Padmini Priya Property Developers and Buildrs, Kakinada V. The ITO, Kakinada

ITA 493/VIZ/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3837 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 13-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SRINIVASA RAO
• Keywords: Unexplained investment
• Section: 133A; 147; 148

Judgement Text

ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . .. . . . . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.493/VIZAG/2016 ( / ASSESSMENT YEAR: 2012-13) PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS KAKINADA ITO, WARD - 2, KAKINADA [PAN NO. AAMFP2272R ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI V. SRINIVASA RAO, DR / DATE OF HEARING : 12.03.2018 / DATE OF PRONOUNCEMENT : 0 4.04.2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2 {CIT(A)}, VI SAKHAPATNAM VIDE ITA NO.92/2015-16/CIT(A)-2/VSP/W-2/KKD/2016-17 DATE D 1.9.2016 FOR THE ASSESSMENT YEAR 2012-13. ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 2 2. THE ASSESSEE FILED RETURN OF INCOME DECLARING TO TAL INCOME OF RS.2,520/- ON 31.12.2012. A SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THE CASE OF SRI M.VENKANNA BABU ON 6.12.2012, WH O IS THE MANAGING PARTNER OF THE ASSESSEE FIRM. DURING THE COURSE OF SURVEY A.O. FOUND THAT THE ASSESSEE FIRM HAD CONSTRUCTED THE RESIDENT IAL COMPLEX CONSISTING OF APARTMENTS IN THE NAME OF VENKATADRI RESIDENCY AND THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNTS ON A REQUEST MADE BY THE ASSESSING OFFICER AT THE TIME OF SURVEY. HENC E, THE ASSESSMENT IS REOPENED U/S 147 OF THE ACT BY ISSUE OF NOTICE U/S 148 OF THE ACT. THE A.O. HAS ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS, BILLS, VOUCHERS RELATING TO CONSTRUCTION OF RESIDENTIAL AP ARTMENT BUILDING AND THE FIRM FAILED TO PRODUCE THE SAME. THEREFORE, TH E A.O. REFERRED THE COST OF CONSTRUCTION TO THE DEPARTMENTAL VALUATION CELL (DVO) AND THE EXECUTIVE ENGINEER, VALUATION CELL, VISAKHAPATNAM V IDE HIS REPORT DATED 28.12.2013 VALUED THE COST OF CONSTRUCTION OF THE S AID PROPERTY AT RS.172.10 LAKHS AND SUBMITTED HIS REPORT. THE DVO HAS ADOPTED THE PLINTH AREA RATE METHOD FOR VALUING THE PROPERTY. THE A.O. DURING THE ASSESSMENT PROCEEDINGS OBSERVED THAT 93.25% OF THE CONSTRUCTION WAS COMPLETED BY THE END OF FINANCIAL YEAR 2011-12, REL EVANT TO THE ASSESSMENT YEAR 2012-13, HENCE, PROPORTIONATE COST OF CONSTRUCTION AMOUNTING TO RS.1,00,48,325/- WAS TAKEN AS COST OF CONSTRUCTION FOR THE ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 3 ASSESSMENT YEAR 2012-13 AND ACCORDINGLY, TREATED TH E DIFFERENCE AMOUNT OF RS.50,06,106/- AS UNEXPLAINED INVESTMENT AND ADDED BACK TO THE RETURNED INCOME. 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND DISPUTED THE COST OF CONSTRUC TION AND ALSO REQUESTED FOR REBATE TOWARDS SELF SUPERVISION AND T HE RATE DIFFERENCE. THE LD. CIT(A) DIRECTED THE A.O. TO ASSESS THE UNDI SCLOSED INVESTMENT YEAR WISE PROPORTIONATE TO THE INVESTMENT MADE B Y THE ASSESSEE FROM THE ASSESSMENT YEAR 2009-10 TO 2012-13 TO ARRIVE AT THE UNDISCLOSED INCOME RELATING TO THE RELEVANT ASSESSMENT YEAR. TH E LD.CIT(A) DID NOT ALLOW THE REBATE TOWARDS SELF SUPERVISION AND THE R ATE DIFFERENCE. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE THIS TRIBUNAL AND RAISED THE FOLLOWING GROUN DS OF APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, VISAKHAPATNAM IS CONTRARY TO THE FACTS AND ALSO THE LAW APPLICABLE TO THE FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) OUGHT TO HAVE HELD THAT THE NOTICE ISSUED U/S 148 IS NOT IN ACCORDANCE WITH LAW AND IS LIABLE TO BE QUASHED AS INVALID AND CONSEQUENTLY THE ENTIRE R E-ASSESSMENT PROCEEDINGS ARE LIABLE TO BE QUASHED AS VOID AB INI TIO. 3. A. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN PARTLY SUSTAINING THE ADDITION TO THE EXTENT OF RS.13,09,6 81/- OUT OF TOTAL OF RS.50,06,106/- -MADE BY THE ASSESSING OFFICER TOWAR DS ALLEGED UNEXPLAINED INVESTMENT IN COST OF CONSTRUCTION. B. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO DETERMINE THE UN EXPLAINED INVESTMENT TOWARDS COST OF CONSTRUCTION FOR THE A.Y.S 2010-11 AND 2011-12 WHICH WAS NOT THE SUBJECT MATTER OF - APPEAL BEFORE HIM. ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 4 C. THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) OUGHT TO HAVE GRANTED REBATE 15% TOWARDS DIFFERENCE IN CPWD RATES AND LOC AL RATES AND @ 10% REBATE TOWARDS SELF-SUPERVISION. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TI ME OF APPEAL HEARING. 5. GROUND NOS.1 & 4 ARE GENERAL IN NATURE, WHICH DO ES NOT REQUIRE SPECIFIC ADJUDICATION. 6. GROUND NOS. 2, 3(A) & 3(B) ARE NOT PRESSED BY TH E LD. A.R. DURING THE APPEAL HEARING, HENCE, GROUND NOS.2, 3(A) & 3(B) AR E DISMISSED AS NOT PRESSED. 7. THE ONLY GROUND REMAINED TO BE ADJUDICATED IS GROUND NO.3(C), WHICH RELATES TO THE REBATE OF 15% TOWARDS DIFFEREN CE IN COST OF CONSTRUCTION WITH CPWD RATE AND 10% FOR SELF SUPERV ISION. DURING THE APPEAL HEARING, THE LD. A.R. ARGUED THAT THE ASSESS EE IS IN THE BUSINESS OF CONSTRUCTING THE RESIDENTIAL APARTMENTS AND HE I S HAVING THOROUGH KNOWLEDGE AND VAST EXPERIENCE IN THIS LINE OF ACTIV ITY. THE LD. A.R ARGUED THAT WITH HIS EXPERIENCE AND KNOWLEDGE THEY BOUGHT THE MATERIALS AT LOWEST COST AND REDUCED THE WASTAGES TO THE MAXIMUM LEVEL ,THUS REDUCED THE COST OF CONSTRUCTION, HENCE REQUESTED F OR REBATE FOR SELF- SUPERVISION. THE LD. AR SUBMITTED THAT BOTH THE LD. DVO AND THE LD. CIT(A) HAVE NOT ALLOWED ANY REBATE FOR SELF SUPERVI SION. THE RATES OF CPWD ARE ABNORMAL AND THE COST OF CONSTRUCTION CANNO T BE COMPARED WITH THE ASSESSEES COST OF CONSTRUCTION OR FOR THA T MATTER VERY HIGH ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 5 COMPARED TO MARKET RATE OF CONSTRUCTION. THE LD A.R FURTHER SUBMITTED THAT THE THERE ARE HIDDEN COSTS IN CPWD CONSTRUCTIO N SINCE THE CONTRACTOR EXECUTES THE WORK. THE CPWD TYPE CONSTRU CTION IS ENTIRELY DIFFERENT WITH THAT OF ASSESSEES CONSTRUCTION, HEN CE REQUESTED FOR ALLOWING CREDIT FOR SELF SUPERVISION @ 10% AND RATE DIFFERENCE 15%. THE LD. A.R. FURTHER ARGUED THAT THE DVO HAS ADOPTE D THE COST OF CONSTRUCTION ADOPTING THE PLINTH AREA RATE OF CPWD. ADOPTION OF PLINTH AREA RATE IS NOT CORRECT AND IT IS PURELY A GUESS W ORK SINCE THE CONTRACTS OF CPWD INVOLVE THE PROFIT OF CONTRACTORS MARGIN, HENCE, ARGUED THAT THERE IS A VAST DIFFERENCE IN COST OF CONSTRUCTION OF CPWD BUILDINGS AND THE RESIDENTIAL COMPLEX BUILT BY THE DEVELOPERS. T HE LD. A.R. RELIED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF ITO WA RD-1 GUDIVADA VS. K. SATISH IN ITA NO.49/VIZAG/2013 DATED 4.12.2015. ON THE OTHER HAND, LD. D.R. SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE IS ENGAGED IN THE CONSTRUCTION OF RESIDENT IAL APARTMENTS AND IS HAVING ENOUGH KNOWLEDGE OF CONSTRUCTION AND IS CAPA BLE OF REDUCING THE COST OF CONSTRUCTION BY PROCURING THE MATERIALS AT REASONABLE COST AND AVOID THE WASTAGE. WHILE ARRIVING THE COST OF CONST RUCTION BOTH THE DVO AND THE A.O. DID NOT CONSIDER THESE ISSUES. SIMIL ARLY, THERE IS A RATE ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 6 DIFFERENCE IN CPWD & STATE PWD RATES. THE CPWD GIVE S THE CONSTRUCTION OF ITS WORKS TO THE PRIVATE CONTRACTOR S AND THE PRIVATE CONTRACTORS INCLUDE THEIR PROFIT MARGIN IN CPWD WORK S. THIS TRIBUNAL IN THE CASE CITED SUPRA ON THE SIMILAR FACTS AND CIRCU MSTANCES HELD THAT THE ASSESSEE IS ENTITLED FOR 15% REDUCTION DEDUCTION TO WARDS RATE VARIATION FOR CPWD RATES AND FURTHER REDUCTION TOWARDS SELF S UPERVISION @10% FROM THE VALUE ESTIMATED BY THE DVO AFTER APPLYING THE CPWD RATES. FOR READY REFERENCE, WE EXTRACT PARA NOS.9 TO 11 OF THE CITED ORDER WHICH READS AS UNDER; 9. THE ASSESSEE RELIED UPON THE JUDGEMENT OF COORDI NATE BENCH OF THIS TRIBUNAL IN THE CASE OF SALMA A. MEHDI IN ITA NO.69 7 & 698/HYD/1995. WE HAVE EXAMINED THE CASE LAWS RELIED UPON BY THE ASSESSE, IN THE LIGHT OF THE FACTS OF THE PRESENT CASE. THE COORDINATE BENCH OF THIS TRIBUNA L, 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 CBDT. . HE APPLIED THE PLINTH AREA OF NEW DELHI AS FIXED IN 19 76 AND APPROVED BY THE GOVERNMENT OF INDIA BY DULY ENHANCI NG THE BASIC RATE OF SIMILAR STRUCTURES WITH APPROPRIATE C OST INDEX AS APPLICABLE TO THE LOCALITY DURING THE PERIOD OF CON STRUCTION. THE VALUATION DID NOT APPEAR TO HAVE TAKEN INTO CONSIDE RATION THE LOCAL RATES THAT ACTUALLY EXISTED DURING THE PERIOD FOR C ONSTRUCTION. IT IS COMMON KNOWLEDGE CPWD RATES OF NEW DELHI ARE FAR HI GHER 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 F ACT THAT THE CPWD RATES OF NEW DELHI ARE ALWAYS HIGHER THAN THE LOCAL RATES, WE FEEL THAT IT WOULD BE JUST AND REASONABLE TO GIVE AN OVE RALL 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 H IGHER RATE OF CPWD OF NEW DELHI. FURTHER, THE VALUATION OFFICER D ID NOT ALLOW ANY DEDUCTION TOWARDS PERSONAL SUPERVISION. THE FIRST A PPELLATE AUTHORITY ALLOWED 10% REDUCTION ON ACCOUNT OF SAVINGS BY PERSONAL SUPERVI SION APPEARS TO BE QUITE REASONABLE. IF WE DEDUCT 10% TO WARDS PERSONAL SUPERVISION AND 15% ON ACCOUNT OF THE HIGHER RATE A DOPTED BY THE ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 7 VALUATION OFFICER, THE ESTIMATE OF COST OF CONSTRUC TION DETERMINED BY THE VALUATION OFFICER COMES DOWN TO RS.5,16,7501/-. EVE N IF WE TAKE AVERAGE OF COST OF CONSTRUCTION OF RS.68900 DETERMI NED 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 CONSTRUCTIO N OF RS.5,16,750/- ARRIVED AT BY US AFTER GIVING 15% REDUCTION FOR HIG HER 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 CONSIDERING THE SIMILAR ISSUE OF APPLICABILITY OF STATE PWD RATES AND DEDUCTION FOR SELF SUPERVISION CHARGES, H AS OBSERVED AS UNDER: PLINTH AREA RATE AS PRESCRIBED BY CBDT OF COURRSE CONTAIN PROVISIONS FOR COST INDEXING AND ADJUSTMENT OF LOCA TION VARIATION TO ARRIVE AT COST OF CONSTRUCTION OF A PARTICULAR L OCATION. BUT THE FACTS REMAINS THAT SUCH VALUATION RESTS CPWD RATES FIXED ON UNIFORM BASIS. AS OBSERVED IN THE CASE OF ITO VS. T EK CHAN, 52 LTD 1995 BY THE JAIPUR BENCH THAT CPWD RATES ARE GE NERAL IN THEIR NATURE AND PURPOSE IN VIEW OF THE WIDE AREA O F THEIR APPLICABILITY, THE STATE PWD RATES TAKE INTO ACCOUN T THE SPECIAL CONDITIONS IN A PARTICULAR AREA IN THE TERRITORIES OF THE STATE. THE AVAILABILITY OF COST FOR 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 FOLLO W THE STATE PWD RATES WHILE ESTIMATING 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 CONSTR UCTION OF A PARTICULAR PROPERTY, VERY SPECIFIC PARAMETERS ARE SENT IN THE CONTRACT FOR THE PURPOSE OF EACH INDIVIDUAL PRO JECT AND, HENCE, IT IS NOT CORRECT TO SAY THAT THE STATE PWD RATES A RE THE PROPER BASIS TO ARRIVE AT THE COST OF CONSTRUCTION. THE AP PLICABILITY OF CPWD RATE WITH LOCAL INDEXING CAME UP BEFORE THE TR IBUNAL 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 TRI BUNAL VIDE PARAS 10 OF THIS ORDER HELD THAT IN ARRIVING AT PRO PER COST OF CONSTRUCTION, IT WOULD BE JUSTIFIED IF A DISCOUNT O F 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 CBDT. . HE APPLIED THE PLINTH AREA OF NEW DELHI AS FIXED IN 19 76 AND APPROVED BY THE GOVERNMENT OF INDIA BY DULY ENHANCI NG THE BASIC RATE OF SIMILAR STRUCTURES WITH APPROPRIATE C OST INDEX AS APPLICABLE TO THE LOCALITY DURING THE PERIOD OF CON STRUCTION. THE ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 8 VALUATION DID NOT APPEAR TO HAVE TAKEN INTO CONSIDE RATION THE LOCAL RATES THAT ACTUALLY EXISTED DURING THE PERIOD FOR C ONSTRUCTION. IT IS COMMON KNOWLEDGE CPWD RATES OF NEW DELHI ARE FAR HI GHER 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 F ACT THAT THE CPWD RATES OF NEW DELHI ARE ALWAYS HIGHER THAN THE LOCAL RATES, WE FEEL THAT IT WOULD BE JUST AND REASONABLE TO GIVE AN OVE RALL 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 H IGHER RATE OF CPWD OF NEW DELHI. FURTHER, THE VALUATION OFFICER D ID NOT ALLOW ANY DEDUCTION TOWARDS PERSONAL SUPERVISION. THE FIRST A PPELLATE AUTHORITY ALLOWED 10% REDUCTION ON ACCOUNT OF SAVINGS BY PERSONAL SUPERVI SION APPEARS TO BE QUITE REASONABLE. IF WE DEDUCT 10% TO WARDS PERSONAL SUPERVISION AND 15% ON ACCOUNT OF THE HIGHER RATE A DOPTED BY THE VALUATION OFFICER, THE ESTIMATE OF COST OF CONSTRUC TION DETERMINED BY THE VALUATION OFFICER COMES DOWN TO RS.5,16,7501/-. EVE N IF WE TAKE AVERAGE OF COST OF CONSTRUCTION OF RS.68900 DETERMI NED 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 CONSTRUCTIO N OF RS.5,16,750/- ARRIVED AT BY US AFTER GIVING 15% REDUCTION FOR HIG HER 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 AFORESA ID ORDER OF THE TRIBUNAL AND HOLD THAT CIT(A) WAS JUSTIFIED IN UPHOLDING PLINTH AREA BASIS FOR DETERMINING COST OF CONSTRUCT ION OVER THE CPWD RATES AND FURTHER REDUCTION OF 10% 0 ON ACCOUNT OF PERSONA! SUPERVISION. WE DO NOT FIND FORCE IN DEPARTMENT'S S UBMISSION THAT THE OBJECT OF DETERMINING THAT RATE OF 10% FOR PERS ONAL SUPERVISION WAS GIVEN ONLY BECAUSE, THE ASSESSEE IN THAT CASE H IMSELF WAS AN ENGINEER. THAT MAY BE A FACT WHEN A BUT PROPERTY BE ING CONSTRUCTED, 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 ABO UT 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 L ARGER AREA IS BEING CONSTRUCTED, THERE WILL BE COST ECONOMY IN MANY WAY S FOR BULK PURCHASES AND A BETTER BARGAINING POWER AND THE DIS COUNT 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 DISCOU NT AT 5% WOULD BE REASONABLE IN ESTIMATING THE COST OF CONSTRUCTION. WE DIRECT ACCORDINGLY. ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 9 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 VARIATION B ETWEEN CPWD AND STATE PWD AND A FURTHER 10% DEDUCTION TOWARDS SELF-SUPERVISIO N CHARGES FROM THE VALUE ARRIVED BY THE DVO APPLYING THE CPWD RATES. THE CI T(A), AFTER CONSIDERING THE FACTS THAT THE ASSESSE HAS MAINTAINED BOOKS OF ACCO UNTS AND BILLS FOR CONSTRUCTION, SCALED DOWN THE ADDITION TO RS.7,25,000/-. WE DO NO T 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. 7. SINCE THE FACTS ARE SIMILAR, RESPECTFULLY FOLLOW ING THE VIEW TAKEN BY THE COORDINATE BENCH, WE DIRECT THE A.O. TO ALLOW T HE RATE DIFFERENCE OF 15% AND SELF SUPERVISION CHARGES TO THE EXTENT OF 1 0% FROM THE COST OF CONSTRUCTION DETERMINED BY THE DVO AND RECOMPUTE TH E UNDISCLOSED INVESTMENT YEAR WISE. ACCORDINGLY THE APPEAL OF THE ASSESSEE ON THIS GROUND IS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 4 TH APR18. SD/- SD/- ( . ) ( . .. . . . . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 04.04.2018 VG/SPS ITA NO.493 /VIZAG/2016 PADMINI PRIYA PROPERTY DEVELOPERS AND BUILDERS, KAK INADA 10 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT M/S. PADMINI PRIYA PROPERTY DEVE LOPERS AND BUILDERS, D.NO.68-2-1, ASHOK NAGAR, KAKINADA 2. / THE RESPONDENT THE ITO, WARD-2, KAKINADA 3. + / THE PRINCIPAL CIT-2, VISAKHAPATNAM 4. + ( ) / THE CIT (A)-2, VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM