OVER A PERIOD OF TIME, THEN FOR DETERMINING THE COST OF CONSTRUCTION OF SUCH PROPERTY , HAS TO BE DETERMINED BY CONSIDERING THE DATA RELATABLE TO SUCH YEARS AND THE CONSTRUCTION COST CANNOT BE DETERMINED BY ADOPTING THE COST AS ON DATE OF COMPLETION, WHICH IN THE PRESENT CASE WA S 31.03.2011. THE ASSESSING OFFICER HAD MADE REFERENCE FOR VALUATION OF COST OF CONSTRUCTION TO THE DVO. BOTH THE ASSESSING OFFICER AND DVO WERE AWARE THAT THE ASSESSEE HAD CONSTRUCTED THE HOUSE DURING THE FINANCIAL YEARS 2007 - 08 TO 2010 - 11 AND IN SUCH CIRCUMSTANCES, THERE IS NO MERIT IN THE VALUATION WORKED OUT BY THE DVO AS ON 01.04.2011 . THE DVO HAD APPLIED THE RATES WHICH WERE APPLICABLE AS ON 01.04.2011 FOR DETERMINING THE COST OF CONSTRUCTION OF PROPERTY, WHICH STARTED CONSTRUCTING IN FINANCIAL YEAR 2007 - 08. THERE IS NO MERIT IN SUCH EXERCISE CARRIED ON BY THE DVO. THE ASSESSEE WAS MAINTAINING YEAR - WISE DETAILS OF CONSTRUCTION EXPENDITURE, WHICH ARE AVAILABLE IN THE BALANCE SHEETS FILED ALONG WITH RETURN OF INCOME FOR THE RESPECTIV E YEARS AND IN VIEW OF SUCH EVIDENCE BEING AVAILABLE, THE COMPUTATION OF VALUATION AS ON 01.04.2011 IS INCORRECT AND THE SAME CANNOT BE APPLIED FOR MAKING THE AFORESAID ADDITION IN THE HANDS OF ASSESSEE. 14. THE SECOND ASPECT OF THE ISSUE IS THAT IN THE A BSENCE OF ANY CORROBORATIVE EVIDENCE FOUND TO ESTABLISH THAT THE ASSESSEE HAD INCURRED EXPENDITURE OVER AND ABOVE THE AMOUNT DISCLOSED IN HIS BOOKS OF ACCOUNT, NO ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 9 ADDITION CAN BE MADE IN THE HANDS OF ASSESSEE BY ENHANCING THE COST OF CONSTRUCTION. 15. LAS TLY, WHERE THE ASSESSEE WAS MAINTAINING BOOKS OF ACCOUNT AND HAD SHOWN THE COST OF CONSTRUCTION FROM YEAR TO YEAR IN HIS BOOKS OF ACCOUNT, THE ASSESSING OFFICER WITHOUT REJECTING THE BOOK RESULTS WAS NOT EMPOWERED TO MAKE ANY REFERENCE TO THE DVO, IN VIEW OF THE RATIO LAID DOWN BY HONBLE SUPREME COURT IN SARGAM CINEMA VS. CIT (SUPRA) . UPHOLDING THE ORDER OF CIT(A) IN THIS REGARD, THE CLAIM OF ASSESSEE IS THUS, ALLOWED. 16. THE LAST ADDITION WHICH HAS BEEN DELETED BY THE CIT(A) IS WITH REGARD TO UNSECURED LOAN OF RS.2,20,000/ - . ADMITTEDLY, THE ASSESSEE HAD NOT FURNISHED THE CONFIRMATION BEFORE THE ASSESSING OFFICER, HENCE THE SAID LOAN WAS TREATED AS UNEXPLAINED AND WAS ADDED AS INCOME IN THE HANDS OF ASSESSEE. HOWEVER, BEFORE THE CIT(A), THE ASSESSEE FU RNISHED CONFIRMATION FROM THE SAID PARTY. THE AMOUNT WAS RECEIVED FROM SMT. KIRTI SHARMA I.E. WIFE OF ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUE, WHICH WAS ALSO REFLECTED IN THE BALANCE SHEET FILED ALONG WITH RETURN OF INCOME. THE ASSESSEE FILED COPY OF ACK NOWLEDGEMENT OF RETURN AND BALANCE SHEET FOR THE YEAR ENDING 31.03.2011 BEFORE THE CIT(A). IT WAS ALSO POINTED OUT BY THE ASSESSEE THAT NO EXPLANATION OR INFORMATION IN RESPECT OF SAID LOAN WAS ASKED FOR BY THE ASSESSING OFFICER AND HENCE, THE DETAILS WER E NOT FILED BEFORE THE ASSESSING OFFICER. THE CIT(A) HAS ACCEPTED THE SAID PLEA OF ASSESSEE ON THE BASIS OF REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER IN RESPECT OF ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND THE ADDITION OF RS.2,20,000/ - HAS BEEN DELETED. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO MERIT IN THE GROUNDS OF APPEAL ITA NO. 1194 /PN/20 1 6 SHRI LADDUGOPAL C SHARMA 10 RAISED BY THE REVENUE IN THIS REGARD. CONSEQUENTLY, GROUNDS OF APPEAL NO.1 TO 3 RAISED BY THE REVENUE ARE THUS, DISMISSED. 1 7 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 26 TH DAY OF AUGUST , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 26 TH AUGUST , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESP ONDENT; 3. ( ) / THE CIT(A) - 2 , NASHIK ; ( ) 4. / THE PR. CIT 2 , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE