Anil Talwar, Chandigarh V. ACIT, Chandigarh

ITA 586/CHANDI/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5203 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 21-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR GULSHAN RAJ
• Assessee Lawyers: Not Found
• Keywords: Unexplained investment; Value adopted by valuation officer; Business expenditure; Search and seizure; Document seized; Opportunity of being heard; Cost of acquisition; Corroborative evidences; Valuation report; Documents seized
• Section: 153A; 234B; 6; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND SHIR B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NOS. 722,723,724,725,726 /CHD/2013 ( A.Y. : 2005-06, 2006-07,2008-09, 2009-10) THE DCIT, VS. SHRI ANIL TALWAR, CENTRAL CIRCLE-II, # SCF 14-15, SECTOR 22D, CHANDIGARH. CHANDIGARH. PAN NO. : AAPPT2603R & ITA NOS. 586,587,588,589 & 590/CH D/2013 ( A.Y. : 2005-06, 2006-07,2007-08, 2008-09 & 2009-10) SHRI ANIL TALWAR, VS THE ACIT, S/O SHRI S.P.TALWAR, CENTRAL CIRCLE-II, # SCF 14-15, SECTOR 22D, CHANDIGARH. CHANDIGARH. PAN NO. : AAPPT2603R (APPELLANT) (RESPONDENT) DEPARTMENT BY : DR. GULSHAN RAJ, CIT-DR ASSESSEE BY : SHRI VED JAIN DATE OF HEARING : 11.12.2017 DATE OF PRONOUNCEMENT : 08/02/2018 ORDER PER BENCH THESE APPEALS AND CROSS APPEALS (TOTALING 10 IN NUMBER, 5 BY THE REVENUE AND 5 BY THE ASSESSEE) PERTAINING TO 200506 T O 200910 ASSESSMENT YEAR ARE BEING DECIDED BY A COMMON ORDER FO R THE SAKE OF CONVENIENCE. 2. IT WAS THE STAND OF THE PARTIES BEFORE THE BENCH TH AT THE ISSUES RAISED IN THE RESPECTIVE APPEALS ARE IDENTICAL EXCEPT FOR O NE SEPARATE INDEPENDENT GROUND RAISED BY THE ASSESSEE (GROUND NO. 13 IN ITA 583 IN 200708 ASSESSMENT YEAR). ACCORDINGLY THE PARTIES HAVE TAKEN THE STAND THAT THE ARGUMENTS IN SUPPORT OF THE RESPECTIVE GROUND S WOULD REMAIN IDENTICAL IN EACH OF THESE APPEALS. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 2 OF 57 3. ADDRESSING THE GROUNDS THE LD. AR SUBMITTED THAT GR OUND NO. 1 & 3 IN EACH OF THE APPEALS FILED BY THE ASSESSEE ARE NOT PR ESSED. IN SUPPORT OF THE SAID SUBMISSION THE LD. AR ON INSTRUCTION OF THE AS SESSEEE HAS NOTED THE SAME UNDER HIS SIGNATURE IN THE RESPECTIVE AP PEALS FILED BY THE ASSESSEE. ACCORDINGLY THE GROUND NOS. 1 TO 3 IN EACH OF THE APPEALS OF THE ASSESSEE ARE DISMISSED AS NOT PRESSED. 4. CONSIDERING THE RECORD WE NOTE THAT IN THE RESPECTIV E APPEALS COMMON FACTS ARE INVOLVED ACCORDINGLY ACCEPTING THE SUBM ISSIONS OF THE PARTIES WE PROPOSE TO ADDRESS THE FACTS AS SET OUT IN 2005-06 ASSESSMENT YEAR WHICH IS THE BASE APPEAL. THE RESPECTIVE GROUNDS RAISED BY THE ASSESSEE AND THE REVENUE IN ITA/586/CHD/2016 AND 723 /CHD/2013 IN 2005 06 ASSESSMENT YEAR READ AS UNDER : ITA 586/CHD/2016 :ASSESSEE'S APPEAL : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORD ER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] IS BA D BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN REJECTING THE CONTENTIO N OF THE APPELLANT THAT THE PROCEEDINGS INITIATED UNDER SECTION 153A AND ASSESS MENT FRAMED UNDER SECTION 153A/143(3) A,RE IN VIOLATION OF THE STATUTORY COND ITIONS AND THE PROCEDURE PRESCRIBED UNDER THE LAW AND AS SUCH THE SAME IS BA D AND LIABLE TO BE QUASHED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PRO CEEDINGS INITIATED UNDER 153A AND ASSESSMENT FRAMED THEREAFTER UNDER SECTION 153A ARE BAD IN THE EYE OF LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND D URING THE COURSE OF THE SEARCH. 4(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ADDITION OF RS. 1,28, 01,1 01 /- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CONSTRUCTION AND FURNISHING OF HO USE NO. 346, SECTOR -9, CHANDIGARH. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN IGNORING THE COST OF CONSTRUCT ION DETERMINED BY A SCIENTIFIC PROCESS BY THE VALUATION OFFICER UNDER SECTION 142(2A) OF THE INCOME TAX ACT. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ESTIMATING THE TOTAL COST O F CONSTRUCTION AT RS. 8, 35, 50,000/-AS AGAINST RS. 2, 23, 92, 375/- DECLARED BY THE ASSESSEE. 6(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ESTIMATING THE TOTAL COST OF C ONSTRUCTION AT RS. 6, 45, 00, 000/-BY ASSUMING RS. 3000/- PER SQ. FT. COST FOR THE TOTAL AREA OF 2 1 ,500 SQ. FT. I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ADDING A SUM OF RS.300/- PER S Q. FT. AS ADDITIONAL COST FOR THE STONE WORK AND THAT TOO FOR THE ENTIRE AREA OF 21500 SQ. FT. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ADDING A SUM OF RS.200/- PER S Q. FT. AS ADDITIONAL COST FOR THE WOOD WORK AND THAT TOO FOR THE ENTIRE AREA OF 21500 SQ. FT.. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ADDING A SUM OF RS.50/- PER SQ . FT. AS ADDITIONAL COST FOR PLASTER OF PARIS AND THAT TOO FOR THE ENTIRE AREA OF 21500 SQ. FT.. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 3 OF 57 (V) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ADDING A SUM OF RS.100/- PER S Q. FT. AS ADDITIONAL COST FOR SANITARY WORK AND THAT TOO FOR THE ENTIRE AREA OF 21500 SQ. FT.. (VI) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ADDING A SUM OF RS.200/- PER S Q. FT. AS ADDITIONAL COST FOR ELECTRICAL WORK AND THAT TOO FOR THE ENTIRE AREA OF 21500 SQ. FT.. (VII) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ADDING A SUM OF RS.100/- PER S Q. FT. AS ADDITIONAL COST FOR BOUNDARY WALL AND THAT TOO FOR THE ENTIRE AREA OF 21500 SQ. FT.. (VIII) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ADDING A SUM OF RS.500/- PER SQ. FT. AS ADDITIONAL COST FOR ARCHITECTURAL DESIGN, VASTU COMPLIANCE, ETC. 7. IN THE ALTERNATIVE AND WITHOUT PREJUDICE T O THE ABOVE, THE TOTAL OF THE ABOVE STILL IS NOT RS.3000 PER SQ. FT. AS ASSUMED BY THE CIT(A). 8(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN ESTIMATING AN AMOUNT OF RS.1,8 8,50,000/- ON ACCOUNT OF FURNISHING OF THE HOUSE. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF AIR CONDITIONI NG AT RS.31 LAC. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF GENERATO R SET AT RS.8 LAC. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF GYMNASIUM AT R S.12 LAC. (V) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF SWIMMING POOL AT RS.8.5 LAC. (VI) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF FURNITURE AT R S.51 LAC. (VII) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF ELECTRONIC GAD GETS AT RS.10 LAC. (VIII) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF PAINTING AT RS .30 LAC. (IX) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF LANDSCAPING AT RS.19 LAC. (X) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF BILLIARD ROOM AT RS.3 LAC. (XI) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF BIO MATRIX AT RS.3 LAC, (XII) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF LIFT AT RS.8 L AC. (XIII) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ESTIMATING THE COST OF DISCOTHEQUE AT RS.5 LAC. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE VAR IOUS ADDITIONS CONFIRMED BY THE CIT(A) ARE MULTIPLE ADDITIONS OF THE SAME ITEM. 10(I) ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN PROPORTIONATELY ALLOCATING THE ESTIMA TED COST OF CONSTRUCTION FOR THE YEAR UNDER CONSIDERATION WITHOUT THERE BEING ANY MATERIA L OR EVIDENCE OF ASSESSEE HAVING MADE SUCH INVESTMENT IN THE YEAR UNDER CONSIDERATIO N. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN MAKING AN ADDITION IN THE YEAR UNDER CONSIDERATION DESPITE THE FACT THAT NO MATERIAL WHATSOEVER HAS BEEN FOUND, NOR ANY EVIDENC E INDICATING THAT THE ASSESSEE HAS INCURRED ANY EXPENDITURE OVER AND ABOVE WHAT HAS BE STATED IN THE RETURN OF INCOME. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 4 OF 57 11(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITIONS CONFIRMED IN THE YEAR UNDER CONSIDERATION ON ACCOUNT OF FURNISHING IS UNTENABLE IN VIEW OF THE FACT THAT NO SUCH FURNISHING HAS TAKEN PLACE DURING THE YEAR UNDER CO NSIDERATION. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN IGNORING THE CONTENTION OF THE ASSESSEE THAT ADDITION ON ACCOUNT OF THE FURNISHING OF THE HOUSE CANNOT BE SPREAD OVER T HE PERIOD OF CONSTRUCTION OF THE HOUSE AS CONSTRUCTION AND FURNISHING ARE TWO DIFFER ENT ACTIVITIES AND FURNISHING TAKES PLACE ONLY AFTER THE HOUSE HAS BEEN CONSTRUCTED. 12. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADD ITIONS CONFIRMED BY THE LEARNED CIT(A) IS UNTENABLE IN VIEW OF THE PROVISIO NS OF SECTION 69B OF THE ACT WHEREBY THE ADDITION ON ACCOUNT OF UNEXPLAINED INVE STMENT CAN BE MADE ONLY IN THE YEAR IN WHICH THE ASSESSEE IS FOUND TO BE THE O WNER OF SUCH INVESTMENT. 13. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE FACT THAT THE ASSE SSMENT FOR THE YEAR UNDER CONSIDERATION HAVE BEEN SCRUTINIZED UNDER SECTION 1 43(3) AND AS SUCH THE LEARNED CIT(A) WAS NOT JUSTIFIED IN REVIEWING ITS O WN ORDER. 14(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CHARGING INTEREST UNDER SECTIONS 234A, 234B, 234C AND 234D OF THE ACT. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CHARGING INTEREST UNDER SECTION 234B FROM THE 1 ST DAY OF THE ASSESSMENT YEAR AS AGAINST FROM THE DAT E OF THE REGULAR ASSESSMENT IN TERMS OF SECTION 234B(3) OF THE ACT. 15. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. ITA 722/CHD/2013 : REVENUES APPEAL : I) THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS FA CT OF THE CASE BY RESTRICTING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT I N CONSTRUCTION AND FURNISHING OF THE HOUSE NO. 346, SECTOR 9, CHANDIGA RH TO RS 6,09,57,623/- INSTEAD OF UNEXPLAINED INVESTMENT OF RS 20,08,57, 623/- SPREAD OVER FROM A.YRS. 2005-06 TO 2009-10. II) THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY REVISING THE AMOUNT OF UNEXPLAINED INVESTMENT WORKED OUT BY THE ASSESSING OFFICER WHEN THE ASSESSEE HAS FAILED TO FURNISH ANY DO CUMENTARY EVIDENCE OR BILLS REGARDING EXPENSES INCURRED TOWARDS CONSTRUCTION, DECORATION AND FURNISHING OF THE HOUSE. III) THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS BY ADOPTING THE RATE OF CIVIL CONSTRUCTION INCLUDING FINISHING WORK AT R S 3000- PER SQ FT. INSTEAD OF RS 7500/- PER SQ FT ADOPTED BY THE AO A ND THAT TOO WITHOUT ANY DOCUMENTARY EVIDENCE. IV) THAT THE APPELLANT CRAVES TO ADD, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 5. THE RELEVANT FACTS OF THE CASE ARE THAT A SEARCH OPE RATION UNDER SECTION 132 (1) OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT ON 24/07/2009 AT THE RESIDENTIAL/BUSINESS PREMISES OF THE TA LWAR GROUP OF CASES WHICH INCLUDED THE CASE OF THE ASSESSEE. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RETURNED AN INCOME OF RS. 47,25,447/- UNDER SECTION 139 OF THE INCOME TAX ACT ON 31/10/2005 WHICH WAS CONSIDERED AND ACCEPTED BY AN ORDER UNDER SECTION 143 (3). IN RESPONSE ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 5 OF 57 TO THE NOTICE UNDER SECTION 153A(1) THE ASSESSEE AGAIN R ETURNED AN INCOME OF RS. 47,25,447/- INCLUDING AGRICULTURAL INCOME OF RS. 31,500/-. THE AO ON ACCOUNT OF REASONS SET OUT HEREINAFTER MADE THE ADDITION UNDER CHALLENGE ON ACCOUNT OF INVESTMENT MADE IN HOUSE N O. 346 SECTOR-9,CHANDIGARH. THE SPECIFIC REASON SET OUT IN UNNUMB ERED PAGE-4 OF THE ASSESSMENT ORDER IS EXTRACTED HEREUNDER : 4. INVESTMENT IN CONSTRUCTION OF H. NO. 346 SECTOR-9, CHANDIGARH DURING THE COURSE OF SEARCH PROCEEDINGS CARRIED OUT IN HOUSE OF THE ASSESSEE ON 24.07.2009, IT WAS FOUND THAT H. NO. 346, SEC- 9D, CHANDIGARH WAS BUILT BY THE ASSESSEE. THE HOUSE IS SPREAD OVER AN AREA OF 3067 SQ YARDS ( 6 KANALS), THREE AND HALF STOREYED PALATIAL HOUSE HAVING COVERED AREA OF 21,500 SQ FEET. UNDOUBTEDLY THIS IS A HOUSE OF DREAM AND HAS BEEN BUILT WITH HUGE INVES TMENT IN LAST THREE TO FOUR YEARS. AFTER SEEING THE VIDEOGRAPHY MADE ON THE DAT E OF SEARCH, THE QUESTIONS WHICH EMERGED:- * HAVE YOU SEEN HOUSE WITH BIOMATRIX CENTRAL LOCKIN G SYSTEM WITH TOUCH SCREEN FACILITY OPERATED JAY ONLY FOUR MEMBERS OF T HE HOUSE? * HAVE YOU SEEN A HOUSE) WITH LUSH GREEN LAWN, LAND SCAPE DESIGNED BY FAMOUS LANDSCAPE ARTIST SMT. GEETA SINGH RUNNING IN TO 4 KANALS HAVING BEAUTIFUL GARDENS, ELEGANT PARKING PLACE AND A GREE N PARADISE? * HAVE YOU SEEN A HOUSE WITH GYM WITH MODERN TRAINING EQUIPMENT, BAR, SWIMMING POOL, DISCOTHEQUE, JACUZZI, STEAM BATH, MA SSAGE PARLOUR, BILLIARD ROOMS AND A SPLENDID TERRACE GARDEN FULL OF BEAUTIF UL FLOWERS AS WELL AS PLANTS- YELLOW ALLEMANDES, PETUNIA, MARIGOLD AND PHOENIX PA LMS? * HAVE YOU SEEN A HOUSE SPREAD INTO 6 KANALS, THREE AND HALF STOREYED BUILT WITH MODERN ARCHITECTURE, FIVE STAR FACILITIES AND HAVING ITALIAN MARBLES, LATEST GADGETS, MUSIC SYSTEM AND LATEST UPHOLSTERY EXQUISITE PAINTINGS.? IF YOU HAVEN'T, PLEASE GO THROUGH THE PHOTOGRAPHS A ND VIDEOGRAPHY ANNEXED WITH THIS ASSESSMENT ORDER. AND, IF YOU HAVE OBSERVED THESE V IDEOGRAPHY AND PHOTOGRAPHS, IT IS QUITE UNBELIEVABLE) THAT THE ENTIRE HOUSE WITH F URNISHING HAS JUST REQUIRED AN INVESTMENT OF BARELY 2 CRORES. BEFORE YOU READ THE DISCUSSION IN MY ASSESSMENT OR DER, YOU MUST SEE THE PHOTOGRAPHS AND VIDEOGRAPHY AND THEY ARE EVIDENCES ON WHICH I P LAN MY DISCUSSION TO ARRIVE AT THE VALUE OF THIS MAGNIFICENT HOUSE. THE PHOTOGRAPHS AN D VIDEOGRAPHS ARE ANNEXED AT ANNEXURE A-1 (PART -I) AND PART-LL AND ANNEXURE A-2 RESPECTI VELY. YOU WOULD BE SURPRISED THAT SUCH A MAGNIFICENT SPLE NDID LOOKING HOUSE HAS BEEN BUILT, AFRESH FOR JUST OVER RS 2 CRORES, AS SHOWN IN THE B OOKS OF ACCOUNT OF THE ASSESSEE. SUCH IS STATE OF AFFAIRS WHERE CONCEALMENT OF A LARGE EXTEN T IN BUILDING A HOUSE HAS BEEN DETECTED WHEN THE INCOME TAX DEPARTMENT CONDUCTED A SEARCH O PERATION U/S 132 OF THE I.T. ACT, 1961 IN H.NO 346, SECTOR-9 ON 24.07.2009. SOME OF THE PHOTOGRAPHS TAKEN DURING THE SEARCH ARE REPRODUCED BELOW OR REFERENCE 5.1 FOR THE SAKE OF COMPLETENESS, THE FOLLOWING EXTRACT OF THE ASSESSMENT ORDER IS REPRODUCED HEREUNDER FROM UNNUMBE RED PAGE 8 OF THE SAME : 5. THE EXCLUSIVE FEATURE OF THE HOUSE AS VISIBLE IN THE VIDEOGRAPHY AND PHOTOGRAPHS ARE HIGHLIGHTED BELOW:- ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 6 OF 57 (A) THE HOUSE HAS BEEN ILLUMINATED WITH NUMEROUS CR YSTAL CHANDELIERS, DINING ROOM CHANDELIERS, PENDANT LIGHTS, ISLAND LIGHTS, WALL SC ONCES AND LIGHT FIXTURES HAVE BEEN INSTALLED IN THIS HOUSE. CHANDELIERS OR PENDANT LIG HTS WITH SPOTLIGHTS AND DOWN LIGHTS HAVE BEEN USED TO ILLUMINATE PARTICULAR OBJECTS OR ACCENT CERTAIN AREAS OF A ROOM. DOWN LIGHTS HAVE BEEN EXTENSIVELY USED TO ACCENT THE BIL LIARD TABLE AND OTHER DECORATIVE PIECES AND SURFACE. SPOTLIGHTS HAVE BEEN USED TO BRING OUT THE FULL BEAUTY OF SPECIAL WORKS OF ART, WHICH ARE FOUND IN ALMOST EVERY NOOK AND CORNER OF THE HOUSE. (B) THERE ARE MORE THAN 40 PAINTINGS OF THE RENOWNED AR TIST, HAVING ORIGINAL ART WORK. A LOOK AT THE PAINTINGS REVEALS THAT THE APPARELS IN THE PAINTINGS ARE DONE WITH SEMI-PRECIOUS STONE, LACES AND THREADS HAVING EXCLU SIVE PRICES. THERE ARE, FOR INSTANCES, BUDHA STATUES MADE IN MARBLE. IN SOME OF THE PAINTI NGS GOLD FOIL HAS BEEN USED. PAINTINGS IN CLASSIC, ANTINQUE AND EMBOSSED STYLE A DORN THE WALLS OF THE HOUSE. THERE ARE SEVERAL TANJORE PAINTINGS. (C) THE BATHROOMS HAVE BEEN FITTED WITH EVERY EXPEN SIVE ACCESSORIES. COSTLY MIRROR HAVING GEOMETRICAL DESIGNS HAVE BEEN FITTED WITH IL LUMINATING LIGHTS. DECORATIVE ACCESSORIES HAVE BEEN USED LAVISHLY. THE BATHROOMS HAVE BEEN PORTIONED WITH CLEAR GLASS CUBICLES FITTED WITH FROSTED-GLASS BATH AND SHOWER DOORS. THE WALL TILES AND FLOOR TILES ARE OF EXPENSIVE VARIETY. ITALIAN MARBLES HAVE BEEN EXT ENSIVELY USED. TEAKWOOD HAS ALSO BEEN EXTENSIVELY USED IN WOODEN FLOORINGS FURNITURE AND FIXTURES ARE OF THE HIGHEST QUALITY. 6. THE PHOTOGRAPHS OF THE H. NO. 346 SECTOR-9/D, CH ANDIGARH WHICH WERE TAKEN ON THE DATED OF SEARCH I.E., 24.07.2009, BY THE INVEST IGATION WING WHICH ARE 228 (TWO HUNDRED TWENTY EIGHT) ARE PART OF THIS ORDER AND EN CLOSED AS ANNEXURE A (IN TWO PARTS). 7. THE VIDEOGRAPHY OF THE H. NO. 546, SECTOR-9, CHA NDIGARH WAS DONE ON 24.07.2009 BY THE INVESTIGATION WING, CHANDIGARH AT THE TIME OF THE SEARCH. ACD CONTAINING THE VIDEOGRAPHY OF THE SAID HOUSE IS ENC LOSED AS ANNEXURE B 5.2 AN INVENTORY OF FURNITURE AND FIXTURES ADDRESSED IN PA RA 8 THE ASSESSMENT ORDER MADE BY THE INVESTIGATION WING CONFRON TED TO THE ASSESSEE IS ALSO REPRODUCED HEREUNDER : 8. DURING THE COURSE OF SEARCH OPERATION AN INVENTO RY OF FURNITURE AND FIXTURES WAS PREPARED WITH IS AS FOLLOWS:- MOTHERS ROOM (LOUNGE) SR. NO. NAME OF ARTICLE QUANTITY M AKE FLAT TV 52 1 SONY DVD 1 SONY FLAT TV 28(GUEST ROOM) 1 SAMSUNG DINING ROOM TV PLAZMA 38 1 SAMSUNG AC SPLIT 1 TONE 1 DAKI N MR. DHRUV TALWAR TV PLAZMA 46 (3 SERIES) 1 SAMSUNG PLAY STATION 1 SONY DVD 1 PHILIPS LCD 42 (LOUNGE) 1 SAMSUN G MR. VIKRAMS ROOM (SON) LCD 42 1 SAMSUNG DVD 1 PHILIPS MR. ANIL TALWARS ROOM TV PLAZMA 40 1 SAMSUNG LCD 38 1 SAMSUNG ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 7 OF 57 LCD 34 (GUEST ROOM) 1 LG MR. ANIL TALWARS OFFICE MONITOR 19 1 SAMSUNG CPU 1 INTEX (PENTIUM) PRINTER 1 HP LASER JET P-1007 PERSONNEL ZIM BENCH PRESS 1 MATRIX LEG EXTENSION 1 MATRIX JAGGAR 1 MATRIX TREAT MILL 1 MATRIX (MX-T5) LET PULL 1 MATRIX CHEST PRESS 1 MATRIX A C SPLIT 1 DAKIN MUSIC SYSTEM 1 POOL TABLE 1 5.3 ON THE BASIS OF THESE FACTS, THE ASSESSING OFFIC ER REQUIRED THE ASSESSEE TO EXPLAIN AND PROVIDE THE COMPLETE BREAKU P OF COST OF MATERIAL USED FOR CONSTRUCTING THE SPECIFIC HOUSE AND THE CO ST OF LABOUR PAYMENTS. SHOW CAUSE NOTICE DATED 14.12.2011 WAS ISSUED TO THE AS SESSEE TO EXPLAIN THE INVESTMENT. THE FACTS ARE REFERRED TO IN P ARA 10 OF THE ASSESSMENT ORDER AT UNNUMBERED PAGES 10 TO UNNUMBER ED PAGE 30 WHEREIN THE ASSESSING OFFICER SUMS UP THE SHOW CAUS E NOTICE AND THE RESPONSES OF THE ASSESSEE DURING THE SEARCH AND GIV EN IN THE COURSE OF THE PROCEEDINGS SETTING OUT THE REASONS WHY THEY WERE S TILL REQUIRED TO BE ADDRESSED. HE DREW ATTENTION OF THE ASSESSEE TO THE FA CT THAT IN THE COURSE OF THE SEARCH THE ASSESSEE WAS REQUIRED TO EXP LAIN THE INVESTMENT MADE IN THE CONSTRUCTION OF THE HOUSE WHEREIN THE FOLLOWING BREAKU P WAS GIVEN: F. Y. AMOUNT OF INVESTMENT 2004-05 RS. 47,80,000/- 2005-06 RS. 63,20,500/- 2006-07 RS. 60,32,750/- 2007-08 RS. 49,43,450/- 2008-09 RS. 3,15,675/- TOTAL RS. 2,23,92,375/- 5.4 CONSIDERING THE ABOVE, THE ASSESSING OFFICER CALCULATED THAT THE ASSESSEE CLAIMED THAT YEAR-WISE PERCENTAGE OF INVESTMENT WAS AS UNDER : F. Y. AMOUNT OF INVESTMENT PERCENTAGE OF INVESTM ENT MADE 2004-05 RS. 47,80,000/- 21% 2005-06 RS. 63,20,500/- 28% 2006-07 RS. 60,32,750/- 27% 2007-08 RS. 49,43,450/- 22% 2008-09 RS. 3,15,675/- 2% TOTAL RS. 2,23,92,375/- 100% ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 8 OF 57 5.5 A PERUSAL OF THE SHOW CAUSE NOTICE EXTRACTED IN THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE WAS PUT TO NOTICE OF TH E FACT THAT AS PER DETAILS FILED BY THE ASSESSEE, THE ASSESSEE HAD GOT THE SAID HOUSE CONSTRUCTED WITH THE HELP OF CONTRACTOR M/S SP CONSTRU CTION A PARTNERSHIP FIRM OF MR HARPAL SINGH CONSIDERED TO BE ASSESSEES CLOSE ASSOCIATE. CONSIDERING THE DETAILS FILED IT WAS NOTED TH AT THEY SUGGEST THAT M/S SP CONSTRUCTION USED TO RECEIVE CHEQUE FROM THE ASSESSEE AND PAYMENTS WERE MADE FOR PURCHASE OF CONSTRUCTION RELATE D ITEMS. THE BILLS WERE CLAIMED TO BE RETAINED AT THE SITE IN THE CUPBOARD. 5.6 STATEMENT OF SH. HARPAL SINGH RECORDED ON 29/11/2011 WAS REFERRED TO. FOR READY REFERENCE THE EXTRACT IS REP RODUCED FROM THE ASSESSMENT ORDER HEREUNDER : ' Q7 PLEASE EXPLAIN THE MANNER OF TRANSACTIONS AS WELL AS MODE OF TRANSACTIONS WITH SH. ANIL TALWAR, ANS. MODES OF TRANSACTIONS WAS BY WAY OF CHEQUE AND DIS BURSEMENT WAS BY MEANS OF CHEQUE OR CASH, DECIDED JOINTLY BETWEEN MR, ANIL TALWAR AN D ME BUT INVARIABLY ON DIRECTIONS OF SH. ANIL TALWAR AFTER RECONCILIATION OF DETAILS AT SITE. THE CHEQUE USED TO BE DEPOSITED IN OUR WORKING ACCOUNT. THE STATEMENT OF CHEQUES RECEI VED OVER THE PERIOD 2004 TO 2008 HAS BEEN SUBMITTED TO YOU. Q 8 PLEASE PRODUCE THE DETAILS OF PERSONS TO WHOM D ISBURSEMENT WERE MADE REGARDING CONSTRUCTION OF HOUSE NO. 346, SEC-9/D, CHANDIGARH ALONG WITH RELEVANT BILLS? ANS THE BILLS WERE RETAINED AT THE SITE IN THE CUPBOARD RN THE CUSTODY OF SH. ANIL TALWAR. THE DISBURSEMENT DETAILS MADE THROUGH ACCOUNT PAYEE CHEQUES CAN BE MADE OUT FROM ACCOUNT AND SHALL BE SUBMITTED SHORTLY. SINCE THE A CCOUNT WAS HELD AS AN IMPREST ACCOUNT, ONCE THE ACCOUNT, V.'AS RECONCILED WEEKLY OR FORTNIGHTLY WITH MR. ANIL TALWAR. NO FURTHER DETAIL WAS RETAINED BY ME. Q. 9 WHEN THE DETAILS WILL BE PROVIDED BY YOU A BOUT DISBURSEMENT OF CHEQUE?. ANS. I WILL SUBMIT THE DETAILS REGARDING DISBURSEMENT MADE THROUGH CHEQUES TRANSACTI ONS BY 06, 12.2011. Q. 11. I AM SHOWING YOU PAGE NUMBERING 1 TO 12 OF T HE DOCUMENT MARKED A-1 SEIZED FROM H. NO. 598, SECTOR~8, CHANDIGARH IN COURSE OF SEARCH OPERATION ON 24.07.2009. CAN YOU SPECIFY WHOM THESE DOCUMENTS BELONG TO AND NATURE OF TRANSACTION S ENTERED ON THESE PAGES? ANS. THE DOCUMENTS PAGE NO 1 TO 9 ARE NOT RELATED T O THE EXPENSES MADE THROUGH MY IMPREST ACCOUNT. THESE ARE PROBABLY EXPENSES MADE THROUGH M R. BEDI (COUSIN OF MR. TALWAR) BEFORE THE FINAL HANDING OVER OF THE HOUSE FOR THE WORK OF TILLING FROM GATE TO ROAD ON FROM & REAR SIDE AS WELL AS CERTAIN FABRICATION WORKS FO R GAS CAZE & GAMLA STAND ETC. PAGE 10,11 & 12 WERE PART OF THO FINAL ACCOUNTS PRE PARED AGAINST WHICH A FINAL AMOUNT OF RS 7 LACS WAS PAD ON 18.02.2008 TO THE OUTSTANDING PARTI ES AND THE SHEETS 10,11 & 12 WERE RETAINED BY MR. ANIL TALWAROR MR. BEDI AS THEY BOTH WERE SITTING THERE FOR SETTLING OF ACCOUNTS. IT IS INFORMED THAT THESE PAYMENTS OF RS 7 LACS WERE ALSO MADE ON DIRECTIONS OF MR. ANIL TALWAR. Q 12 ON PERUSAL OF PAGE 10,11 S 12 OF THE DOCUMENT A~1, IT IS OBSERVED THAT TRANSACTIONS ENTERED ON THESE PAGES IS FAR MORE THAN RS 7 LACS, WHAT YOU CLAIM THAT HAS BEEN DISBURSED FINALLY. PLEASE EXPLAIN? ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 9 OF 57 ANS. THESE DETAILS PROBABLY TOTAL AMOUNTS OF THE WO RKERS & SUPPLIERS FOR A PERIOD WHICH WAS NOT SETTLED, OUT OF WHICH AMOUNTS PAID ALREADY HAD TO BE DEDUCTED BY SH. ANIL TALWAR FROM HIS RECORD AND THE BALANCE AMOUNT OF RS 7 LACS WAS GIVE N TO ME FOR DISBURSEMENT AS PER HIS DIRECTIONS. THE DETAILS OF THE PAYMENTS MADE TO THE SE PARTIES PRIOR TO THIS ARE NOT AVAILABLE WITH ME. Q 13 PLEASE RECONCILE THE ACCOUNTS OF (HE PARTIES MENTIONED ON THE PAGE 10,11 & 12 OF DOCUMENT A-1? ANS . SINCE ALL THE RECORDS WERE RETAINED BY MR. TA /WAR, / AM NOT IN POSITION EITHER TO RECONCILE OR RECONSTRUCT THE TRANSACTIONS.' 5.7 THE STATEMENT OF SH. HARPAL SINGH WAS ALSO RECORDED ON 08.12,2011 , THE RELEVANT EXTRACT IS AS FOLLOWS:- 'Q. 2 PLEASE STATE THE NAMES OF OTHER AGENCIES, C ONTRACTORS, PERSONS INVOLVED IN THE CONSTRUCTION WORK? ANS. THE CONSTRUCTION WORK WAS DONE ON DAILY WAG E BASIS. AS FAR AS I REMEMBER, THERE WAS NO OTHER CONTRACTOR. Q. 3 WHAT WAS THE TOTAL AREA OF LAND ON WHICH CON STRUCTION WAS MADE. ALSO STATE THE COVERED AREA OF CONSTRUCTION? ANS. THE PLOT SIZE WAS TOLD TO BE SIX CANALS. T HE COVERED AREA WAS ABOUT 21500 SQ. FEET. Q. 4 PLEASE STATE THE NUMBER OF FLOORS AND ROOMS ETC. CONSTRUCTED IN THE SAID BUILDING? ANS. THE HOUSE CONSISTS OF ONE BASEMENT, TWO AND HALF STOREY AND ONE SERVANT AREA. IT HAS 26 ROOMS, TWO KITCHENS ON THE GROUND, FIRST AND SECOND FLOOR. THE BASEMENT MAY BE CONSIDERED AS ONE UNIT AND SERVANT UNIT CAN ALSO BE CONSIDERED AS ANOTHER UNIT. BUT ALL THESE ARE COVERED IN THE AREA OF 21500 SQ. FEET ALREADY STATED ABOVE. THERE IS ONE SWIMMING POOL AND A BILLIARDS ROOM. Q. 10 PLEASE FURNISH THE DETAILS OF PAYMENTS MADE BY YOU FOR CONSTRUCTION OF THE HOUSE INCLUDING FURNITURE AND FIXTURES INSTALLED IN THE HOUSE? ANS. AS ALREADY STATED I WAS ONLY THE IMPREST ACCOUNT HO LDER FOR SH. ANIL TALWAR OUT OF PERSONAL ASSOCIATION. THE DETAILED ACCOUNT WAS TAKEN BY HIM AT REGULAR INTERVALS AFTER SQUARING UP EVERY INSTALLMENT OF THE IMPREST ACCOUNT. AS SUCH T HESE DETAILS ARE NOT LYING WITH ME. THEY CAN BE HAD FROM SH. ANIL TALWAR. Q. 11 IN REPLY TO QUESTION NO. 9 OF YOUR STATEMEN T RECORDED ON 29.11.2011, YOU HAVE STATED THAT THE DETAILS REGARDING DISBURSEMENT MADE THROUGH CHEQUES WILL BE SUBMITTED TO THIS OFFICE BY 06.12.2011. PLEASE FURNISH THE DETAILS? ANS. SINCE DETAILS HAVE TO BE PREPARED ONLY ON THE BASIS OF MY BANK ACCOUNT STATEMENT AND CHEQUE BOOK. I AM PERSONALLY SCRUTINIZING THE DETAILS AND PREPARING THE DETAILED STATEMENT WHICH SHALL BE SUBMITTED IN 2-3 DAYS TIME. THE DELAY IN THIS IS SINCERELY REGRETTED. Q. 12 WHO DID THE JOB OF LANDSCAPING AND CONSTRUC TION OF BOUNDARY WAILS? ANS. THE BOUNDARY WALL WAS CONSTRUCTED BY DAILY WAGE LAB OUR AND PAID FOR FROM THE IMPREST ACCOUNT. THE LANDSCAPING WAS DONE BY THE OWN ARRANG EMENT OF MR. ANIL TALWAR. APART FROM THIS, SOME WORK WAS DONE BY MR. HITESH BEDI AS I HAVE STATED IN RESPONSE TO QUESTION NO. 11 OF MY STATEMENT RECORDED ON 29-11-2011. Q.15 PLEASE STATE THE TOTAL NUMBER OF LABOURS EMP LOYED AND MAN DAYS INVOLVED IN CONSTRUCTION OF HOUR? ANS. ALL THE DETAILS ARE WITH MR. ANIL TALWAR. NO DETAILS OF PAYMENTS MADE TO LABOUR & NUMBER OF LABOURS EMPLOYED ARE AVAILABLE WITH ME. Q.16 PLEASE STATE THE QUANTITY OF BRICKS, CEMENT, STEEL, AND OTHER CONSTRUCTION MATERIALS USED FOR THE CONSTRUCTION OF HOUSE? ANS. THE DETAILS ARE NOT WITH ME. I CAN NOT FUR NISH THE DETAILS. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 10 OF 57 Q.18 YOU HAVE HANDLED THE CONSTRUCTION WORKOFH.NO. 346, SEC-9, CHD. AS YOU HAVE STATED EARLIER THE TOTAL COVERED IS 21500 SQ FEET. PLEASE PROVIDE THE BREAK UP OF COT OF CONSTRUCTION MATERIAL USED OF LABOUR PAYMENTS? ANS. THESE DETAILS ARE WITH SH. ANIL TALWAR AS ST ATED EARLIER. IT MAY PLEASE BE NOTED THAT I HAVE HANDLED THE IMPREST ACCOUNT FOR THE CONSTRUCTION AS HAVE GUIDED MR. ANIL TALWAR FOR CONSTRUCTION.' THE PHOTOCOPIES OF THE STATEMENT GIVEN BY SH. HARPA L SINGH ARE ENCLOSED FOR YOUR REFERENCE. 5.8 ON A PERUSAL OF THE ABOVE THE AO CONCLUDED AS U NDER: THE ABOVE STATEMENT GIVEN BY SH. HARPAL SINGH SUGGE STS THAT THE BREAKUP OF 2,23,92,375/- IS ONLY 'IMPREST ACCOUNT' AND THERE HAVE BEEN SEPARATE PAYMENTS NOT FILED HERE AS REGARDS TO LABOUR, FITTINGS AND FIXTURES, LANDSCAPING, INSTALLATION OF LIFT, PROVISION OF SWIMMING POOL, WOOD WORK, GLASS WORK ETC. WHERE DETAILS ARE YET TO BE FURNISHED. CO PIES OF THE STATEMENTS OF SH. HARPAL SINGH ARE ENCLOSED. THE MAIN FACTS WHICH EMERGES FROM THE STA TEMENT OF SH. HARPAT SINGH ARE AS FOLLOWS - I) ALL THE BILLS AND VOUCHERS RELATING TO C ONSTRUCTION OF H. NO. 346, SECTOR - 9, CHANDIGARH ARE WITH SH. ANIL TALWAR II) THE CONSTRUCTION OF THE HOUSE TOOK PLAC E BETWEEN 01.04.2004 TO FEBRUARY 2008. III) PLOT SIZE WAS 6 KANAL AND TOTAL COVERE D AREA WAS 21500 SQ. FEET. IV) HOUSE CONSISTS OF 3 % STOREY INCLUDING ONE B ASEMENT. IT HAS 26 ROOMS, TWO KITCHENS, ONE SWIMMING POOL, ONE BILLIARDS ROOM, ONE SERVANT UNIT ETC V) THE OLD CONSTRUCTION ON THE PLOT WAS DEM OLISHED AND NEW STRUCTURE WAS GOT CONSTRUCTED. VI) THE BOUNDARY WALL WAS GOT CONSTRUCTED BY LABOURS ON DAILY WAGE BASIS. THE STRONG CORROBORATIVE EVIDENCES OF HUGE INVESTME NT MADE IN THE HOUSE IN SOME OF THE BILLS WERE FOUND AND SEIZED FROM THE RESIDENCE OF S H. HITESH BEDI, COUSIN OF SH. ANIL TALWAR. PAGES 1- 12 OF ANNEXURE'A-1' SEIZED FROM THE RESIDENCE OF SH . HITESH BEDI FOUND IN THE FORM OF SLIP, EXPENSES BILLS, LEDGERS ETC. CLEARLY ESTABLISH THAT INVESTMENT FOR CONSTRUCTION OF HOUSE WERE DONE IN CASH. THE STATEMENT SH. HITESH BEDI WAS RECORDED U/S 132( 4) IN COURSE OF THE SEARCH PROCEEDINGS. THE RELEVANT EXTRACTS OF HIS STATEMENT ARE PRODUCED BELOW:- Q.NO.15 DURING THE COURSE OF SEARCH OPERATION U/ S 132 OF THE I. T. ACT THE FOLLOWING INCRIMINATING DOCUMENTS ARE FOUND WHICH ARE GIVEN A S UNDER AS PER ANNEXURE A-L FROM PAGE NO. 1 & 19 SR. NO. PAGE NO. AMOUNT INVOLVED REMARKS 1 1 100910.25 PAYMENT MADE IN CASE PREMISES SANITARY AGRENY 2 5. 31381.97 PAYMENT MADE IN CASH SH. AKHILESH CONTRANCTOR 3. 10 15,93,690,00 CASH PAYMENT MADE SOME VARIOUS PARTY 3A 10 20,00,000.00 SOME ROUGH WORK IN PENCIL 4 11-12 28,28,987,00 CASH PAYMENT MADE SOME TO VARIOUS PARTY 5 13 25,000,00 ROUGH WORK 6 14 55000.00 CASH PAYMENT MADE TO ARVINDER ELECTRONIC PVT. LTD. 7 16 TO 19 1,08,000.00 1,08,000.00 1,08,000.00 57,000.00 CASH PAYMENT MADE TO JEE KAY VISION (P) LTD AUTHORIZE DEALER OF SAMSUNG PLEASE EXPLAIN YOUR POSITION IN RESPECT OF S. NO. 1 TO 7 ANS. WITH REFERENCE TO THE QUERIES AT S. NO. 1 I AM NOT IN A POSITION TO ANSWER THE SAME. HOWEVER MR. ANIL TALWAR CAN EXPLAIN BETTER IN THIS REGARD, AGAINST WHOM THE BILL HAS BEEN RAISED. IN REGARD TO S. NO. 2 AT PAGE 5 OF ANNEXURE A-L THE AMOUNT IS INVOLVED IN RELATE TO SOME CONTRACT WORK IN CONNECTION WITH CONSTRUCTION OF H.NO. 346 S EC- 9 CHANDIGARH AND THE CONTENTS OF THIS QUESTION CAN WELL EXPLAINED BY MR ANI! TALWAR. IN REGARD TO QUERIES AT S. NO. 3, I CAN NOT EXPLAIN THE EXACT POSITION WHETHER THIS IN CASH PAYMENT MADE TO VARIOUS PARTIES OR IT IS AN ESTIMATE. THE E XACT POSITION CAN BE EXPLAINED BY SH. ANIL TAIWAR ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 11 OF 57 IN REGARD TO QUERIES AT S. NO. 3A ALSO I CAN NOT EX PLAIN THE EXACT POSITION AND EXACT POSITION CAN BE EXPLAINED BY ANIL TALWAR AS IT PERTAINS TO THE C ONSTRUCTION OF RESIDENTIAL BUILDING NO. 346 SEC- 9 CHANDIGARH MY ANSWER IS THE SAME AS ABOVE IN REGARD AS THE QUE RIES AT S. NO. 4, THIS PAYMENT MIGHT HAVE BEEN MADE IN RESPECT OF PURCHASE OF SOME ITEMS IN T HE CONSTRUCTION OF ABOVE RESIDENTIAL BUILDING. IT MAY BE VERIFIED FROM THE REGULAR BOOKS OF ACCOUNTS OF THE FIRM AS WELL AS PERSONAL BOOKS OF ACCOUNTS OF SH. ANIL TALWAR IN REGARD TO THE QUERIES AT S. NO. 6 THESE PAYMENT RELATES TO PURCHASE OF TWO FRIDGES FOR THE BUSINESS PURPOSES OF THE FIRM M/S TALWAR SON JEWELL ERS. THE BILL HAS BEEN RAISED IN MY NAME BECAUSE GENERALLY I CARRY OUT OUT DOOR DUTIES OF TH E FIRM. THE CASH PAYMENT AMOUNTING TO RS. 55,0007- (FIFTY FIVE THOUSAND) MAY B GOT VERIFIED F ROM THE BOOKS OF ACCOUNTS OF THE FIRM. IN REGARD TO QUERIES AT S. NO. 7, I AM UNABLE TO EX PLAIN ANYTHING IN THIS REGARD. 5.9 THE ASSESSING OFFICER THEREAFTER SCANNING THE SEIZED DOCUMENTS DESCRIBED AS FA - 1 PAGE NUMBER 1; FA1 PAGE NO. 2 F A 1 PAGE NO. 2 BACKSIDE; FA 1 PAGE NO. 3 FA 1 PAGE NO. 4 TO FA 1 PA GE NO. 12 AND FA 1 PAGE NO. 14,TO'FA 1 PAGE NO. 19 CONCLUDES AS UNDER : THE ABOVE REFERRED PAGES ALONE AMOUNT OF BILLS OF R S. 56,81,004/-. PLEASE NOTE THAT THESE BILLS ARE NOT EXHAUSTIBLE BUT ONLY INDICATE THE SOM E OF THE BILLS FOUND IN CONSTRUCTION OF THE HOUSE AND NOT REFLECTED IN THE CASH-FLOW STATEMENT SUBMITTED BY YOU. 5.10 HE FURTHER ON UNNUMBERED PAGE 37 OF HIS ORDER ALS O GOES ON TO NOTE THAT IN THE COURSE OF THE SEARCH PROCEEDINGS BIL LS IN RESPECT OF PURCHASES MADE BY THE ASSESSEE'S WIFE SMT. NEENA TA LVAR FROM THE SHOWROOM OF M/S FLOOR AND FURNISHINGS (I) PRIVATE LIMITED WERE FOUND AND SEIZED FROM THE ASSESSEE'S RESIDENCE. THESE BILLS C ONSISTING THE SEIZED DOCUMENTS HAVE ALSO BEEN SCANNED AND REPRODUCED FRO M UNNUMBERED PAGES 38 TO 40 OF THE ASSESSMENT ORDER DESCRIBED AS PARTY NUMBER C A - 1 PAGE NO. 60; PARTY NUMBER C A -1 PAGE NUMBER 62; PA RTY NUMBER C A - 1 PAGE NO. 63. THEREAFTER THE AO MAKES A REFERENCE AT PAGE 41 OF THE ASSESSMENT ORDER THAT ON TEST CHECK BASIS SUMMONS WER E ISSUED TO ONE OF THE ENTITY WITH WHOM TRANSACTIONS APPEARED IN THE S EIZED DOCUMENTS NAMELY M/S FLOOR AND FURNISHINGS (I) PRIVATE LIMITED AND NOTES THAT THE TOTAL BILLS RAISED IN THE NAME OF MRS NEENA TALWAR WERE OF RS. 6,14, 529/-. 5.11 THE ASSESSEE WAS ACCORDINGLY SHOW CAUSED TO EXPLAIN THE SAME. THE AO WAS OF THE VIEW THAT THE EXPENDITURE HAD NOT BEEN P ART OF THE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE. ACCORDINGLY IN THE ABSENCE OF ANY DETAILS MAINTAINED THE CASE WAS REFERRED TO THE V ALUATION CELL. FOR READY REFERENCE THE RELEVANT EXTRACT IS REPRODUCED FROM THE ASSESSMENT ORDER PAGE 41. COPY OF THE DOCUMENT IS AVAILABLE AT PAPER BOOK PAGE 41 ONWARDS. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 12 OF 57 THE CASE WAS REFERRED TO VALUATION CELL U/S 142(A) FOR DETERMINING THE INVESTMENT MADE TOWARDS CONSTRUCTION OF THE SAID HO USE. THE DVO HAS SUBMITTED HIS REPORT WITH THE FOLLOWING REMARKS - 'THE VALUATION REPORT HAS BEEN PREPARED FORM THE EX PENDITURE FLOW STATEMENT GIVEN BY THE ASSESSEE, WHICH IS REQUIRED TO BE VERI FIED AT YOUR END. IN CASE, ANY MAJOR VARIATION IS FOUND IN THE EXPENDITURE FLOW STATEMEN T AS GIVEN IN ANNEXURE-IV OF THE REPORT IN ANY PARTICULAR YEAR IN YOUR OFFICE OR INT IMATED SUBSEQUENTLY BY THE ASSESSEE, THIS VALUATION WORKED OUT BY THIS OFFICE IS LIABLE TO CHANGE. HENCE THE REPORT SHOULD BE REFERRED BACK TO THIS OFFICE FOR R ECALCULATING THE VALUATION AMOUNT, IF REQUIRED. THE ASSESSEE HAS FILED AN AFFIDAVIT DATED 21.01.201 1. IN WHICH HE CLAIMED IN PARA 3 & 4 AS UNDER: PARA (3) THAT OLD STRUCTURE ALREADY EXISTING AT THE SITE HAVING COVERED AREA OF ABOUT 2000 SQ. FEET (198.90 SQ. METER) WAS PARTLY UTILIZE D IN THE NEW CONSTRUCTION AND PARTLY WAS DEMOLISHED. THE SCRAP VALUE SO OBTAINED WAS ALS O UTILIZED TOWARDS THE CONSTRUCTION OF THE NEW HOUSE. PARA (4) THAT THE BOUNDARY WALL AND GATE ALREADY EX ISTED AT THE SITE AT THE TIME OF ITS PURCHASE FORM THE SELLER OF THE SAID PROPERTY. THE SAME WAS GOT REPAIRED WHERE EVER REQUIRED. ONLY NEW STRUCTURE CONSTRUCTED BY ASSESSES HAS BEEN VALUED. RELIEF ON ACCOUNT OF SALVAGE VALUE OF EXISTING STRUCTURE BE ACCOUNTED FO R AT YOUR END PLEASE.' 5.12 HOWEVER THE VALUATION REPORT WAS DISCARDED BY THE ASSESSING OFFICER ON THE FOLLOWING REASONS: THE VALUATION OF THE SAID HOUSE WA.3 THEREFORE, DON E BY DISTRICT VALUATION OFFICER, CHANDIGARH ON THE BASIS OF EXPENDITURE FLOW STATEME NT AND AFFIDAVITS FILED BY YOU. THERE WAS NO INDEPENDENT TECHNICAL INPUT FROM THE V ALUATION CELL. HENCE THE VALUATION CELL. HENCE THE VALUATION MADE BY THE DVO , CHANDIGARH IS NOT RELIABLE AND HAS 10 RELEVANCE. IN COURSE OF ASSESSMENT PROCEEDINGS YOU WERE ASKED VIDE THE QUESTIONNAIRE DATED 16.09.2011, ORDER SHEET NOTING 21.-I1.2011 AN D THE LETTER DATED 09.12.2011 TO PROVIDE THE COMPLETE BREAK-UP OF COST OF MATERIA LS USED FOR CONSTRUCTION AND FURNISHINGS OF THE SAID HOUSE ALONG WITH DETAILS OF LABOUR PAYMENTS. BUT NO SUCH DETAILS WAS PROVIDED BY YOU GIVING SUFFICIENT OPPORTUNITIES. 5.13 THE AO ACCORDINGLY ISSUED A FINAL OPPORTUNITY TO THE ASSESSEE TO OFFER ITS EXPLANATION HOLDING AS UNDER: NOW, A FINAL OPPORTUNITY IS HEREBY ACCORDED TO YOU TO FURNISH THE FOLLOWING INFORMATION - I) TO FILE COMPLETE BREAK UP OF ALL THE MATERIAL USED FOR CONSTRUCT/ON OF HOUSE (BOTH QUANTITY WISE AND COST WISE) I.E. BRICKS, CEMENT, S TEEL, STONE, MARBLES, TILES AND WOODS. II) BUILDING DESIGN AND APPROVED PLAN / MAP OF THE CONSTRUCTED HOUSE. THE APPROVED PLAN SUBMITTED TO THE ESTATE OFFICE, CHANDIGARH AND DULY APPROVED BY THEM III) NAME AND ADDRESS OF THE ARCHITECT ALONG WITH T HE PAYMENTS MADE TO HIM DULY SUPPORTED WITH DOCUMENTARY BILLS / VOUCHERS- ALSO F URNISH PROOF OF TDS DEDUCTED. IV) NAMES AND COMPLETE ADDRESSES OF THE LABOUR CONT RACTORS, PAYMENTS MADE TO THEM ALONG WITH BILLS / VOUCHERS. ALSO FURNISH PROOF OF TDS DEDUCTED. V) COST OF FURNITURE / FIXTURES I.E. CURTAINS, SOFA S, PAINTINGS, DESIGNER FURNITURE IN DRAWING ROOMS, BED ROOMS, REST ROOMS, BALCONIES ETC . INSTALLED AT THE HOUSE ALONG WITH SUPPORTING BILLS AND VOUCHERS. VI) NAME AND COMPLETE ADDRESS OF THE PLUMBER CONTRA CTOR ALONG WITH THE PAYMENTS MADE TO HIM DULY SUPPORTED WITH DOCUMENTARY BILLS / VOUCHERS ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 13 OF 57 VII) NAME AND COMPLETE ADDRESS OF THE INTERIOR DECO RATOR AND DESIGNER ALONG WITH THE PAYMENTS MADE TO HIM DULY SUPPORTED WITH DOCUME NTARY BILLS /VOUCHERS VIII) COST OF ELECTRICAL FITTINGS INSTALLED IN THE HOUSE ALONG WITH BILLS AND VOUCHERS IX) COST OF CONSTRUCTION INVOLVED IN SWIMMING POOL ALONG WITH THE DETAILS OF THE PERSONS HIRED FOR DESIGNING AND CONSTRUCTION OF SWIMMING PO OL, X) COST OF LANDSCAPING AND CONSTRUCTION OF OUTER AREA ALONG WITH BILLS AND VOUCHERS XI) MATERIALS USED IN MODULAR KITCHEN FITTINGS, BAT HROOMS, SWIMMING POOL ETC. XII) POWER LOAD WHICH HAS BEEN SANCTIONED FROM THE ELECTRICITY DEPARTMENT ALONG WITH SECURITY DEPOSIT AND INSTALLATION FEES. IF THERE IS ANY POWER BACK UP LIKE GENERATOR SET. IF YES, ITS CAPACITY AND COST. XIII) COST OF CENTRAL AIR CONDITIONING SYSTEM. IF NO DETAILS ALONG WITH SUPPORTING DOCUMENTS ARE F ILED, I WILL BE CONSTRAINED TO ASSESS THE COST OF CONSTRUCTION AND COST OF FURNISHING ON THE BEST JUDGMENT BASIS (TIEJD IN THE CASE OF DR. S, SURENDRANAFH REDDY VS ACIT (2000) 72 /TO 205 (HYD) AND THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CST VS KM. ESUFALI H.M. ADOULALI [1973] 90 ITR 271 TO ESTABLISH THAT ESTIMATION IS W ARRANTED AS PART OF ASSESSMENT IN APPROPRIATE CASES) AS PER THE PREVALENT MARKET COST OF SUCH TYPES OF CONSTRUCTION AND BASED ON THE UNACCOUNTED DOCUMENTS FOUND DURING THE SEARCH. IT MAY BE NOTED THAT THE COST STATEMENT GIVEN BY YOU IS HIGHLY INADEQUATE AND WOU LD NOT EVEN COVER THE COST OF BASIC RAW STRUCTURE. BEFORE ANY DECISION ON THIS ISSUE IS TAK EN IN FAIR, EQUITABLE AND REASONABLE MANNER, PLEASE PROVIDE THE DETAILS AS CALLED FOR.' 5.14 A FURTHER PERUSAL OF PAGE 43 PARA 11 OF THE ASSESSMENT ORDER TAKES NOTE OF THE FACT THAT INITIALLY THERE WAS NO RESPON SE TO THE NOTICE DATED 14/12/2011 AS A RESULT OF WHICH A FINAL SHOW CAUSE NOTICE WAS ISSUED ON 22/12/2011 WHICH WAS REPLIED TO ON 26/12/2011 BY THE A SSESSEE. THE REPLY OF THE ASSESSEE WAS FOUND TO BE UNACCEPTABLE BY THE AO ON ACCOUNT OF THE FOLLOWING REASONS AS SET OUT IN PARA 11 OF U NNUMBERED PAGE 43 OF THE ASSESSMENT ORDER. SINCE THE SPECIFIC FINDING H AS BEEN ASSAILED BEFORE THE CIT-A AND IS HEAVILY RELIED UPON BY THE REVENUE IN THESE APPEALS IT IS DEEMED AND NECESSARY TO REPRODUCE THE SAME HEREUNDE R FOR READY REFERENCE THE_REPLY OF THE ASSESSEE_HAS BEEN PERUSED AND FOUN D TO.BE UNACCEPTABLE ON THE FOLLOWING GROUNDS:- C) THE ASSESSEE DID NOT FILE ANY DETAILS REGARDING COS T OF MATERIALS USED, COST OF FURNITURE AND FIXTURES, PAYMENTS TO LABOUR CONTRACT OR, ARCHITECTURE, INTERIOR DESIGNER, COST OF ELECTRICAL FITTINGS, POWER BACK UP ETC AS S OUGHT IN THE REPLY BUT ASSESSEE HAD TRIED TO AVOID FILLING THE DETAILS ON ONE PRETE XT OR ANOTHER. EVEN IN THE FINAL REPLY IT WAS STATED BY THE ASSESSEE THAT NO BILLS VOUCHER S OF MATERIALS PURCHASED, LABOUR' PAYMENTS ETC. WERE PRESERVED BY THE ASSESSEE. B) IN ITS REPLY THE ASSESSEE HAS CONTENDED THAT THE HOUSE DOES NOT HAVE 24 ROOMS BUT HAS ONLY 9 BED ROOMS. IN HIS REPLY THE ASSESSEE HAS SIMPLY STATED THAT THERE ARE 9 BED ROOMS, NO MENTION HAS BEEN MADE BY THE AS SESSEE REGARDING TOTAL NUMBER OF ROOMS. WHEREAS THE CONTRACTOR SH. HARPAL SINGH PARTNER OF M/S S. P. CONSTRUCTIONS HAS CATEGORICALLY ADMITTED THAT THERE ARE 24 ROOMS IN THIS HOUSE. MOREOVER, IT HAS BEEN OBSERVED WATCHING VIDEOGRAPHY THAT EVERY LIVING ROOM HAS THREE DISTINCT ATTACHMENT NAMELY DRAWING ROOM, DINI NG ROOM AND A KITCHEN FITTED WITH MODULAR FACILITIES AND LATEST CHIMNEY AND HENC E 9 BEDROOMS WOULD HAVE 24 ROOMS AS CONTENDED BY SH. HARPAL SINGH. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 14 OF 57 C) THE CONTENTION OF THE ASSESSEE THAT NO INVESTMENT H AS BEEN MADE OUTSIDE THE BOOKS OF ACCOUNTS IS TOTALLY WRONG. THE ASSESSEE HA S ONLY SHOWN AN AMOUNT OF RS. 2,23,92,375/- WHEREAS FROM THE EVIDENCE FOUND AT TH E RESIDENCE OF SH. HITESH BEDI AND STATEMENT OF SH. HARPAL SINGH CLEARLY SUGGESTS THAT THE ASSESSEE HAD UNDERSTATED THE VALUE OF INVESTMENT MADE IN THE HOU SE. D) THE ASSESSEE HAS CONTENDED THAT THE SERVICES OF M/S S. P. CONSTRUCTION WERE TAKEN ONLY TO CONTROL THE LEAKAGE OF FUNDS AND TO U TILIZE THEIR EXPERTISE IN THE CONSTRUCTION BUSINESS IS NOT ACCEPTED ON THE GROUND THAT SH. HARPAL SINGH HAS ADMITTED IN HIS STATEMENT THAT THE FUNDS WERE UTILIZED THROUGH AN 'IMPREST ACCOUNT WHICH WAS DIRECTLY CONTROLLED BY SH. ANIL TALWAR. IT WAS STATED BY SH, HARPAL SINGH IN HIS STATEMENT THAT HE HAD NO CONTROL OVER THE FUNDS BUT ONLY TO SUPERVISE THE CONSTRUCTION WORK. E) THE CONTENTION OF THE ASSESSEE THAT THE ENTIRE OLD FURNITURE AND FIXTURE WAS GOT RENOVATED / REPAIRED BY USING THE SCRAP MATERIAL LE FT OUT OF CONSTRUCTION IS NOT CORRECT. ALL THE OLD FURNITURE AND FIXTURES WERE LEFT AT H. NO. 149, SECTOR-8 CHANDIGARH WHERE THE ASSESSEE USED TO LIVE BEFORE SHIFTING TO H. NO. 346, SECTOR- 9, CHANDIGARH. F) WITH REGARD TO THE CONTENTION OF THE ASSESSEE REGAR DING THE VALUATION MADE BY THE DVO IT MAY BE MENTIONED THAT THE DVO HIMSELF HAS STATED TH AT 'THE VALUATION REPORT HAS BEEN PREPARED FORM THE EXPENDITURE FLOW STATEMENT GIVEN BY THE ASSESSEE, WHICH IS REQUIRED TO BE VERIFIED AT YOUR END. IN CASE, ANY MAJOR VARI ATION IS FOUND IN THE EXPENDITURE FLOW STATEMENT AS GIVEN IN ANNEXURE- IV OF THE REPORT IN ANY PARTICULAR YEAR IN YOUR OFFICE OR INTIMATED SUBSEQUENTLY BY THE ASSESSEE, VALUATION W ORKED OUT BY THIS OFFICE IS LIABLE TO CHANGE. HENCE THE REPORT SHOULD BE REFERRED BACK TO THIS OFFICE FOR RECALCULATING THE VALUATION AMOUNT, IF REQUIRED.' IN THESE CIRCUMSTAN CES, THE REPORT OF THE DVO CAN NOT BE RELIED UPON. G) THE LANDSCAPING HAS BEEN DONE BY FAMOUS LAND ARTIST MRS. GEETA SINGH OF CHANDIGARH. SHE IS AN EXCLUSIVE ARTIST EXPERT IN L ANDSCAPING AND CHARGES AROUND RS 25-30 LACS FOR MAKING SUCH BEAUTIFUL GREEN PARADISE OF TH AT MAGNITUDE. THE ASSESSEE FAILED TO FILE ANY DOCUMENTARY PROOF OF PAYMENTS HAVING BEEN MADE TO MRS. GEETA SINGH ON THIS ACCOUNT. H) IN HIS REPLY THE ASSESSEE CONTENDED THAT THIS IS A SIMPLE HOUSE AND PHOTOGRAPHY AND VIDEOGRAPHY CANNOT JUSTIFY ANYTHING, AS THE PHOTOGR APHS TEND TO MAKE AN 'UGLY' ALSO AS 'BEAUTIFUL'. THIS IS ONLY TO DISTRACT OUR ATTENTION FROM THE AVAILABLE EVIDENCES. IN THIS REGARD, ANNEXURE A (PART -I & PART-LL) MAY PLEASE B E SEEN AND THE VOLUME OF UNDISCLOSED INVESTMENT CAN BE EASILY ASCERTAINED. I) THE HOUSE HAS BIOMATRIX CENTRAL LOCKING SYSTEM WHI CH CAN BE OPERATED BY TOUCH FINGER OF SH. ANIL TALWAR, HIS WIFE AND HIS TW.' SONS. EVEN S ERVANTS CANNOT OPERATE THIS. J) THE HOUSE HAS LIFT FACILITIES AND THE ASSESSEE HAS FAILED TO FILE ANY COST INCURRED IN THIS REGARD. K) THE GYMNASIUM FACILITIES LOADED WITH LATEST ART AND TECHNOLOGY CAN BE SEEN. IT IS FITTED WITH MATRIX TREADMILLS, CROSS TRAINER AND WHOLE GYM NASIUM HAS TEAKWOOD FLOORS BUT THE ASSESSEE HAS NOT PROVIDED ANY BREAK-UP OF SUCH EXPE NSES INCURRED. L) THIS HOUSE HAS JACUZZI AND ALL AROUND IS EXPENSIVE STONES AND THE ASSESSEE DID NOT PROVIDE ANY BREAK UP OF EXPENSES MADE IN THIS REGARD. M) THE ASSESSEE HAS SUBMITTED LAYOUT PLAN FOR THE HOUS E DULY APPROVED BY THE GOVERNMENT AUTHORITY. THE PERUSAL OF THE LAYOUT PLAN AND DRAWI NG PLAN CLEARLY ESTABLISH THAT THE OLD STRUCTURE WAS DEMOLISHED AND NEW STRUCTURE WAS CREA TED. HENCE THE PLEA OF THE ASSESSEE IS ALSO NOT ACCEPTABLE AND LIABLE TO BE REJECTED. N) BESIDES THIS, THE ASSESSEE FAILED TO PROVIDE DETAI LS OF INVESTMENT MADE IN THE HOUSE AS REGARDS TO ELECTRICAL FITTINGS, VARIOUS GLASS WINDO WS, BATHROOMS FITTINGS, EXPENSES INCURRED ON ACCOUNT OF CURTAINS, WALL DESIGN, CEILINGS, MODU LAR KITCHEN, SOFASETS, LAMPS, GLASS TILES, CEILING LIGHTS VARIOUS DESIGNERS' POTS ETC. THE ASS ESSEE ALSO FAILED TO PROVIDE THE EXPENDITURE INCURRED IN REGARD TO THE CONSTRUCTION OF THE SWIMMING POOL, PARTY ROOM, STEM AND SAUNA. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 15 OF 57 O) IN ITS REPLY THE ASSESSEE EXPLAINED THAT NEW FURNI TURE AND FIXTURE ARE NOTHING BUT RENOVATION OF OLD FURNITURE AND FIXTURE. THIS IS NO T TRUE. THE OLD FURNITURE AND FIXTURES WERE LEFT IN THE OLF 4 HOUSE AND ALL THE FURNITURE AND FIXTURES WERE BROU GHT NEW. THE ASSESSEE HAS SURRENDERED U/S 132{4) OF THE I.T. ACT 1961 A S UM OF RS 8,27.5731- FOR F.Y 2008-09 PERTAINING TO THE A.Y 2009-10 ON ACCOUNT OF INVESTM ENT IN FURNITURE AND FIXTURES. THIS IS HIGHLY INADEQUATE. THERE ARE MORE THAN 30 SOFA SETS , 30 CENTRE TABLES, 40 SIDE TABLES, 40-50 SIDE LAMPS, 20 CUPBOARDS ALL MADE OF TEAK WOOD AND HENCE UNDISCLOSED INVESTMENT OF MORE THAN ONE CRORE IS NOT RULED OUT. P) THE ASSESSEE VIDE HIS REPLY DATED 26.12.2011 ADMITT ED THAT THE PERCENTAGE OF THE INVESTMENT MADE IN THE F.Y 2004-05, 2005-06, 2006-07 AND 2007- 08 SHOULD BE TAKEN AS 21.65%, 28.63% , 27.32% AND 22-04 % RESPECTIVELY. IT HAS BE EN SUBMITTED THAT THE HOUSE UNDER REFERENCE WAS COMPLETED IN 4 YEARS AND CANNOT BE, C OMPARED WITH THE CURRENT COST OF CONSTRUCTION. THE PLEA OF THE ASSESSEE IS TOTALLY U NACCEPTABLE AND THEREFORE FOR CIVIL CONSTRUCTION, WE HAVE TAKEN RATE OF RS 1500/-SQ FEE T AND FOR FURNISHING WE H.-.VE TAKEN RATES OF RS 6,000/-- SQ FEET WHICH IN 'TODAY TIME TOTALLY DO UBLED UP. A HOUSE BUILT IN YEAR 2011 COSTS NOTHING LESS THAN RS 2500-3000 SQ FEET AND SIMILARL Y OTHER EXPENSES. THE DETAILED ASSESSMENT, THEREFORE, IS BASED ON THE MARKET RATES AS PREVAILED IN THE FYS 2005-06, 2006- 07 AND 2007-08. Q) THE ASSESSEE HAS SINCE NOT PRESERVED ANY BILL/VOUCH ERS OF THE MATERIAL PURCHASED ' TOWARDS THE CONSTRUCTION OF THE SAID HOUSE AND NEITHER HAS PRESERVED ANY RECORD OF THE LABOUR PAYMENTS, AS ADMITTED BY THE ASSESSEE, WE HAVE NO R OOM BUT TO ASSESS THE VALUE AT THE RATES WHICH PREVAILED IN YEARS OF CONSTRUCTION. R) THE SUBMISSION OF THE ASSESSEE THAT BOUNDARY WALL O F THE HOUSE WAS RENOVATED AND GOT REPAIRED WHEREVER REQUIRED IS TOTALLY FALSE, BASELE SS AND WITHOUT ANY DOCUMENTARY PROOF. THIS IS MORE SO EVIDENT FROM THE APPROVED PLAN MADE BY AADARSHILA SUBMITTED TO US, DEPICTING NEW STRUCTURES DEMOLISHING THE OLD ONE. T HE VALUATION MADE BY D.V.O. IS TOTALLY UNRELIABLE, AS HAS ALREADY BEEN DISCUSSED. S) AS FAR AS JUDGMENTS OF HON'BLE SUPREME COURT AND I TAT HYDERABAD ARE CONCERNED THE RATIO MAY NOT BE EXACTLY APPLICABLE BUT THEY AR E POINTING TO THE CONCLUSION ON EXISTING LAW RELATING TO 'THE BEST JUDGMENT. IN THIS REGARD * THE SCOPE OF BEST JUDGMENT ASSESSMENT UNDER THE INCOME TAX LAW CAME UP FOR CONSIDERATION BEFORE THE JUDICIAL COMMITTEE AS EARLY AS 1937 IN CIT VS LAXMINARAIN BADRIDAS (1937) 5 ITR 170 (PC). THEREIN LORD RUSSELL OF KILLOWEN , SPEAKING FOR TH E JUDICIAL COMMITTEE, OBSERVED: 'THE OFFICER IS TO MAKE AN ASSESSMENT TO THE BEST O F HIS JUDGMENT AGAINST A PERSON WHO IS IN DEFAULT AS REGARDS SUPPLYING INFORMATION. HE MUST NOT ACT DISHONESTLY OR VINDICTIVELY OR CAPRICIOUSLY BECAUSE HE MUST EXERCI SE JUDGMENT IN THE MATTER. HE MUST MAKE WHAT HE HONESTLY BELIEVES TO BE A FAIR ESTIMAT E OF THE PROPER FIGURE OF ASSESSMENT, AND FOR (HIS PURPOSE TIE MUST, THEIR LO RDSHIPS THINK, BE ABLE TO TAKE INTO CONSIDERATION LOCAL KNOWLEDGE AND REPUTE IN REGARD TO THE ASSESSEE'S CIRCUMSTANCES, AND HIS OWN KNOWLEDGE OF PREVIOUS RETURNS BY AND AS SESSMENTS OF THE ASSESSEE'S AND ALL OTHER MATTERS WHICH HE THINKS WILT ASSIST H IM IN ARRIVING AT A FAIR AND PROPER ESTIMATE; AND SENSE, TOO, THE ASSESSMENT MUST BE TO SOME EXTENT ARBITRARY.' IN RAGHUBAR MANDAL HARIHAR MANDAL VS. STATE OF 3IHA R (1957) 8 STC 770 (SC), A CASE ARISING UNDER THE BIHAR SALES TAX ACT, 1944, THE LAW RELATING TO 'BEST JUDGMENT' ASSESSMENT WAS EXAMINES AT LENGTH BY THIS COURT. THEREIN, S.K. DAS J., SPEAKING FOR THE COURT, OBSERVED: 'NO DOUBT IT IS TRUE THAT WHEN THE RETURNS AND THE BOOKS OF ACCOUNT ARE REJECTED, THE AO MUST MAKE AN ESTIMATE, AND TO THAT EXTENT HE MUS T MAKE A GUESS; BUT THE ESTIMATE MUST BE RELATED TO SOMA EVIDENCE OR MATERIAL AND IT MUST BE SOMETHING MORE THAN MERE SUSPICION. TO USE THE WORDS OF LORD RUSSELL OF KILLOWEN AGAIN, 'HE MUST MAKE WHAT HE HONESTLY BELIEVES TO BE A FAIR ESTIMAT E OF THE PROPER FIGURE OF ASSESSMENT AND FOR THIS PURPOSE HE MUST TAKE INTO C ONSIDERATION SUCH MATERIAL AS THE AO HAS BEFORE HIM, INCLUDING THE ASSESSEE'S CIRCUMS TANCES KNOWLEDGE OF ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 16 OF 57 PREVIOUS RETURNS AND ALL OTHER MATTERS WHICH THIS A O THINKS WILL ASSIST HIM IN ARRIVING AT A FAIR AND PROPER ESTIMATE.' HENCE, THE VALUATION ON THE BEST JUDGMENT HAS BEEN ARRIVED. THEREFORE, BASED ON THE FINDINGS OF THE SEARCH TEAM BASED ON THE PHOTOGRAPHS MADE AT THE TIME OF SEARCH, BASED ON THE VIDEOGRAPH Y, BASED ON VARIOUS ANNEXURE OF GOODS INVENTORIZED AT THE TIME OF SEARCH, BASED ON THE CORROBORATIVE EVIDENCES IN SOME OF THE BILLS/ /VOUCHERS FOUND AND SEIZED FROM THE RESI DENCE OF EMPLOYEE OF THE ASSESSE AND THE STATEMENT GIVEN BY THE PARTNER OF M/S. S, P. CONSTR UCTION MR. HARPAL SINGH AND SUBSEQUENT SHOW CAUSE NOTICE ISSUED AND INDEPENDENT MARKET REPORT OF SIMILAR KIND OF HOUSES, THE FOLLOWING ASSESSMENTS OF THE MENTIONED HOUSE ARE BEING WORKED OUT. ASSESSMENT OF H. NO. 346, SECTOR -9, CHANDIGARH (BASED ON THE MARKET RATE OF FINANCIAL YEARS, 2005 -06, 2006-07AND 2007-08) (6 KANAL COVERING CONSTRUCTED AREA 21500 SQ. FT. (A PPROX.)) S. NO DESCRIPTION OF WORK AREA IN SQ.TT RATE IN RS AMOUNT IN RS 1. CIVIL CONSTRUCTION (SEMI FINISHED) INCLUDING FOUNDA TION, 21500 1500 3,22,50,000/- BRICK WORK, RCC WORK, PLASTERING (INTERNAL&EXTERNAL ) EXTERNAL) ETC, ALSO INCLUDING PUBLIC HEALTH & SANITARY WORK, ELECTRICAL (INTERNAL & EXTERNAL) WORK ETC. 2 FINISHING WORK INCLUDING ITALIAN MARBLE FLOORING, W OODEN 21500 6000 12,90,00,000/- FLOORING, FALSE CEILING WITH DESIGN & COVE LIGHTS , P.O.P ON WALLS & TEAK WOOD FANCY JAIL FOR LIGHTS, TEXTURE PAINTS, P LASTIC PAINTS, POLISH WORK, TEAK WOODEN JOINERY (CHOWKETS, DOORS, WINDOWS ETC). .TILES/GRANI TES IN BATHROOMS AND KITCHEN, BATHROOM FITTING AND FIXTUR ES (FANCY), FANCY, CUPBOARDS, MODULAR KITCHEN, FAN CY DESIGNS ON WALLS AND COLUMNS ETC. 3 PROVIDING AND INSTALLING CENTRALLY AIR CONDITIONING SYSTEM INCLUDING DUCTING IN THE BUILDING/HOUSE. L.S* L.S * 1,00,00,000/- 4 PROVIDING AND INSTALLING G.D SET INCLUDING ELECTRIC PANEL AND ELECTRICAL CONNECTIONS / SWITCHES / WIRING ETC. L.S* L.S* 50,00,000/- 5 GYMNASIUM HALL INCLUDING INTERIOR AND EQUIPMENTS L.S* L.S* 25,00,000/- 6 SWIMMING POOL INCLUDING EQUIPMENT FOR CLEANING AND DISPOSAL OF WATER. L.S* L.S* 25,00,000/- 7 FURNITURE - THERE ARE ABOUT 30 SOFA SETS. THERE ARE ALSO 40 SIDE TABLES, 30 CENTRE TABLES, 10 DOUBLE BEDS, 20 CUPBOARDS ALL MADE OF TEAKWOOD ALONG WITH CARVINGS MADE THEREON. THERE ARE COSTLY LAMP SETS AND CHANDELIERS. 1,00,00,000/- 8 ELECTRONIC GADGETS {TVS, DVD PLAYERS AND MUSIC SYSTEMS, CAMERAS ETC.) 10,00.000/- 9 PAINTING AND MURALS, FANCY GLASS AND CRYSTAL GLASS COST ETC. THERE ARE MORE THAN 20 BIG PAINTING WORTH MORE THAN RS 5 LACS EACH AND 20 PAINTINGS FOR WORTH MORE THAN RS 50,000 /- EACH. MURALS MUST ALSO BE WORTH RS50,00,000/- 2,00,00.000/- 10. LANDSCAPING ON ENTIRE AREA OF 4 KANALS, PARKING AREA, MAIN GATES, GREEN PARADISE, GREENERIES, PLANTS ON THE RO OF TOP ETC. 35,00,000/- ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 17 OF 57 11. BILLIARDS ROOM WITH BILLIARD STICKS. 15,00,000/- 12' BIOMATRIX LOCK SYSTEM 25,00,000/- 13 LIFT 10,00,000/- 14 DISCOTHEQUE ALONG WITH LIGHTS, FLOORS ETC. 25,00,000/- T O T A L 22,32,50,000/- LS_SIGNIFIES_LUMP SUM IN VIEW OF THE ABOVE OBSERVATIONS, THE TOTAL INVEST MENT IN THE RESIDENTIAL HOUSE COMES TO RS.22,32,50,000/- OUT OF WHICH THE ASSESSE E HAS ALREADY ACCOUNTED FOR A SUM RS.2,23,92,375/- IN HIS RETURN OF INCOME. THEREFORE THE ASSESSES HAS MADE AN UNACCOUNTED INVESTMENT OF RS. 20,08,57,625/- (22,32 ,50,000-2,23,92,375) WHICH IS TREATED AS UNEXPLAINED INVESTMENT OF THE ASSESSES I N TERMS OF SECTION 69B OF THE INCOME TAX ACT, 1961 SINCE THE INVESTMENT IS NOT FU LLY DISCLOSED IN BOOKS OF ACCOUNTS OF THE ASSESSEE. FOR SAKE OF CONVENIENCE THE PROVISION S OF SECTION 69B ARE REPRODUCED BELOW:- 'WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUAB LE ARTICLE, AND THE ASSESSING OFFICER FINDS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVES TMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEED S THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AM OUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER , SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. ' AS THE ASSESSEE HAS MADE THE CONSTRUCTION FROM THE FY 2004-05 TO FY 2008-09. THE APPORTIONMENT OF THE UNDISCLOSED INVESTMENT MAD E IN THE RESIDENTIAL HOUSE IS CALCULATED AS UNDER:- F. Y. PERCENTAGE OF INVESTMENT AMOU NT OF UNDISCLOSED INVESTMENT MADE 2004-05 21% RS. 4,21,80,100/- 2005-05 28% RS. 5,62,40,133/- 2006-07 27% RS. 5,42,31,560/- 2007-08 22% RS. 4,41,88,680/- 2008-09 2% RS. 40,17,150/- TOTAL 100% RS. 20,08,57,623/- THEREFORE A SUM OF RS 4,21,80,1007 - IS ADDED BACK AS UNEXPLAINED INVESTMENT TOWARDS CONSTRUCTION AND FURNISHING OF H. NO. 346, SEC.9 , CHANDIGARH U/S 69B IN THE HANDS OF THE ASSESSEE FOR THE F.Y. 2004-05 PERTINEN T TO A.Y. 2005-06. I AM SATISFIED THAT THE ASSESSEE HAS NOT FULLY DISC LOSED INVESTMENT IN CONSTRUCTION OF HOUSE. I THEREFORE INITIATE PENALTY PROCEEDING AS PER PROVISIONS OF SECTION 271(1)(C) READ WITH EXPLANATION 5A BY ISSUE OF A NOTICE U/S 274. (ADDITION:- RS. 4,21,80,100/- INCOME DECLARED BY THE ASSESSEE RS. 47,25,447/- 6. THESE ADDITIONS WERE CHALLENGED IN APPEAL B EFORE THE CIT(A). THE LD.AR CARRYING US THROUGH THE SUBMISSIONS RECORDED IN THE IMPUGNED ORDER AND THE ARGUMENTS RECORDED IN THE SAID ORDER SUBMITTED THAT THEY WERE SELF EXPLICIT. ADDRESSING THE FACTS IT WAS HIS SUBMISSION THAT NO ADDITION WAS MAINTAINABLE. THE ADHOC RELIEF GRANTED BY THE CIT(A) INSTEAD OF DELETING THE ENTIRE ADDITION IT WAS SUBMITTED WA S CONTRARY TO SETTLED LEGAL JURISPRUDENCE. THE CIT(A) REMANDED THE SUBMISSIONS TO THE AO AND STILL MAINTAINED PART ADDITIONS CONTRARY TO LAW. BEFORE W E PROCEED TO ADDRESS THESE ARGUMENTS IT IS CONSIDERED TO NECESSARY FOR T HE SAKE OF COMPLETENESS ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 18 OF 57 TO REPRODUCE THE FACTS AS SUMMED UP BY THE CIT(A) B EFORE REMANDING THE SUBMISSIONS TO THE AO: 5.2. THE AO, AFTER REFUTING EACH OF THE ASSESS EE'S CONTENTION, SINCE NO DETAILS AS CALLED FOR, NOR ANY BILLS/VOUCHERS WERE FURNISH ED, PROCEEDED TO DETERMINE THE COST OF INVESTMENT IN THE HOUSE BASED ON THE MATERIALS ON RECORD. IT IS OBSERVED FROM THE IMPUGNED ORDER THAT THE COST OF C IVIL CONSTRUCTION WAS TAKEN @ RS. 1,500/- SQ FEET AND THE FURNISHING/ FINISHING WORK @ RS. 6.000/- SQ FEET CONSIDERING THE PREVAILING MARKET RATES IN F.Y. 200 5-06 TO 2007-08. THE RATE OF CONSTRUCTION IN THE YEAR 2011, IS STATED TO BE NOT LESS THAN RS. 2,500- 3,000 PER SQ FEET. SIMILARLY, THE POSITION IN RESPECT OF OTHE R EXPENSES, WERE ALMOST DOUBLED. IT IS FURTHER OBSERVED THAT FOR ESTIMATING THE COST OF CENTRALLY AIR- CONDITIONING SYSTEM; THE FITTINGS INCLUDING GD SETS ; THE GYMNASIUM; THE SWIMMING POOL; LANDSCAPING; BIOMETRIC SYSTEM; PAINT INGS AND MURALS; LIFTS; DISCOTHEQUE ETC., THE COST HAS BEEN TAKEN ON LUMP S UM BASIS. RELIANCE FOR ASSESSING THE COST OF CONSTRUCTION AND COST OF FURN ISHING ON BEST JUDGEMENT BASIS WERE DRAWN FROM DR. S. SURENDRANATH REDDY VS. AC1T (2000) 72 1TD 205 (HYD); THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF CST VS H.M. ESUFALI H.M. ADDULALI[1973] 90 1TR 271, CIT VS, LAX MINARAIN BADRID;IS (1937) 5 ITR 170 (PC) AND RAGHUBAR MANDAL HARIHAR MANDA! VS. STATE OF BIHAR (1957) 8 STC 770(SC). CONSEQUENTLY THE TOTAL INVESTMENT IN THE HOUSE WAS WORKED OUT TO RS. 22,32,50,000/- AS AGAINST THE SUM OF RS. 2,23,92,37S/-DECLARED BY THE ASSESSEE. THE UNACCOUNTED INVESTMENT OF RS. 20, 08,57,625/-, AFTER DEDUCTING THE COST DECLARED BY THE ASSESSEE, WAS AD DED U/S 69B, WHICH WAS APPORTIONED YEAR-WISE AS UNDER: F.Y. PERCENTAGE OF INVESTMENT AMOUNT OF UNDISCLOSED INVESTMENT MADE 2004-05 21% RS.4,21,80,100/- 2005-06 28% RS.5,62,40,133/- 2006-07 27% RS.5,42,31,560/- 2007-08 22% RS.4,41,88,680/- 2008-09 2% RS.40.17.150/- TOTAL 100% RS.20,08,57,623/- 5.2.1 FOR SAKE OF CLARITY AND READY REFERENCE, T HE DECLARATION BY THE ASSESSEE OF TOTAL COST OF CONSTRUCTION OF THIS HOUSE AT RS.2,23 ,92,375/- IS AS UNDER:- A.Y. AMOUNT OF INVESTMENT (RS.) 2005-06 47,80,000/- 2006-07 63,20,500/- 2007-08 60,32,750/- 2008-09 49,43,450/- 2009-10 3,15,675/- TOTAL 2,23,92,375/- 5.2.2 THE ESTIMATION BY THE DVO AT RS. 2,41,42,000/ - SPREAD OVER FIVE YEARS IS AS UNDER:- A.Y. AMOUNT OF INVESTMENT (RS.) 2005-06 52,27,174/- 2006-07 69,11,790/- ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 19 OF 57 2007-08 65,97,121/- 2008-09 54,05,915/- 2009-10 TOTAL 2,41,42,000/- 6.1 IT WAS SUBMITTED THAT THE SUBMISSIONS ADVANCED B EFORE THE CIT-A WERE REMANDED TO THE ASSESSING OFFICER AS WOULD BE EVIDEN T FROM PARA 5.4 OF THE IMPUGNED ORDER. THE REMAND REPORT OF THE AO IT WA S SUBMITTED HAS ALSO BEEN EXTRACTED IN THE ORDER FROM PAGES 17 TO 25 AND IT WAS ALSO CONFRONTED TO THE ASSESSEE. THE REJOINDER THERETO IT WA S SUBMITTED HAS BEEN FILED AND HAS ALSO BEEN EXTRACTED IN PARA 5.5 OF THE IMPUGNED ORDER FROM PAGES 26 TO 39. CONSIDERING THE SAME THE CIT(A) COME TO THE FOLLOWING CONCLUSION IN PARA 5.6 TO 5.15 AT PAGES 40 TO 53 W HICH IS CHALLENGED BY THE ASSESSEE IN THE PRESENT PROCEEDINGS . A PERUSAL OF THE SAME SHOWS THAT THE CIT(A) IN PARA 5.6 OF HIS ORDER ADDRE SSES THE ISSUES IN THE FOLLOWING MANNER. 5.6 1 HAVE CAREFULLY CONSIDERED THE IMPUGNED ORDER AND THE SUBMISSIONS OF THE ASSESSEE AS WELL AS THE REMAND R EPORT AND THE REJOINDER. 1 HAVE ALSO SEEN THE VIDEO ATTACHED AS ANNEXURE TO TH E IMPUGNED ORDER AND THE STILL PHOTOGRAPHS IN TWO VOLURNNS. 1 ALSO FIND THAT SOME PHOTOGRAPHS HAVE ALSO BEEN SCANNED AND PLACED IN THE BODY OF THE ORDER. THE HO USE IS SPREAD OVER AN AREA OF 3067 SQ. YARDS (6 KANALS) AND IS A 3/1/2 STORIED HO USE HAVING COVERED AREA OF 21500 SQ.FT. THE ASSESSEE HAS 100% OWNERSHIP. AS PE R THE FACTS EMERGING FROM THE IMPUGNED ORDER THE ASSESSEE HAS NOT MAINTAINED ANY ACCOUNTS NOR THE DETAILS OF THE EXPENDITURE INCURRED ITEM-WISE. THE ASSESSEE HAS SUBMITTED THE TOTAL AMOUNT OF THE EXPENDITURE OF RS.2,23,92,3 75/- AS INCURRED ON THE HOUSE ON THE BASIS OF THE WITHDRAWALS FROM HIS BANK ACCOUNTS. IN THE ABSENCE OF ANY DETAILS, THE MATTER WAS REFERRED BY THE AO TO THE DISTRICT VALUATION OFFICER WHO HAS ESTIMATED THE TOTAL COST AT RS.2,41,42,000/- AS PER THE DETAILS GIVEN IN THE VALUATION REPORT. THE AO, HOWEVER, BEING NOT SATISFIED WITH THE VALUATION REPORT MADE HIS OWN ES TIMATE WITH RESPECT TO THE COST OF CONSTRUCTION AND MAJOR ITEMS AS REGARDS THE HOUSE ON GROSS BASIS AS ELUCIDATED IN THE IMPUGNED ORDER. 5.7 THE ASSESSEES CONTENTION IS THAT THE ESTIMATE MADE BY THE AO IGNORING THE VALUATION REPORT IS NOT JUSTIFIED AND FURTHER THERE IS NO BASIS FOR THE GROSS RATE APPLIED BY THE AO IN RESPECT OF EACH OF THE ITEMS. THE ASSESSEE HAS FURTHER CONTENDED THAT THERE IS NO REASON FOR D RAWING ANY ADVERSE INFERENCE FOR NOT MAINTAINING BOOKS OF ACCOUNT AS U NDER THE LAW HE IS NOT REQUIRED TO DO SO AS THE HOUSE IS ASSESSEES PERSON AL PROPERT. 5.8. ON THE ISSUE WHETHER THE ASSESSEE IS REQUIRED TO MAINTAIN BOOKS OF ACCOUNT, 1 AM IN AGREEMENT WITH THE LEGAL CONTENTIO N OF THE ASSESSEE THAT THE BOOKS OF ACCOUNTS ARE REQUIRED TO BE MAINTAINED UND ER SECTION 44A ONLY IN RESPECT OF THE BUSINESS OR PROFESSION CARRIED ON BY THE ASSESSEE AND NO BOOKS OF ACCOUNTS ARE REQUIRED TO BE MAINTAINED WHILE INC URRING EXPENDITURE INCLUDING EXPENDITURE ON THE CONSTRUCTION OF OWN HO USE, FOR WHICH NO DEDUCTION IS BEING CLAIMED UNDER THE INCOME TAX ACT . HOWEVER, THE ASSESSEE WAS SUBJECT TO SEARCH ACTION IN WHICH HIS RESIDENTI AL PREMISES WAS ALSO ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 20 OF 57 COVERED, IN THE COURSE OF WHICH THE INVESTIGATION W ING TOOK A VIDEOGRAPHY OF THE HOUSE, BOTH INTERIOR AND EXTERIOR, APART FROM SOME STILL PHOTOGRAPHS. CONSEQUENTLY NOTICE FOR FILING THE RETURNS OF INCOM E FOR THE YEARS UNDER CONSIDERATION UNDER THE PROVISIONS OF SECTION 15 3 A WAS INITIATED SO THAT ASSESSMENT OF THE CORRECT INCOME OF THE ASSESSEE CO ULD BE DETERMINED. THUS, THE FACT REMAINS THAT IN THE ABSENCE OF ANY ACCOUNT S/ DETAILS OFEXPENS.ES INCURRED, THE ASSESSEE WILL STILL BE REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT INCLUDING THE EXPENDITURE INCURRED IN THE CONSTRUCT ION OF THE HOUSE. IN OTHER WORDS, IT BECOMES THE ONUS OF THE ASSESSEE TO FURNISH THE PRIMARY FACTS WHEN CALLED UPON BY THE AO BY ISSUANCE OF STATUTORY NOTICES AND SHOW CAUSES. IT NATURALLY FOLLOWS THAT THE FACTUAL AND L EGAL INFERENCES CAN ONLY BE DRAWN FROM SUCH PRIMARY FACTS, IN THIS CASE THE A SSESSEE HAS PLEADED THAT HE HAS INCURRED A PARTICULAR AMOUNT OF EXPENDITURE AS COVERING EACH AND EVERY EXPENDITURE INCURRED ON THE CONSTRUCTION OF T HE HOUSE. EITHER, HE HAS TO PROVE THAT ONLY RS. 2,08,57,623F- WAS INCURR ED OR ELSE COME CLEAN WITH THE INFORMATION TO WHICH ONLY HE IS PRIVY TO. THE E XPANSE OF THE HOUSE, THE VIDEOGRAPHY WHICH GIVES A GRAPHIC PICTURE, APART F ROM BILLS FOUND IN THE HOUSE OF HIS ASSOCIATE SHRI HITESH BEDI, WHOSE STATEMENT ALONG WITH THAT OF SHRI HARPAL SINGH, THE BILLS OF FURNISHINGS FROM M/S FLOOR AND FURNISHINGS, BELIES THE CLAIM OF THE ASSESSEE. IT IS ALSO OBSERVED THAT ASSESSEE IN THE REJOINDER WHILE TACKLING THE SPECIFIC ITEMS OF LUMP SUM ADDITIONS IN PARTICU LAR, CONTINUES TO REFRAIN FROM STATING THE ACTUAL COSTS. THUS NOTHING HAS BEEN F ORTHCOMING ON THE PART OF THE ASSESSEE IN PROVIDING ANY DETAILS RELATING TO T HE CONSTRUCTION OF THE HOUSE AS WELL AS THE OTHER ADDITIONS MADE BY THE AO . (EMPHASIS PROVIDED) 6.2 REFERRING TO THE ORDER IT WAS SUBMITTED THAT THE CIT-A UPHELD THE DECISION OF THE AO TO REFER THE MATTER TO THE VALUATION C ELL IN THE ABSENCE OF ACCOUNTS OR DETAILS OF EXPENDITURE WITH THE ASSESSEE. H E FURTHER NOTED THAT A S PER THE VALUATION REPORT DATED 1 ST DECEMBER, 2011 SUBMITTED BY THE DVO, AFTER CARRYING OUT AN INSPECTION OF THE PROPERTY ON 15.10.2011 AND 19.10.2011, VALUED THE COST OF CONST RUCTION AT RS.2,41,42,000/-, THE DETAILS OF WHICH AND THE BASI S THEREOF ARE GIVEN IN ANNEXURE II [ABSTRACT COST] OF THE VALUATI ON OF REPORT. HOLDING THE REPORT AS UNRELIABLE IT WAS SUBMITTED THE CIT(A ) ALSO CONCLUDED THAT ESTIMATE BY THE AO WAS NECESSITATED. THE FOLLOWING CONCLUSION OF THE CIT(A) WHICH IS CHALLENGED BY BOTH THE PAR TIES IS REPRODUCED HEREUNDER: 5.9.2 ON A PERUSAL OF THE REPORT NO. DVO/1T/CHD/20 11-12/119 DATED 01.12.2011, IT IS EVIDENT THAT (TO QUOTE), THE VALU ATION REPORT HAS BEEN PREPARED FROM THE EXPENDITURE FLOW STATEMENT GIVEN BY THE ASSESSEE, WHICH IS REQUIRED TO BE VERIFIED AT YOUR END,... THAT THE AS SESSEE HAS FILED AN AFFIDAVIT DATED 21.10.2011 IN WHICH HE CLAIMED IN PARAS 3 & 4 AS UN DER: PARA (3) THAT THE OLD STRUCTURE ALREADY EXISTING AT THE SITE HAVING COVERED AREA OF ABOUT 2000 SQ FT (198.90 SQ METER)WAS PARTLY UTILIZ ED IN THE NEW CONSTRUCTION AND PARTLY WAS DEMOLISHED. THE SCRAP SO OBTAINED WAS AL SO UTILIZED TOWARDS THE CONSTRUCTION OF THE NEW HOUSE. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 21 OF 57 PARA (4) THAT THE BOUNDARY WALL AND GATE ALREADY EX ISTED AT THE SITE AT THE TIME OF ITS PURCHASE FROM THE SELLER OF THE SAID PROPERT Y. THE SAME WAS GOT REPAIRED WHEREVER REQUIRED. ONLY THE NEW STRUCTURE CONSTRUCTED BY THE ASSESSEE HAS BEEN VALUED. RELIEF ON ACCOUNT OF SALVAGE VALUE OF EXISTING STRUCTURE BE A CCOUNTED FOR AT YOUR END PLEASE...' 5.9.3 IT IS THEREFORE EVIDENT THAT THAT THE DVO HAS PROCEEDED TO EVALUATE FROM A CERTAIN SURMISES I.E THE AFFIDAVIT AND THE E XPENDITURE FLOW STATEMENT FOR ALLOCATING THE COST YEAR-WISE. IT IS ALSO EVIDE NT FROM PARA 2.3 OF ANNEXURE-1 OF THE VALUATION REPORT THAT THE ASSESSE E SUBMITTED ONLY YEAR-WISE EXPENDITURE, PHOTO-COPY OF SITE PLAN & AFFIDAVIT. B E THAT AS IT MAY, VALUATION OF PROPERTY BY THE DVO IS ONLY ADVISORY AND THE AO IS NOT DUTY BOUND TO ADOPT THE VALUATION ESPECIALLY WHEN THE BASIS OF VALUATIO N HAS BEEN FOUND UNRELIABLE. IN ANY CASE, THE DVO REPORT HAS NOT TAK EN INTO CONSIDERATION ALL THE FEATURES OF THE HOUSE EITHER AS IS ALSO APPAREN T. THE CONTENTION OF THE ASSESSEE THAT THE AO WAS NOT JUSTIFIED IN REJECTING THE VALUATION REPORT IS THEREFORE NOT TENABLE. 6.3 READING FROM THE ORDER IT WAS SUBMITTED THAT THE CIT(A) THEREAFTER ADDRESSES SOME OF THE CLAIMS AND COUNTERCLAIMS OF THE PAR TIES ON THE ISSUES IN PARA 5.10 OF HIS ORDER AND FINALLY AFTER ADDRESSING THE FACTUAL ASPECT IN PARA 5.10 TO 5.11.1 JUSTIFIES THE DECISION TO ARRIV E AT AN ESTIMATE BASED ON THE DECISION OF THE APEX COURT IN THE CASE OF KACHWALA GEMS VERSUS JCIT (2006) 206 CTR (SC) 585 FOR THE PROPOS ITION THAT IN A BEST JUDGMENT ASSESSMENT THERE IS ALWAYS AN ELEMENT O F GUESSWORK. FOR READY REFERENCE THE RELEVANT PARAGRAPHS CHALLENGED BY T HE ASSESSEE ARE REPRODUCED HEREUNDER : 5.10. THE ISSUE BOILS DOWN TO THE CORRECTNESS IN TH E DETERMINATION OF THE COST OF CONSTRUCTION AND THE INVESTMENT MADE IN THE HOUSE. TO REITERATE THE ONLY WAY OUT FOR THE AO WAS TO ESTIMATE THE COST OF INVESTMENT TO THE BEST OF HIS KNOWLEDGE, IN THE ABSENCE OF THE ASSESS EE PERSISTENTLY FURNISHING NON-COMMITTAL ANSWERS. THE AT) IN THIS R EGARD HAS MADE A REFERENCE THAT THE ESTIMATION OF THE EXPENSES I NCURRED ON CONSTRUCTION AND FURNISHING OF THE HOUSE WAS ON THE BASIS OF THE EVIDENCES FOUND AND GATHERED IN THE COURSE OF THE SEARCH IN P ARTICULAR THE BILLS FOUND AND SEIZED FROM THE RESIDENCE OF HITESH BEDI, THE STATEMENTS OF SHRI HARPAI SINGH, PARTNER OF MJS S,V. CONSTRUCTION AND SHRI HITESH BEDI. THE AGGREGATE OF THESE SEIZED DOCUMENTS COMES TO RS.56, 81,D04/- AS RECORDED BY THE AO IN THE IMPUGNED ORDER. THESE DOCUMENTS REFER TO SOME RUNNING BILLS OF THE CONSTRUCTION OF THE HOUSE WHICH WERE FOUND N OT REFLECTED IN THE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE AS WELL AS BILLS FOR FRIDGES, LCD, PLASMA TVS, GAMLAS ETC. THE ASSESSEE HAS SHOWN THE TOTAL COST OF RS.2,23,92,375/- AND HAS PLEADED THAT THIS TOTAL EX PENDITURE INCLUDES AMOUNT OF THE EXPENDITURE AS PER THE SEIZED DOCUME NTS AND NO ADVERSE INFERENCE NEED TO BE DRAWN ON THE BASIS OF THESE IS OLATED PAPERS. NO ATTEMPT WAS MADE TO CORRELATE THE SAME THOUGH SO AS TO REFUTE THE CONTENTION OF THE AO. THE STATEMENTS RECORDED OF SH RI MR HARPAI SINGH AND ALSO OF SHRI HITESH BEDI, CLEARLY SUGGEST THAT SOME OF THE EXPENSES HAVE NOT BEEN ACCOUNTED FOR. ANSWERS GIVEN HAVE BEEN EVASIVE. EVEN THE RATE ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 22 OF 57 OF COST OF CONSTRUCTION HAS NOT BEEN STATED BY SHRI HARPAI SINGH DESPITE SPECIFIC QUERY FOR THE SECOND TIME [REFER Q. NO 6, 7 AND 14 OF STATEMENT DATED 08,12.2011) SOME FURNISHING BILLS FROM M/S FL OOR AND FURNISHINGS(I) PVT LTD, WHICH IS AN HIGH-END SHOP, WERE ALSO FOUND AND INFORMATION HAD BEEN REQUISITIONED BY THE AO FROM T HE SHOP TOO. IN FACT EVEN IN THE NUMBER OF ROOMS, THE ASSESSEE HAS NOT B EEN FORTHCOMING, STATING THAT IT HAS 9 BED ROOMS, AS AGAINST 26 ROOM S, TWO KITCHENS ON THE GROUND, FIRST AND SECOND FLOOR, WITH BASEMENT HAVIN G A SWIMMING POOL AND A BILLIARDS ROOM MENTIONED BY THE AO BASED ON T HE INFORMATION GIVEN BY SHRI HARPAI SINGH (REFER Q. NO 4 OF STATEMENT DA TED 8.12.2011). NO DOUBT THERE IS NO DISPUTE SO FAR AS THE TOTAL BUILT UP AR EA IS CONCERNED WHICH IS 21500 SQ. FT., BUT SURELY THE NUMBER OF ROOMS WILL HAVE A BEARING IN CALCULATING THE DIRECT AND THE INDIRECT COSTS. IN F ACT THE MOST IMPORTANT PIECE OF EVIDENCE IS THE VIDEOGRAPHY OF THE HOUSE, BOTH INTERIOR AND EXTERIOR, PLUS THE STILL PHOTOGRAPHS. SINCE THE ASS ESSEE HAS CHOSEN NOT TO FILE DETAILS/INFORMATION AS REQUISITIONED BY THE AO , THE ONLY ALTERNATIVE LEFT WAS TO MAKE AN ESTIMATION OF THE TOTAL EXPENDITURE INCURRED TO FIND OUT THE INVESTMENT MADE BY THE ASSESSEE IN THE CONSTRUCTION OF THE HOUSE. 5.11. IT IS OBSERVED THAT THE AO HAS REJECTED THE EXPLANATION OF THE ASSESSEE THAT THE OLD FURNITURE AND FIXTURE OF THE HOUSE NO.149, SECTOR 8, CHANDIGARH, WHERE THE ASSESSEE WAS RESIDING EARLIER , HAVE BEEN REPAIRED AND USED IN THE NEW HOUSE. IN THIS REGARD I NOTICE THAT THE STATEMENT OF MR. HARPAL SINGH RECORDED ON 8.12.2011 IN CONTINUAT ION TO STATEMENT DATED 29.11.2011 AND 4.9.2011, DOES MENTION THAT HI S WORK INCLUDED DEMOLISHING OF THE STRUCTURE INCLUDING BOUNDARY WAL L AND GATE FOR CLEANING AND REUSE AND ALSO REPAIR OF OLD FURNITURE , FITTINGS/ FIXTURE FOR REUSE. HOWEVER AND IMPORTANTLY SHRI HARPAL SINGH COULD NOT SUBSTANTIATE HOW AND THROUGH WHOM THE WORKS WERE GOT DONE. EVEN THE SALVAGE VALUE HAS NOT BEEN INDICATED. THUS, THE AO IS HELD TO BE CORRECT IN THIS ASSUMPTION. 5.11.1, FROM THE ABOVE FACTS AND CIRCUMSTANCES OF T HE CASE, IT IS CRYSTAL CLEAR THAT ASSESSEE HAS NOT COME FORTH WITH ANYTHING MATE RIAL IN THE COURSE OF APPEAL PROCEEDINGS AND EVEN DURING THE DELIBERATION WHEN THE AO WAS ALSO PRESENT THE ASSESSEE HAS ONLY BEEN HARPING THAT THE ESTIMATE OF THE AO BESIDES BEING ARBITRARY WAS WITHOUT ANY BASIS. I AL SO FIND THAT THE ESTIMATIONS BY THE AO IS RATHER ON THE HIGH SIDE. O N THE OTHER HAND THE CLAIM OF THE ASSESSEE THAT RS. 2.2 CRORES COVERS THE COST OF CONSTRUCTION AS WELL AS THE FURNITURE/FITTINGS, THE LANDSCAPE ETC IS ALSO T OO NOMINAL, GIVEN THE VISUAL IMAGES IN PARTICULAR OF THE HOUSE UNDER CONSIDERATI ON. HENCE, RELYING ON A PLETHORA OF CASES AS CITED IN THE RECORDS, I AM ALS O CONSTRAINT TO MAKE AN ESTIMATE OF THE COST OF INVESTMENT TO THE BEST OF M Y JUDGEMENT AS HELD IN THE CASE OF KACHWALA GEMS VS JC1T, [2006] 206 CTR (SC) 585, WHEREIN THE APEX COURT AT PARA 7 HAS HELD AS UNDER: 7. IT IS WELL SETTLED THAT IN A BEST JUDGEMENT ASSE SSMENT THERE IS ALWAYS A CERTAIN DEGREE OF GUESSWORK. NO DOUBT THE AUTHORITIES CONCERNED SHOULD TRY TO MAKE AN HONEST AND FAIR EST IMATE OF THE INCOME EVEN IN A BEST JUDGEMENT ASSESSMENT, AND SHOULD NOT ACT TOTALLY ARBITRARILY, BUT THERE IS NECESSARILY SOME AMOUNT O F GUESSWORK INVOLVED IN A BEST JUDGEMENT ASSESSMENT, AND IT IS THE ASSESSEE HIMSELF WHO IS TO BE BLAMED AS HE DID NOT SUBMIT PR OPER ACCOUNTS. IN OUR OPINION, THERE WAS NO ARBITRARINESS IN THE P RESENT CASE ON THE PART OF THE IT AUTHORITIES. THUS, THERE IS NO FORCE IN THIS APPEAL, AND IT IS DISMISSED ACCORDINGLY. NO COSTS. [EMPHASIS SUPPLIED] ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 23 OF 57 6.4 ADDRESSING THE ORDER IT WAS SUBMITTED THAT THE PART RELIEF GRANTED AND DENIED TO THE ASSESSEE IS CHALLENGED BY THE REVENUE AND THE ASSESSEE IN THE RESPECTIVE APPEALS. THE REASONING SET OU T IN PARA 5.12 AND 5.13 OF HIS ORDER UNDER CHALLENGE IN THE PRESENT PROC EEDINGS BY BOTH THE PARTIES IS REPRODUCED HEREUNDER FROM PAGES 45 TO 46 OF THE IMP UGNED ORDER : 5.12. COST OF CIVIL CONSTRUCTION AND THE FINISHING WORK: 5.12.1THERE IS NO DISPUTE ABOUT THE TOTAL BUILT UP AREA I.E. 21500 SQ. FT. THE ASSESSING OFFICER HAS APPLIED A RATE OF RS.7500 PER SQ. FT. COMPRISIN G OF TWO PARTS I.E. RS. 1500 PER SQ. FT. FOR THE CIVIL CONST RUCTION AND RS.6000 PER SQ.FT. FOR FINISHING WORK. AS AGAINST THIS TRIE DVO HAS COMPUT ED THE COST OF CIVIL CONSTRUCTION AT RS.2,41,42,000/-, WHICH GIVES A RAT E OF APPROXIMATELY RS.1123/- PER SQ.FT THE RATE TAKEN BY THE ASSESSEE IS ABOUT RS.1045/-PER SQ FT. THE RATES GIVEN BY THE ASSESSEE AND DVO ARE FOU ND TO INADEQUATE FOR REASONS ALREADY DISCUSSED IN AFORESAID PARAS. THE E XPANSE OF THE HOUSE LOCATED IN ONE OF THE POSH COLONIES OF CHANDIGARH C ANNOT BE DISREGARDED. THE CONSTRUCTION IS SPREAD LEISUREL Y OVER A PERIOD OF FIVE YEARS WHICH, IN THE ABSENCE OF ANY EVIDENCE OF DEAR TH OF FUNDS (ASSESSEE'S CONCERN M/S TALWARSONS IS INTO JEWELLERY BUSINESS; USES THE VEHICLES OF THE FIRM WHICH ARE ALL HIGH-END VEHICLES- REFER ASSESSMENT R ECORDS OF THE FIRM ( BMW. SPORTS CAR, MERCEDES, CRV HONDA...] AS NO PERS ONAL VEHICLES ARE MAINTAINED BY EITHER THE ASSESSEE OR HIS WIFE; CHIL DREN STUDIED ABROAD), WOULD IMPLY THAT THE ASSESSEE AND HIS FAMILY ENJOYS A RATHER HIGH STANDARD OF LIVING AND HAVE DILIGENTLY AND ELABORATELY GONE ABO UT THE CONSTRUCTION OF ONE OF A KIND HOUSE. AFTER GOING THROUGH THE FACTS ON R ECORD. THE IMPUGNED ORDER AND IMPORTANTLY THE VIDEO FILM OF THE HOUSE, 1 AM I N AGREEMENT WITH THE CONTENTION OF THE AO THAT THIS HOUSE CANNOT BE BUIL D UP WITH SUCH A LOW COST AS DECLARED BY THE ASSESSEE. THE DVO'S VALUATI ON HAS ALREADY BEEN REJECTED. 5.12.2. THE AO HAS HOWEVER APPLIED A RATE OF RS.7, 500 PER SQ .FT. COMPRISING OF TWO COMPONENTS I.E.RS.1,500 PER SQ.FT. FOR CIVIL CO NSTRUCTION AND RS.6,000 PER SQ.FT FOR THE FINISHING WORK. NEEDLESS TO SAY THE C OST OF CONSTRUCTION CAN VARY FROM 700 SQ FT TO OVER 3,000 SQ FT. AND AS ONE WOUL D SAY THE SKY IS THE LIMIT. NO DOUBT THE AO PROCEEDED ON THE BASIS OF INDEPENDENT MARKET REPORT FOR SIMILAR KIND OF HOUSES, BESIDES THE MATERIALS ALREA DY ON RECORD. THE ISSUE WAS ALSO DELIBERATED DURING THE HEARING ON 06.3.201 3, WHEN SHRI MK SINGH, THE AO WAS ALSO PRESENT. EXTRAPOLATING THE U NACCOUNTED EXPENSES OF RS. 56 LAKHS WILL ALSO BE INCORRECT AS THE SEIZE D DOCUMENT MAINLY PERTAIN TO FABRICATION AND FILLING WORK FROM FRONT TO REAR GAT ES. HENCE, I AM AFRAID THE RATE ADOPTED BY THE AO CANNOT BE SUSTAINED. HOWEVER, CON SIDERING THE FACTS OF D CASE, AS ALREADY STATED, 1 AM ALSO CONSTRAINT TO AR RIVE AT AN ESTIMATION WHICH I CONSIDER REASONABLE. COST OF CONSTRUCTION WOULD MEAN THE DIRECT EXPENSES WHICH FORM THE SHELL OL THE BUILDING WHICH CONTAINS COST OF FOUNDATION (I.E THE GROUND WORK) AND SUPER- STRUCTURE [I.E THE BUILDING) WHICH INCLUDES THE COL UMNS, SLABS, WALLS, STAIRS ETC. THE COSTS ALSO INCLUDES COST OF CEMENT, AGGREGATE OF CO URSE, SAND , LABOUR, BRICKS, BAZRI, BITUMEN, MS STEEL, ETC. HERE THERE IS NO INDICATION OF THE DEPTH OF THE FOUNDATION. SUFFICE TO SAY THAT THE HOUSE IS FOR PERSONAL USE A ND SEEING THE SIZE OF THE CONSTRUCTION, THE FOUNDATION WILL BE WELL FOUNDED. 5.12.3. AS FOR THE EXTRA WORK AND FINISHING ETC, IT IS APPARENT FROM THE VIDEOGRAPHY THAT A LOT OF STONE WORK HAS BEEN DONE IN THE HOUSE. NORMALLY, SUCH ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 24 OF 57 GOOD QUALITY OF STONES WOULD COST AROUND RS. 300 PE R SQ. FT. THESE QUALITY STONES HAVE BEEN USED BY MIXING THE SAME WITH THE NORMAL S TONES AND AT SOME PLACES WOODEN CARPENTRY HAS ALSO BEEN DONE. THIS MAY RESUL T INTO A LITTLE LESSER COST. AS THE ASSESSEE HAS NOT INDICATED ANYTHING, I ADD RS. 300/- PER SQ FT AS ADDITIONAL COST. SIMILARLY THE WOOD USED IN THE HOUSE MAY BE BURMA T EAK, NAGPUR TEAK, IVORY COATS WHICH VARIES IN PRICES. AT THE SAME TIME, IN THE VIDEO, IT IS SEEN THAT PANEL DOORS ARE ALSO USED ALONGWITH WOODEN TEAK DOORS IN THE HOUSE WHICH NOMINALLY REDUCES THE COST. AT SEVERAL PLACES ON THE WALLS AN D COLUMNS IT IS SEEN THAT VENEER OR SUN-MICA HAS BEEN PASTED ON WOODEN DOORS TO GIVE AN EXCLUSIVE VIEW. EXTERNALLY, SMALL TILES HAVE BEEN USED WHICH MAY AL SO BE CONSIDERED AS COST EFFECTIVE. THUS RS 200/- PER SQ FEET MAY BE TAKEN T HE COST OF THE SAME. THE VIDEO ALSO SHOW PLASTER OF PARIS (POP) WORK HAS ALSO BEEN DONE WHICH DEFINITELY COSTS MORE. SO AN EXTRA COST OF ABOUT RS . 50 PER SQ. FT INCLUSIVE OF MATERIAL COST SEEMS TO BE REASONABLE. KEEPING IN VIEW THE LARGE AREA OF THE HOUSE OF 21,5 00 SQ FT, IT WOULD MEAN INVOLVING A LOT OF SANITARY WORK & ELECTRICAL WORK WHICH CAN COST UPTO RS. 100 SQ FT & RS. 200 SQ FT RESPECTIVELY. THERE WILL BE AT L EAST 9 BATHROOMS ATTACHED TO EACH OF THE BEDROOMS, BESIDES THE KITCHENS ON EACH FLOOR, THE TERRACE, THE GATES, BOUNDARY WALLS, GARDEN, PARKING, THE DISCOTHEQUE, S WIMMING POOL TO NAME SOME. FURTHER, BOUNDARY WALL WAS ALSO CONSTRUCTED ON ALL SIDES OF PLOT, SIZE 3067 SQ. YDS, WHICH MAY COST RS. 21.5 LACS WHICH COMES AT RS . 100 PER SQ FT ( APPROX) ON 21,500 SQ FT. THE CONTENTION THAT THE OLD GATES WER E REUSED DOES NOT HAVE ANY MERIT AS ASSESSEE NOR HIS ASSOCIATES (REFER TO THE STATEMENTS) WERE A BLE TO COME UP WITH EVEN ONE IOTA OF PROOF. 5.13. HOWEVER AND IMPORTANTLY BESIDES ABOVE, THE HI GH QUALITY AND THE DECOR CANNOT BE OVERLOOKED. NEITHER THE SOFT COSTS VIZ. A RCHITECTURAL DESIGN, VASTU COMPLIANCE, SUPERVISORY COSTS ETC AS WELL AS OTHER PRE AND POST CONSTRUCTION EXPENSES HAVE ALSO NOT BEEN CONSIDERED WHICH ARE AN INTEGRAL PART OF ANY CONSTRUCTION IN PARTICULAR A HOUSE OF SUCH MAGNITUDE, WHICH MAY BE AS HIGH AS RS. 500/- TO RS. 800/- PER SQ FT FOR THIS TYPE OF LAVISH CONSTRUCTION. 1 AM VERY AWARE THAT I HAVE BEEN USING WORDS LIKE 'ONE OF A KIND', 'EXPANSE', 'MAGNITUDE' 'POSH' TO DESCRIBE THE HOUSE, AND HAVING SEEN THE PHOTOGRAPHS AND THE VIDEOGRAPHY OF THE HOUSE AS WAS THE CASE OF THE AO, IT IS NOT WITH A B IASED MIND. THE PHOTOGRAPHS AND THE VIDEOGRAPHY ARE PROOF THAT THE HOUSE IS PALATIAL. EVEN A LAYMAN WILL SEE THAT THE HOUSE COULD NOT HAVE BEEN CONSTRUCTED WITH ONLY RS. 2 -2 AND 1/2 CRORES. HENCE, 1 AM COMPELLED TO VIEW THAT THE RATE OF COST OF CONSTRUCTION MAY BE REASONABLY ESTIMATED AT RS. 3000/- PER SQ. FT. KEEP ING ALL THE ABOVE WORKINGS AND DISCUSSION IN MIND. ACCORDINGLY, 1 DIRECT THE AO TO APPLY A RATE OF RS.3000 PER SQ. FT, FOR DETERMINING THE COST OF CONSTRUCTION, [REFERENCE GHAREXPERT WEBSITE; INDIAN REAL ESTATE FORUM.COM {IREF); THE TRIBUNE, MARCH 2011 AND LOCAL NEWS] 6.5 READING FROM THE ORDER THE COST OF FURNITURE AND FIXT URES ETC AS WAS WORKED OUT IN PARA 5.14 OF THE ORDER WAS ASSAILED. TH E SAID CONCLUSION ALSO CHALLENGED BY THE PARTIES IS REPRODUCED H EREUNDER FOR READY REFERENCE: 5.14 COSTS OF FEATURES/ FURNITURE/FIXTURES ETC. (1) THE AO HAS ESTIMATED A SUM OF RS.L CRORE FOR PROVIDING AND INSTALLING CENTRAL AIR CONDITIONING SYSTEM IN THE HOUSE. THE ASSESSEE HAS STRONGLY CONTENDED THAT THERE IS NO CENTRAL AIR CONDITIONING SYSTEM. NO DOUBT THERE ARE TWO DAIKIN AIR CONDITIONER MENTIONED AS INSTALL ED IN THE DINING ROOM [A SPLIT AC OF 1.14 TON] AND GYM IN THE IMPUGNED ORDER. HOWEVER THERE IS NO INVENTORY OF ACS FOR THE OTHER ROOMS. SURELY THE OTHER ROOMS ARE NOT ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 25 OF 57 SHORN OF ANY AIR CONDITIONERS. THERE IS CLEARLY A L OT OF DUCTING AS EVIDENT FROM PHOTOGRAPHS, REFERENCE IS DRAWN TO SI 58 OF AN NEXURE -A, PART 1 VIEW OF SOFA SET CENTRE TABLE ALONGWITH PAINTINGS'; SI 203 OF PART II 'VIEW OF WOODEN SIDE-BOARD'; SI 179 PART II VIEW OF CUPBOARDS'; SI 134 OF PART I I' VIEW OF DRAWING TABLE ( LOBBY)'. SO SOME MECHANISM HAS BEEN PUT IN PLACE TO ENSURE THAT THE ROOMS ARE FACILITATED WITH SOME AIR CONDITIONING SYSTEM. ASSESSEE HAS VEHEMENTLY STATED THAT THE HOUSE IS NO T CENTRALLY AIR- CONDITIONED, BUT AT THE SAME TIME HAS CHOSEN NOT BE FURNISH THE POWER/ELECTRICITY LOAD SANCTIONED NOR THE CAPACITY OF THE GENERATOR SETS AS ASKED IN THE SHOW-CAUSE ISSUED BY THE AO. AC PLANT FOR CENTRALLY AIR CONDITIONING WOULD COST A MINIMUM OF RS. 25 LAKHS. SO IN THE ABSENCE OF AN AC PLANT IN THE VIDEO, BUT THE EXISTENCE OF A LOT OF DUCTINGS, I PROCEED IN THIS FASHION. NORMALLY A 1.5 TON AC CAN COVER AN AREA OF 150 SQ.FT. AND COSTS RS.35,000/- APPROX. ( HAVING THREE STAR CERTIFICATION] . THERE IS NO DISPUTE TO THE EFFECT THAT THE HOUSE HAS OPEN AREA, SWIMMING POOL, KITCHEN, BATHROOMS, ETC WHERE NO AIR CONDITIONING WILL BE REQUIRED. OUT OF 21,500 SQ FT, THE AREAS USED FOR AIR CONDITIONING CAN BE TAKEN AT 9000 SQ FT , R EMAINING WILL BE FOR AREA DEFINED BEFORE. TAKING INTO CONSIDERATION THAT 60 AIR CONDITIONERS MAY BE REQUIRED TO COVER 9,000 SQ FT AND APPLYING T HE RATE OF RS.35,000 PER 1.5 TON AC THE COST OF AIR CONDITIONING WILL BE RS.21 LAC ONLY. THE ADDITIONAL COST ON ACCOUNT OF DUCTING AT SEVERAL PL ACES CANNOT BE IGNORED. DUCTING INCREASES COST OF CEILING AND USE OF MORE A LUMINIUM WHICH WILL DEFINITELY INCREASE THE COSTS. ACCORDINGLY AO IS DIRECTED TO ADD RS. 10 LAKHS, THEREBY TAKING THE TOTAL COST TO RS.31,00 ,000/- AND NOT RS.L CRORE AS ESTIMATED. (2) THE AO HAS ESTIMATED THE COST OF THE GENE RATOR SET AT RS.50 LAC. NO BASIS HAS BEEN GIVEN IN THE ASSESSMENT ORDER BY THE AO. THE ASSESSEE HAS CONTENDED THAT THERE ARE ONLY TWO GENE RATOR SETS OF 65.5 KVA EACH. OUT OF THESE TWO GENERATORS, ONE IS STATE D TO BE ABOUT 8-10 YEARS OLD WHICH WAS SHIFTED FROM THE OLD HOUSE. AS REGARDS THE OTHER GENERATOR SET IT HAS BEEN CONTENDED THAT IT COSTS O NLY RS.2 LAC AND THE COST OF WHICH HAS BEEN INCLUDED IN THE COST ESTIMAT E SUBMITTED BY THE ASSESSEE. THIS CONTENTION IS NOT ACCEPTABLE. A GENE RATOR SET OF 125 KVA COSTS AROUND RS.8 LAC. WHICH GENERATES POWER EQ UIVALENT TO 98 KWA. COMMERCIALLY, 80% OF MAXIMUM CAPACITY (I.E 78. 4 KWA) IS CONSIDERED NORMAL OUTPUT. THIS 78.4 KVA WHICH IS SU FFICIENT TO RUN MORE THAN 50 AIR CONDITIONERS WHICH AS DISCUSSED EA RLIER IS SUFFICIENT TO COVER WHOLE COVERED AREA OF THE HOUSE. HOWEVER, IT IS ALSO TRUE THAT ALL A/CS WILL NOT BE USED AT ALL TIMES SIMULTANEOUSLY. APART FROM AIR CONDITIONING, USE OF LIGHT, FANS, TVS, ETC WILL ALS O BE THERE. ACCORDINGLY KEEPING IN VIEW THE MAGNITUDE OF THE HOUSE AND THE EXTERNAL PORTION OF THE PREMISES 1 AM OF THE VIEW THAT USE OF 125KVA IS SUFFICIENT SUCH DC SET COSTS RS. 8 LAC APPROX. INCLUSIVE OF ITS EAR THING WORK [COPPER WIRING] AND INSTALLATION. THIS ALSO TAKES INTO CONS IDERATION THE EXPLANATION OF THE ASSESSEE THAT ONE OF THE GENERAT OR SETS WAS OLD AND SHIFTED FROM THE OLD HOUSE, THOUGH THE SAME IS WITH OUT ANY EVIDENCE. (3) THE AO HAS FURTHER ESTIMATED A SUM OF RS.25 LAC ON ACCOUNT OF THE GYMNASIUM HALL INCLUDING THE INTERIOR AND EQUIPMENT . GYMNASIUM HALL IS PART OF THE HOUSE BUILT UP AREA. THE AO LIAS MADE A GENERAL ESTIMATE OF RS.25 LAC WITHOUT GIVING ANY BREAKUP. ON GOING THRO UGH THE SUBMISSION OF THE ASSCSSCC, THE GYM EQUIPMENT INCLUDES FOLLOWING ITEMS:- I) BENCH PRESS 1 NO. MATRIX II) LEG EXTENSION 1 NO. MATRIX III) JAGGAR 1 NO. MATRIX IV) TREAD MILL 1 NO. MATRIX ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 26 OF 57 V) LEG PULL 1 NO. MATRIX VI) CHEST PRESS 1 NO, MATRIX IN THE ABSENCE OF ANY BASIS STATED IN THE ASSESSMEN T ORDER, THE COST OF THESE ITEMS IS ESTIMATED AT RS. 12 LAC I,E. AVERAGE RS.2 LAC EACH ITEM. THE SITE OF THE BRAND 'MATRIX 1 WAS SEEN. SINCE THE COST OF THE FINISHING HAS BEEN INCLUDED AS ADD-ONS ITEMS TO THE COST OF CONST RUCTION THERE IS NO JUSTIFICATION FOR MAKING A SEPARATE ADDITION ON THI S ACCOUNT. THE AO IS DIRECTED TO TAKE RS.12 LAC ON THIS ACCOUNT INSTEAD OF RS.25 LAC. (4) THE AO HAS ESTIMATED A SUM OF RS.25 LAC FOR SWI MMING POOL. JUST FOR CLARITY, AS AGAINST THIS THE DVO IN HIS REPORT HAS ESTIMATED COST OF RS.4,80,000/-. ASSESSEE HAS OBJECTED TO ESTIMATION OF RS 25 LAC BY THE AO. THE ASSESSEE IS RELYING UPON DVO REPORT. TAKING INT O CONSIDERATION THE OVERALL FACTS 1 CONSIDER THAT THE COST ESTIMATED BY THE AO IS ON THE HIGHER SIDE. I ESTIMATE THE SAME AT RS.8.5 LAC DUE TO: (A) THE COST OF BASIC CONSTRUCTION OF SWIMMING POOL WAS ALREADY CONSIDERED DURING STRUCTURE CONSTRUCTION COST AS EX PLAINED ALREADY. HOWEVER ADDITIONAL COST FOR SWIMMING POOL AREA MUST BE INCURRED TO PROTECT THE SWIMMING POOL AREA FROM DAMAGES INCLUDI NG TILES INSTALLED IMMEDIATELY OUTSIDE THE SWIMMING POOL TO AVOID SLIP PAGE AND (B) COST OF PUMPS AND ADDITIONAL MACHINERY USED FOR PU MP IN AND OUT WATER FROM THE SWIMMING POOL (C) VIEW OF SWIMMING POOL WITH JACCUZI AS IN SI. 15, PA RT L OF ANN-A OF PHOTOGRAPHS, FROM WHICH IS QUITE EVIDENT THAT THE P OOL AND THE AMBIENCE IS OF QUALITY. AO IS DIRECTED TO TAKE COST OF SWIMMING POOL AT RS. 8.5 LAC INSTEAD OF RS.25 LAC. (5') THE AO HAS FURTHER ESTIMATED A SUM OF RS. L CR ORE ON ACCOUNT OF THE FURNITURE. IN THIS REGARD THE AO HAS STATED THAT THERE ABOUT 3 0 SOFA SETS, 40 SIDE TABLES, 30 CENTRAL TABLES, 10 DOUBLE BEDS, 20 CUPBOARDS AND THERE ARE ALSO LAMP SHADES AND CHANDELIERS. THE AO, HOWEVER, HAS NOT GIVEN ANY BIFURCATION AND THE BASIS FOR ESTIMATING THE VALUE AT RS. L CRORE. THE ASSESSES ON THE OTHER HAND HAS CONTENDED THAT INVENTORY OF THE VALUABLE ITEMS WERE MADE AT THE TIME OF THE SEARCH AND SINCE THIS WAS OLD FURNITURE SHIFTED FROM THE OLD HOUSE, WHERE THE ASSESSEE WAS EARLIER RESIDING, THERE IS NO JUSTIFICATION FOR MAK ING ANY FURTHER ADDITION AND FURTHER IN ANY CASE THE ASSESSEE HAS S HOWN THE TOTAL AMOUNT OF THE EXPENDITURE IN THE CONSTRUCTION OF TH E HOUSE IT WILL INCLUDE EXPENDITURE INCURRED ON THESE ITEMS AS WELL . AFTER GOING THROUGH THE FACTS 1 AM OF THE VIEW INSTEAD OF MAKING A LUMP -SUM ESTIMATE ON THERE A NEED TO ESTIMATE THE COST OF EACH OF THE IT EMS WHICH COMES AS UNDER:- SI. NO, ITEM PRICE EACH (RS,) TOTAL COST (RS.) 1. 30 SOFA SETS 25,000 7,50,000 2. 40 SIDE TABLES 10,000 4,00,000 3, 30 CENTRAL TABLES 15,000 4,50,000 4. 10 DOUBLE BEDS 50,000 5,00,000 5. 20 CUP BOARDS 75,000 15,00,000 6. LAMP SHADES / CHANDELIERS 5,00,000 7. MISCELLANEOUS 10,00,000 TOTAL 51,00,000 ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 27 OF 57 AO IS DIRECTED TO TAKE COST ACCORDINGLY AT RS. 51,0 0,000/- INSTEAD OF RS. L CRORE ON ACCOUNT OF THE FURNITURE. (6) THE AO HAS FURTHER ESTIMATED A SUM OF RS.10 LAC ON ACCOUNT OF THE ELECTRONIC GADGETS SUCH AS TVS, DVD PLAYERS, MUSIC SYSTEM, CAMERAS, ETC. THE CHILDREN WOULD DEFINITELY HAVE IAPTOPS/I-PADS A ND OTHER GADGETS. THE ASSESSEE HAS CONTENDED THAT NO BASIS WHATSOEVER HAS BEEN GIVEN ABOUT THE RATE, VALUE AND THE BRAND AND THE AO HAS IGNORED TH E LIST OF THE VALUABLE INVENTORY PREPARED AT THE TIME OF THE SEARCH. AFTER CONSIDERING THE TOTALITY OF THE FACTS I FIND THAT THE ESTIMATION MADE BY THE AO OF RS.10 LAC IS REASONABLE AND THE SAME IS UPHELD. [7] THE AO HAS FURTHER MADE AN ESTIMATION OF RS.2 C RORE ON ACCOUNT OF THE PAINTINGS AND MURALS, FANCY GLASSES AND CRYSTALS, E TC. IN THIS REGARD THE ASSESSEE HAS SUBMITTED THAT THE ESTIMATE MADE BY TH E AO IS ABSOLUTELY ARBITRARY, THAT A SEARCH HAS BEEN CARRIED OUT ON TH E PREMISES OF THE ASSESSEE WHERE LIST OF EACH AND EVERY VALUABLES FOUND DURING THE COURSE OF THE SEARCH WAS PREPARED AND THAT THESE PAINTINGS WERE NOT ORIG INALS BUT JUST PHOTOGRAPHS AND PICTURES WHICH HAVE BEEN FRAMED VERY WELL AND T HAT IT CANNOT BE COMPARED AND VALUED AS ORIGINAL PAINTINGS. 1 HAVE G ONE THROUGH THE FACTS OF THE CASE AND ALSO THE VIDEO FILM. NO DOUBT THESE P AINTINGS LOOK ATTRACTIVE BUT AT THE SAME TIME THE SAME CANNOT BE CONSIDERED TO BE ORIGINALS WITHOUT BRINGING EVIDENCE TO THIS EFFECT. IT IS ALSO A FACT THAT A LIST OF VALUABLES WAS PREPARED WHICH HAS ALSO BEEN QUOTED BY THE AO IN TH E IMPUGNED ORDER, LOOKING AT THE VIDEO AND PHOTOGRAPHS, IT IS APPAREN T THAT ALL 'VALUABLES' HAVE NOT BEEN INVENTORISED. THERE IS NO MENTION OF THE NUMEROUS DISPLAYS OF THE DECLARATION PIECES COMPRISING OF AMONGST OTHERS THE ORNAMENTAL BONE- CHINA / CUT CRYSTAL VASES IN PARTICULAR. THE AO HAS ALSO NOT GIVEN ANY BASIS FOR ESTIMATING THE SAME AT RS.2 CRORES, EVEN IN THE REM AND REPORT ALSO. CONSIDERING THE TOTALITY OF THE FACTS, I AM OF THE VIEW THAT AN ESTIMATE OF RS.30 LACS ON THIS ACCOUNT WILL BE SUFFICIENT. THE AO IS DIRECTED TO TAKE RS.30 LACS INSTEAD OF RS.2 CRORE. (8) THE AO HAS FURTHER MADE AN ESTIMATE OF RS.35 LA C ON ACCOUNT OF THE LANDSCAPING OF GARDEN/ OPEN SPACES. HOWEVER THE AO HAS NOT GIVEN ANY BASIS FOR ARRIVING AT A FIGURE OF RS.35 LAC. THE ASSESSEE HAS OBJECTED TO SUCH ESTIMATION AND HAS CONTENDED THAT THIS WORK WAS DON E IN- HOUSE AND SERVICES OF ANY PROFESSIONAL LIKE MS GEETA SINGH HAS NOT BEE N UTILIZED. ON GOING THROUGH THE IMPUGNED ORDER I DO NOTICE THAT THE AO MADE REFERENCE TO ONE VERY FAMOUS ARTIST, MRS. GEETA SINGH WHO CHARGES AN AMOUNT OF RS.25 TO 30 LACS BUT THE AO HAS NOT BROUGHT ANY MATERIAL THAT T HIS WORK WAS DONE BY MRS. GEETA SINGH. GENERALLY, MAJOR COST OF LANDSCAP ING CONSISTS OF SAND, MUD PLANTS AND GRASS USED. CONSIDERING THE OVERALL FACT S OF THE CASE, I AM OF THE VIEW THAT THE COST OF LANDSCAPING CAN BE ESTIMATED AT RS.2 LAC PER KANAL AND FOR THE TOTAL 4.5 KANALS, THE SAME WILL BE RS.9 LAC . HOWEVER CONSIDERING THE NATURE OF THE LANDSCAPING DONE WITH SUCH PRECISION AND AESTHETIC DISPLAY, I AM COMPELLED TO ADD ANOTHER RS, 10 LACS; THEREBY TAKIN G THE TOTAL AT RS. 19 LACS AS AGAINST RS.35 LAC ESTIMATED BY THE AO. 1 ORDER IT A CCORDINGLY. [9] THE AO HAS FURTHER ESTIMATED THE COST OF BILLIA RD ROOM WITH BILLIARD STICKS AT RS.15 LAC. NO BASIS HAS BEEN GIVEN IN THE IMPUGNED ORDER. THE ASSESSEE HAS CONTENDED THAT IT IS A POOL TABLE MEAS URING 9 FT. X 4.5 FT. A TOURNAMENT CLASSIC TABLE WITH ITALIAN SLATES COST R S, 1.65 LACS APPROX. ALONG WITH ACCESSORIES SUCH AS BALLS, TIPS MASTER, CUES S TICKS, TRIANGLE, ETC I AM OF THE VIEW THAT THE ENTIRE COST OF CAN BE CONSIDERED AT RS.3 LAC AS AGAINST RS.25 LAC ESTIMATED BY THE AO. AO IS DIRECTED TO TA KE RS.3 LAC INSTEAD OF RS.25 LAC. (10) THE AO HAS FURTHER ESTIMATED A SUM OF RS.25 LA C FOR THE BIO MATRIX LOCK SYSTEM. THE AO HAS NOT GIVEN ANY BASIS FOR THE SAME. THE ASSESSEE IN THE WRITTEN SUBMISSION HAS ALSO RAISED THIS ISSUE. BIO MATRIX ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 28 OF 57 LOCK SYSTEM IS A NORMAL SECURITY SYSTEM BEING FITTE D IN ALMOST ALL FLATS AND IN OFFICES TOO THESE DAYS AND COSTS BETWEEN RS.2,00 0/- TO RS.10,000/- PER LOCK SYSTEM, CONSIDERING THE TOTALITY OF THE FACTS 1 ESTIMATE THE COST OF CUSTOMIZED BIO MATRIX LOCK SYSTEM AT RS3 LAC AS AGA INST RS.25 LAC CONSIDERED BY THE AO AS THE SYSTEM ARE NOT USED IN KITCHENS, COMMON AREA AND TOILETS. THE MAIN DOORS, THE ENTRY GATE POINTS AND PERHAPS THE BEDROOMS MAY BE PLACES WHERE BIO-MATRIX LOCK SYSTEM COULD HAVE BEEN INSTALLED. AO IS THEREFORE DIRECTED TO TAKE RS.3 LA C INSTEAD OF RS.25 LAC. (11) THE AO HAS FURTHER ESTIMATED THE COST OF LIFT AT RS.10 LAC. NO BASIS HAS BEEN GIVEN IN THE IMPUGNED ORDER NOR IN THE REM AND REPORT FOR APPLYING A RATE OF RS.10 LAC ON ACCOUNT OF THE LIFT . A LIFT CARRYING 4 PERSONS COSTS AROUND RS. 6 TO 8 LAC INCLUDING INSTA LLATION COST AND MAKING OF MACHINERY ROOM IN BASEMENT AS WELL AS ON TOP FLO OR. 1 ACCORDINGLY ESTIMATE THE COST OF THE LIFT ON THIS ACCOUNT AT RS .8 LAC. AO IS DIRECTED TO TAKE RS.8 LAC INSTEAD OF RS.10 LAC. (12) THE AO HAS FURTHER ESTIMATED A SUM OF RS.25 LAC ON ACCOUNT OF DISCOTHEQUE ALONG WITH LIGHTS AND FLOORS, ETC, TH E AO HAS NOT GIVEN ANY BASIS FOR THE SAME. THE ASSESSEE HA.-: OBJECTED TO THIS ESTIMATE AND HAS STATED THAT THESE ARE OF HARDLY FEW THOUSAND RUPEES . THE COST OF CONSTRUCTION, FINISHING AND WOOD WORK HAS ALREADY BEEN CONSIDERED IN THE OVERALL FINISHING COST IN AFORESAID PARAS. THE COST OF THE EXTRA ITEM S LIKE SPECIAL LIGHTS, SPECIAL FLOOR, ETC. MAY COST RS.5 LAC AND ACCORDINGLY I EST IMATE THE SAME AT RS.5 LAC AS AGAINST RS.25 LAC ESTIMATED BY THE AO. AO IS DIRECT ED TO TAKE RS.5 LAC INSTEAD OF RS.25 LAC. 6.6. THE ISSUES IN VIEW OF THE ABOVE IT WAS SUBMITTED HAD BEEN SUMM ED UP BY THE CIT(A) IN PARA 5.15 WHICH CONCLUSION HAS BEEN C HALLENGED BY BOTH THE PARTIES. THE RELEVANT FACT IS REPRODUCED HEREUNDER: 5.15 TO SUM UP, THE COST OF CONSTRUCTION IS TAKEN A T RS. 3,000/- PER SQ, FT [REF. PARA 5.13] AND THE EXTRA ITEMS AS PER PARA 5. 14 (1) TO (12) BE ADDED TO IT. THEREAFTER, THE ALLOCATION YEAR-WISE IS DIRECTE D TO BE MADE AS DONE IN THE IMPUGNED ORDER. ACCORDINGLY, GROUND NOS. 12 TO 21 A RE DISPOSED OFF ACCORDINGLY AND AO IS DIRECTED TO RECOMPUTE THE COS T OF INVESTMENT AS PER THE DIRECTION GIVEN HEREIN ABOVE. 7. AGGRIEVED BY THIS FINDING BOTH THE ASSESSEE AND THE REVE NUE ARE IN APPEAL BEFORE THE ITA T. 8. THE LD. AR INVITING ATTENTION TO THE GROUNDS RAISED BY THE ASSESSEE IN THE APPEALS SUBMITTED THAT THE RELIEF GRANTED BY THE CIT-A IS UNDER CHALLENGE BOTH BY THE ASSESSEE AND THE REVENUE. CARRY ING US THROUGH THE FINDINGS AND THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER IT WAS SUBMITTED THAT WITHOUT GIVING UP THE ISSUE THAT THERE WA S NO REQUIREMENT FOR THE ASSESSEE TO MAINTAIN RECORD OF THE C OST OF CONSTRUCTION OF HIS RESIDENTIAL HOUSE AS NO EXPENSES WERE BEING CLAIMED IN REGARD THERETO WHICH ISSUE ASSESSEE NEED NOT BELABOR IN VIEW OF THE ACCEPTED LEGAL POSITION. IT WAS HIS SUBMISSION THAT THE ADD ITIONS HAVE BEEN MADE AND SUSTAINED ENTIRELY ON THE BASIS OF PRESUM PTIONS ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 29 OF 57 CONJECTURES AND SURMISES . IT WAS SUBMITTED THAT NO EX PENDITURE OF THE SAID CONSTRUCTION HAS BEEN CLAIMED. THE EXPENDITURE IT WAS SUBMITTED WAS NOT A BUSINESS EXPENDITURE OF THE ASSESSEE THUS TH E INSISTENCE OF THE REVENUE TO LOOK INTO THE SAME WITH A MAGNIFYING GLASS IS NOT NECESSARY. THE ARGUMENTS HAVE BEEN CONSIDERED AND ALSO ACCEPTED IN PART BY THE CIT-A HOWEVER DESPITE THAT ON THE BASIS OF HYPERBOLE AN D SUSPICIONS CREATED BY THE VIDEO RECORDING AND FLOWERY LANGUAGE OF TH E AO THE ADDITIONS HAVE BEEN PARTLY SUSTAINED. CARRYING US THROUG H THE ARGUMENTS ADVANCED ON BEHALF OF THE ASSESSEE BEFORE THE ASSESSING OFFICER; THE INTERACTIONS WITH THE DVO AND THE AO; THE FIND INGS CHALLENGED IN APPEAL BEFORE THE CIT(A) THE ARGUMENTS ADVAN CED ON BEHALF OF THE ASSESSEE TO THE REMAND REPORT AND REPLY TO TH E REMAND REPORT OF THE ASSESSING OFFICER AND ARGUMENTS ADVANCED IN THE REJO INDER OF THE ASSESSEE ALONGWITH THE COPIES OF THE SEIZED DOCUMENTS SCANNED ON R ECORD AND AVAILABLE IN THE PAPER BOOK FILED IT WAS SUBMITTED HAVE ALL BEEN ADDRESSED BY THE ASSESSEE AND IN THE PRESENT CASE EV EN THE DVOS REPORT SOUGHT BY THE DEPARTMENT SUPPORTS THE CASE O F THE ASSESSEE. IN THE CIRCUMSTANCES IT WAS HIS SUBMISSION THAT ADDITION COULD NOT HAVE BEEN MADE OR SUSTAINED. THE CONCLUSION OF THE AO APPRO VED BY THE CIT(A) THAT THE DVOS REPORT WAS NOT RELIABLE IT WAS SUBM ITTED ONLY BECAUSE IT SUPPORTS THE CASE OF THE ASSESSEE WAS ASSA ILED. THE AO DISCARDED THE REPORT IT WAS SUBMITTED ONLY ON THIS GROU ND AND PROCEEDED TO ESTIMATE THE ADDITIONS TO BE MADE WHEREIN ADMITTEDLY HE WAS NOT AN EXPERT. IN THE FACTS THE PRESENT CASE IT WA S SUBMITTED THE ADDITION HAS BEEN MADE BY THE AO AND PARTLY SUSTAINED BY THE CIT(A) IGNORING THE FACTUAL AND LEGAL ASPECTS. 8.1 IT WAS SUBMITTED THAT THE FUNDAMENTAL ISSUE WHICH THE TAX AUTHORITIES NEED TO ADDRESS IS THAT ONCE THE DVOS REP ORT HAS BEEN SOUGHT BY THE ASSESSING OFFICER ON WHAT BASIS CAN IT BE D ISCARDED BY THE ASSESSING OFFICER AND HE BE ALLOWED TO ESTIMATE THE ADDITION S TO BE MADE. IT WAS HIS SUBMISSION THAT HAD THE ASSESSING OFFICER BEEN CAPABLE OF ESTIMATING THE COST OF CONSTRUCTION THEN THERE WOULD HAV E BEEN NO OCCASION TO REFER THE MATTER TO THE VALUATION CELL. HAVIN G REFERRED THE MATTER IT WAS SUBMITTED THE AO WAS BOUND TO ACCEPT IT. IN CASE HE WANTED TO VARY THEN THE AO SHOULD HAVE BROUGHT SOMET HING ON RECORD TO SHOW THAT THE REPORT OF THE VALUATION OFFICER OF THE DEP ARTMENT ITSELF IS NOT RELIABLE. HAD THAT BEEN THE CASE AFTER SETTING OUT TH E REASONS HE ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 30 OF 57 SHOULD HAVE SOUGHT THE HELP OF ANOTHER EXPERT INSTEAD O F RESORTING TO ESTIMATE HIMSELF WHEREIN HE WAS MOST DEFINITELY NOT AN EXP ERT. THE CONCLUSION OF THE CIT-A IN THE CIRCUMSTANCES THAT THE VA LUATION REPORT OF THE VALUATION EXPERT WAS CONSIDERED BY THE ASSESSING OF FICER TO BE UNRELIABLE AND THUS AND HAD TO BE VARIED WAS ALSO ASSAILE D. ATTENTION WAS INVITED TO PARAGRAPH 5.9.1 5.9.2 AND PARA 5.9.3 OF THE C IT-A AND SAID THAT THE CIT(A) HAS ALSO PROCEEDED ON SURMISES. REFER RING TO THE ORDER OF THE CIT(A) SPECIFICALLY THE CONCLUSION THAT THE RE PORT OF THE VALUATION OFFICER WAS ONLY ADVISORY AND THE DVO HAS NOT C ONSIDERED ALL THE FEATURES OF THE HOUSE ACCORDINGLY IT WAS UNRELIABLE WA S VEHEMENTLY ASSAILED AS BEING BIASED AND CONTRARY TO THE SETTLED LEGAL POSITION. 8.2 IT WAS SUBMITTED THAT THE DEPARTMENTAL ATTITUDE IS SURPRISING AND SHOCKING BECAUSE IF THE REPORT OF THE VALUATION OFFICER IS U NRELIABLE THEN THE ASSESSING OFFICER OR FOR THAT MATTER THE CIT-A SHOULD HAVE REFE RRED THE SAME TO SOME VALUATION EXPERT TO REBUT THEIR OWN VALUAT ION REPORT. THE DECISION TO PROCEED TO ESTIMATE THE ADDITIONS BY A NON EXPERT WAS CONTRARY TO ALL SETTLED LEGAL PRINCIPLES. 8.3 THE CONTRADICTIONS AND CONFUSIONS IN THE CIT-AS ORDE R IT WAS SUBMITTED ARE FURTHER EVIDENT FROM PARA 5.11 OF THE IMPUGN ED ORDER WHERE IT IS ACCEPTED THAT THE CLAIM OF DEMOLITION OF THE OLD CONSTRUCTION WAS SUPPORTED BY THE STATEMENTS RECORDED OF MR HARPA L SINGH ON 08/12/2011 IN CONTINUATION TO STATEMENT DATED 29/11/20 11 AND 04/09/2011 AND THE CIT(A) STILL PROCEEDS TO DENY APPROPR IATE RELIEF. THE LETTER OF THE DVO RELIED UPON BY THE CIT(A) AND STILL TO MIS READ THE SAME IGNORING THAT THE DVO CLEARLY IN THE LETTER STATES THAT AO MAY GIVE NECESSARY RELIEF ON THIS GROUND WAS ASSAILED AS A SELECTIVE READING. THE SAID LETTER IT WAS ARGUED IS NOTED BOTH BY THE AO AS WE LL AS THE CIT(A) SELECTIVELY. 8.4 INVITING ATTENTION TO PARAGRAPH 5.8 OF THE IMPUGNED OR DER IT WAS SUBMITTED THAT THE CIT-A KNOWS AND ACCEPTS THE FACT T HAT FOR THE SAID EXPENDITURE THE ASSESSEE WAS NOT REQUIRED TO MAINTAIN A NY BOOKS OF ACCOUNTS AS IT WAS NOT AN EXPENDITURE CLAIMED BY THE AS SESSEE HOWEVER HE STILL PROCEEDS TO JUSTIFY THE ACTION OF THE ASSESSING OFFICER. 8.5 ADDRESSING THE SCANNED DOCUMENTS REPRODUCED IN THE ASSESSMENT ORDER PERTAINING TO THE FURNISHING AND FLOORING ETC IT WAS SUBMITTED THAT ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 31 OF 57 THE DEPARTMENT HAS LOST SIGHT OF THE FACT THAT IT IS THE ISSUE OF CONSTRUCTION WHICH WAS BEING CONSIDERED THE CONSTRUCTION IT WAS SUBMITTED ADMITTEDLY STOOD MAJORLY CONCLUDED IN THE FIRST FEW YEARS. THE DOCUMENTS RELIED UPON AND REFERRED TO IN THE ASSESSMENT ORDER IT WAS SUBMITTED ITSELF DEMONSTRATES THIS FACT AND TOTAL AT BEST TO RS. 56,81,0004/- THAT ALSO HAVE BEEN INCLUDED IN THE COST OF C ONSTRUCTION. SIMILARLY THE FURNISHING EXPENSES OF THE ASSESSEES WIFE SMT . NEENA TALWAR PERTAINING TO CURTAINS ETC. ITSELF ARE OF THE LAST YE AR AND TOTAL OF RS. 6,14,529/- AND COULD NOT HAVE BEEN THE BASIS FOR GENE RAL OVERALL ADDITION IN ALL THE YEARS. 8.6 SIMILARLY THE EXPENDITURE ON ACCOUNT OF AC ETC IT WAS SUBMITTED EVIDENTLY COULD HAVE BEEN INCURRED IN THE LATER YEARS AN D THAT TOO LIMITED TO THE NUMBER OF ACS MENTIONED IN THE INVENTORY PREPA RED AT THE TIME OF THE SEARCH. 8.7 IN THE FACTS OF THE PRESENT CASE IT WAS HIS SUBMISSION THAT WHEN THE HYPERBOLE AND FLOWERY LANGUAGE USED WHILE CONSIDERING THE FACTS AS CONSIDERED IN THE ASSESSMENT ORDER AND THE CIT(A)S OR DER ARE REMOVED IT WOULD SHOW THAT WHAT IS APPEARING TO BE VERY SURPRISING AND SHOCKING TO THE ASSESSING OFFICER ARE INFACT VERY ROUTINE AND NORMAL FE ATURES IN HOUSE. FOR INSTANCE THE TAX AUTHORITIES HAVE DELIBERATED AT LENGTH ON THE PAINTINGS AND MURALS; GLASS WARE ETC. AND PRESUMED EVERYT HING TO BE ORIGINAL AND NEW RELYING UPON PHOTOGRAPHS TAKEN. ATTENTIO N WAS INVITED TO THE INVENTORY TAKEN IN THE COURSE OF THE SEARCH WH ICH HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER ITSELF AND CONFRONTED TO THE ASSESSEE BY WAY OF A SHOW CAUSE NOTICE. IN THESE CIRCUMSTANCES IT WAS HIS SUBMISSION THAT IN THE INVENTORY TAKEN THERE IS NO REFER ENCE TO ANY ORIGINAL PAINTINGS AND MURALS; GLASS WARE OR ANY VALUABLE ITEM S. THE SUSPICIOUS AND CONJECTURES IT WAS SUBMITTED HAVE PREVAILE D IN THE MINDS OF THE AO AS WELL AS THE CIT(A). 8.8 SIMILARLY THE SUSPICION ON ACCOUNT OF LANDSCAPING ETC S TATED TO HAVE BEEN DONE BY A PROFESSIONAL LIKE MS GITA SINGH SUPPOS EDLY SOME EXPENSIVE CONSULTANT IT WAS SUBMITTED IS NOT SUPPORTED B Y ANY FACT OR EVIDENCE ON RECORD EVEN AFTER CARRYING OUT A SEARCH AN D HAS BEEN MADE PURELY ON SUSPICIONS. ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 32 OF 57 8.9 THE ASSESSING OFFICER IN THE FACTS OF THE PRESENT CASE IT WAS SUBMITTED HAS ALSO WAXED ELOQUENT ON BIOMETRICS LOCK SYS TEM. IT WAS HIS SUBMISSION THAT THE SAID MACHINERY IS AVAILABLE FOR A FEW TH OUSAND RUPEES EASILY AND READILY AVAILABLE IN CHEAP MOBILES; AT EVE RY GOVERNMENT OR PRIVATE OFFICE; FACTORY ETC. TO MARK PRESENC E, ATTENDANCE OR UNLOCK DATA ETC. THE PRESUMPTION THAT IT IS HIGH END T ECHNOLOGY HAD LED THE ASSESSING OFFICER TO MAKE AN ADDITION OF RS. 25 LAKH BASED ON NO FACT OR EVIDENCE WHICH THE CIT-A APPEALS HAS BEEN KIND ENOUGH TO R EDUCE TO 3 LACS BUT EVEN THAT AMOUNT IT WAS SUBMITTED IS PRE POSTEROUSLY HIGH CONSIDERING THE CHEAPLY AVAILABLE TECHNOLOGY. 8.10 SIMILARLY FOR COST OF LIFT; DISCOTHEQUE; BILLIARD ROOM MADE BY THE ASSESSING OFFICER AT RS. 10 LAKH 25 LAKH AND 25 LAKH AT RAN DOM HAS KINDLY BEEN REDUCED BY THE CIT-A AT 8 LAKH, 5 LAKH, AND 3 LAKH BUT EVEN THE SAID ADDITION IT WAS SUBMITTED IS ON A HIGHER SIDE AND HAS BEEN FULLY SHOWN BY THE ASSESSEE IN ITS WORKING. IN FACT THERE WAS NO BILLIARD T ABLE IT WAS A CHEAP POOL TABLE. INVITING ATTENTION TO THE DVOS REPORT IT WAS CONCEDED THAT THE COST OF LIFT AND AC DUCTING ETC. HAS NOT BEEN INC LUDED. 8.11 THE ADDITION MADE ON ACCOUNT OF FURNITURE TO THE EXT ENT OF ONE CRORE BY THE ASSESSING OFFICER THOUGH ON FACTS HAS BEEN REDUC ED TO 51 LAKH BY THE CIT-A IT WAS SUBMITTED WAS AGAIN CONTRARY TO FACTS AND LAW. THE DEPARTMENT IT WAS SUBMITTED SHOULD BE CONFINED TO THE IN VENTORY OF FURNITURE AND FIXTURES MADE BY THE SEARCH TEAM AT THE TIME OF THE SEARCH WHICH HAS BEEN INCLUDED IN THE ASSESSMENT ORDER ITSELF. THU S THE OCCASION TO TRAVEL BEYOND THAT IT WAS SUBMITTED IS CONTR ARY TO ALL SETTLED LEGAL PRINCIPLES. ATTENTION WAS INVITED TO THE DVOS REPORT PLACED AT PAPER BOOK PAGE NO. 233 TO 243 ALONGWITH ANNEXURES TO. IT WAS HIS SUBMISSION THAT ONCE THE DEPARTMENT HAS CARRIED OUT TH E ULTIMATE WEAPON WHICH IT HAS THAT IS A SEARCH AND INTRUDED INTO T HE PRIVACY OF THE ASSESSEE BY MAKING A VIDEO RECORDING INVENTORISING THE FURNITURES FIXTURES AND VALUABLE ETC. TAKEN MULTIPLE PHOTOGRAPHS APPE NDED THE SEIZED DOCUMENTS IN THE ASSESSMENT ORDER ITSELF IN THESE CIRCUMSTANCES IT WAS SUBMITTED THE OCCASION THEN TO TRAVEL BEYOND THE SEIZED MATERIAL AND THE VALUATION REPORT AVAILABLE ON RECORD WHICH HAS BE EN SOUGHT BY THE REVENUE ITSELF SHOULD NOT BE PERMITTED. IT WAS HIS SU BMISSION THAT SEARCH IS THE BIGGEST WEAPON WHICH THE DEPARTMENT HAS . APART FROM THIS DEPARTMENT CAN ISSUE SUMMONS UNDER SECTION 131; SEEK INFORMATION ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 33 OF 57 UNDER SECTION 133 (6) CARRY OUT SURVEY AND ULTIMATELY CA RRY OUT A SEARCH AND SEIZURE OPERATIONS WHICH HAS BEEN DONE. IN THESE CIR CUMSTANCES THE DEPARTMENT OUGHT NOT TO BE ALLOWED TO DEVIATE FROM THE INVENTORY PREPARED AND QUOTED IN THE ASSESSMENT ORDER ITSELF AND THE VALUATION EXPERTS REPORT AVAILABLE ON RECORD SIMPLY BECAUSE IT IS IN CONFORMITY WITH THE CLAIM OF THE ASSESSEE. 9. THE LD. CIT-DR IN REPLY TO THE ARGUMENTS ADVANCED IN ASSESSEES APPEAL AND IN SUPPORT OF THE GROUNDS RAISED IN THE DEPAR TMENTAL APPEAL INVITED ATTENTION TO THE ASSESSMENT ORDER AND SUBMITTED THAT THE CONSTRUCTION HAS BEEN CARRIED OUT BY THE ASSESSEE WITH THE HELP OF SHRI. HARPAL SINGH OF M/S SP CONSTRUCTION. THE DVOS REPORT A LONGWITH FORWARDING LETTER DT. 01/12/2011 AT PAGE 233 OF THE ASSE SSEES PAPER BOOK IT WAS SUBMITTED FOR THE REASONS SET OUT IN THE OR DERS WAS FOUND TO BE NOT RELIABLE. CARRY US THROUGH THE SAME IT WAS SUBMITT ED THAT THE FACTS AS SET OUT IN THE ORDER BY THE ASSESSING OFFICER NE CESSITATED THAT THE COST OF CONSTRUCTION HAD TO BE ESTIMATED BY THE AO AS THE ASSESSEE HAD NOT MAINTAINED RECORD AND THE DVO HAD ONLY VERIFIED THE CLAIM OF ASSESSEES FUND FLOW STATEMENT OVER THE YEARS FOR THE C ONSTRUCTION OF THE HOUSE. THE DVOS REPORT WAS ACCORDINGLY UNRELIABLE. THE D VOS REPORT IT WAS REITERATED WAS MADE IN THE LIGHT OF THE FUND FLOW STAT EMENT OF THE ASSESSEE PLACED BEFORE THE ASSESSING OFFICER WHO MADE IT A VAILABLE TO THE DVO AS A RESULT OF THIS THE DVO PROCEEDED TO CONSIDER THE CLAIM OF THE ASSESSEE IN REGARD TO THE FUND FLOW MADE AVAILABLE AND THU S ON ACCOUNT OF THIS FACT AN ERROR HAD OCCURRED IN THE DVOS REPORT. THE ASSESSEE IT WAS SUBMITTED HAD BEEN CONFRONTED WITH THIS FACT THE REP LY OF THE ASSESSEE HAS ALSO BEEN CONSIDERED AND THE REASONS ARE SET OUT IN PARA 11 OF THE ASSESSMENT ORDER WHICH SUCCINCTLY AND COMPLETELY ADDRESS THE ISSUES. IT WAS SUBMITTED THAT THE REVENUE IS HEAVILY RELYING UPON IT. 9.1 IT WAS ALSO HIS SUBMISSION THAT NO DOUBT AN INVENTOR Y HAS BEEN PREPARED BY THE SEARCH TEAM HOWEVER THE FACT THAT TH ESE WERE PAINTINGS AND MURALS WHICH HAVE BEEN IGNORED IN THE INVENTORY AS W OULD BE EVIDENT FROM THE PHOTOGRAPHS OF THE SAID PREMISES INCLUDED AS PART O F THE ASSESSMENT ORDER ITSELF ON ACCOUNT OF THIS FACT THAT THE CIT(A) WAS NOT JUSTIFIED TO GRANT RELIEF IN AN ADHOC MANNER. IN THE FACTS O F THE SCANNED DOCUMENTS SEIZED IN THE SEARCH WHICH HAVE BEEN INCLUDED IN THE ASSESSMENT ORDER ITSELF IT WAS HIS SUBMISSION THAT THE ASS ESSING OFFICER ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 34 OF 57 WAS JUSTIFIED TO MAKE THE ADDITIONS. THE ESTIMATE OF THE CIT-A IN THE FACTS OF THE PRESENT CASE IT WAS SUBMITTED IS ASSAILED BY THE R EVENUE. IT WAS SUBMITTED THAT NO BASIS FOR AD HOC RELIEF TO THE ASSESSEE WHICH IS CHALLENGED BY THE REVENUE HAS BEEN GIVEN. 9.2 REFERRING TO THE ORDER IT WAS SUBMITTED THAT FUNDAMEN TALLY AND PRINCIPALLY THE CIT(A) HAS UPHELD THE REASONING AND THE CO NCLUSION OF THE AO ON WHICH HEAVY RELIANCE WAS BEING PLACED BY THE REVEN UE NAMELY THAT THE ASSESSEE WAS REQUIRED TO JUSTIFY THE EXPENDIT URE EVEN THOUGH IT WAS NOT A BUSINESS EXPENDITURE BEING CLAIMED AND THE FACT THAT ITS EXPLANATION WAS NOT ACCEPTABLE HAS ALSO BEEN UPHELD; THE FACT THAT THE DVOS REPORT WAS NOT RELIABLE ARE ISSUES WHICH HAVE BEE N HELD IN FAVOUR OF THE ASSESSING OFFICER BY THE CIT(A) HIMSELF. IN THESE CIRCUM STANCES THE CIT-A IT WAS SUBMITTED WAS NOT JUSTIFIED TO GRANT RELIEF TO THE ASSESSEE WHICH IS UNDER CHALLENGE IN THE PRESENT PROCEEDINGS. 10. THE LD. AR IN REPLY SUBMITTED THAT THE RATIO OF THE COST OF CONSTRUCTION IN THE RESPECTIVE YEARS HAS BEEN MAINTAINED BY THE DVO AS WELL AS THE ASSESSING OFFICER 21% IN 2004-05 ASSESSMENT YE AR, 28% IN 2005-06 ASSESSMENT YEAR, 27% IN 2006-07 ASSESSMENT YE AR, 22% IN 2007-08 ASSESSMENT YEAR AND 2% IN 2008-09 ASSESSMENT YEAR. THUS IT THEREBY SUGGESTS THAT THE MAJOR EXPENDITURE WAS INCUR RED IN THE INITIAL YEARS AS COMPARED TO THE SUBSEQUENT YEARS. THE ADDITI ONS IT WAS SUBMITTED HAVE BEEN MADE PURELY ON THE BASIS OF SUSPICIO NS AND TO JUSTIFY THE SEARCH AS THERE IS NOTHING ON RECORD ON TH E BASIS OF WHICH THE ADDITIONS HAVE BEEN RESORTED TO DESPITE PART RELIEF GRANTED BY THE C IT-(A). 11. IT WAS A COMMON STAND OF THE PARTIES THAT THE SUBM ISSIONS ADVANCED IN 2005-06 AY WOULD ADDRESS THE REMAINING APPE ALS ALSO AS THE BASIS OF THE ADDITION IN THE RESPECTIVE YEARS REMAINS THE SAME ON ACCOUNT OF WHICH FACT A COMMON ORDER HAS BEEN PASSED B Y THE CIT(A). ACCORDINGLY THE SUBMISSIONS ADVANCED IN 2005-06 IT WAS S UMMED UP BY THE PARTIES EXCEPT GROUND NO. 13 IN 2007-08 AY AGITATED BY THE ASSESSEE WHICH WOULD BE SEPARATELY ARGUED THE REMAINING ISSUES IN THE APPEALS WOULD REMAIN THE SAME. 12. WE HAVE HEARD THE SUBMISSION OF THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE RIVA L STAND OF THE PARTIES BEFORE THE BENCH AND CONSIDERING THE GROUNDS RA ISED BY THE ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 35 OF 57 PARTIES IN THEIR RESPECTIVE APPEALS WE ARE OF THE VIEW THA T FOR THE SAKE OF CLARITY IT WOULD BE APPROPRIATE TO FIRST BRIEFLY RE-CAPITULATE THE ADMITTED FACTS ON RECORD. THESE UNDISPUTED FACTS ON RECORD ARE T HAT THE ASSESSEES PREMISES WERE SUBJECTED TO SEARCH ON 24/07/09 ALONGWIT H TALWAR GROUP OF CASES. IT IS AN ADMITTED FACT THAT DURING THIS SEARCH A VIDEO RECORDING OF THE SPECIFIC HOUSE NO. 346, SECTOR 9 D, CHANDIGARH WAS M ADE. IN THE PRESENT GROUP OF APPEALS THE COST OF CONSTRUCTION IN THE RESPECTIVE YEARS OF THIS SPECIFIC HOUSE IS A SUBJECT MATTER OF CONSIDERATION. THE SAID PREMISES WERE ALSO PHOTOGRAPHED AND SOME OF THE PHOTOG RAPHS FORM PART OF THE ASSESSMENT ORDER. IT IS ALSO AN ADMITTED FACT THAT DURING THE SEARCH AN INVENTORY OF THE ITEMS FOUND ON THE PREMISES ON THE DAT E OF THE SEARCH WAS ALSO MADE BY THE TAX AUTHORITIES WHICH ALSO FO RMS PART OF THE ASSESSMENT ORDER. THE SAID INVENTORY WAS ALSO A SUBJEC T MATTER OF ISSUANCE OF SHOW CAUSE NOTICE TO THE ASSESSEE. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEES CLAIM OF COST OF CONSTRUCTION SHOWN SPREAD OVER IN 5 YEARS TOTALING RS. 2,23,92,375/- IN THE FOLLOWING MANNERS WAS CONSIDE RED TO BE VERY LOW BY THE ASSESSING OFFICER: F. Y. AMOUNT OF INVESTMENT 2004-05 RS. 47,80,000/- 2005-06 RS. 63,20,500/- 2006-07 RS. 60,32,750/- 2007-08 RS. 49,43,450/- 2008-09 RS. 3,15,675/- TOTAL RS. 2,23,92,375/- 12.1 IT IS A MATTER OF RECORD THAT THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS MADE A REFERENCE UNDER SEC TION 142 A TO THE VALUATION CELL FOR WORKING OUT THE COST OF CONSTRUCTION OF THE SAID HOUSE. IT IS ALSO AN ADMITTED FACT THAT THE DVOS REPORT WAS M ADE AVAILABLE TO THE ASSESSING OFFICER WHEREIN THE COST OF CONSTRUCTION SP READ OVER THE 5 YEARS WAS WORKED OUT AT RS. 2,41,42, 000/- IN THE FOLLOWIN G MANNERS. SAME IS ALSO REPRODUCED AGAIN FOR READY REFERENCE: 5.2.2 THE ESTIMATION BY THE DVO AT RS. 2,41,42,000/ - SPREAD OVER FIVE YEARS IS AS UNDER:- A.Y. AMOUNT OF INVESTMENT (RS.) 2005-06 52,27,174/- 2006-07 69,11,790/- 2007-08 65,97,121/- 2008-09 54,05,915/- ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 36 OF 57 2009-10 TOTAL 2,41,42,000/- 12.2 THE ASSESSEE HAS CONSISTENTLY CLAIMED THAT THE RAT IO OF EXPENDITURE OVER THE 5 ASSESSMENT YEARS AS CLAIMED BY THE ASSESSE E HAS BEEN ACCEPTED BY THE DVO AS WELL AS THE ASSESSING OFFICER HOWE VER THE EXTENT OF THE EXPENDITURE IN THE RESPECTIVE YEARS IS DISPUTED. TH E SAID SUBMISSION WE NOTE FROM THE PERCENTAGE OF EXPENDITURE IN CURRED AS CALCULATED BY THE AO IS MORE OR LESS CORRECT AND WE NOT E THAT CONSEQUENTLY IT HAS NOT BEEN REBUTTED BY THE DEPARTM ENT IN THE PRESENT PROCEEDINGS. THE ISSUES WHICH THUS REMAIN FOR CONSIDERATION IS THE EXTENT OF EXPENDITURE INCURRED BY THE ASSESSEE FOR CONS TRUCTION OF THE HOUSE IN THE RESPECTIVE YEARS. IT IS ALSO A MATTER OF RE CORD THAT CERTAIN DOCUMENTS WAS SIEZED FROM MR. HITESH BEDI STATED TO BE R ELATABLE TO THE CONSTRUCTION OF THIS HOUSE WHICH ACCORDING TO THE REVENU E HAD NOT BEEN ACCOUNTED FOR AS OPPOSED TO ASSESSEES CLAIM THAT THEY STOOD INCLUDED IN ASSESSEES COST OF CONSTRUCTION. IT IS ALSO A MATTER OF RECORD THAT CERTAIN DOCUMENTS IN THE NAME OF THE ASSESSEES WIFE SMT. NINA TA LWAR WAS ALSO FOUND FROM THE PREMISES OF THE ASSESSEE AND IN REGARD TO THEM ALSO THE STAND OF THE REVENUE HAS BEEN THAT THEY WERE NOT INCLU DED IN THE COST OF CONSTRUCTION SHOWN AND THE STAND OF THE ASSESSEE HAS BEEN THAT THESE ARE INCLUDED. 12.3 IT IS ALSO AN ADMITTED FACT THAT THE DVO AS PER HIS REPORT STATED THAT THE COST OF CONSTRUCTION DID NOT INCLUDE THE COST O F FURNITURE, FIXTURES, LINEN, AIR CONDITIONERS, A/C DUCTING, WATER PUMPS; LIFT ; GENERATORS SET ETC. THE ASSESSEE AS PER ITS CLAIM STAT ES THAT THESE ITEMS HAVE BEEN INCLUDED TO THE EXTENT NECESSARY IN IT ITS COS T OF CONSTRUCTION AS SOME OF THESE HAVE BEEN CARRIED FROM THE OLD PREMISES . IT IS A MATTER OF RECORD THAT THE DVOS REPORT WAS NOT ACCEPTED BY THE ASSESSING OFFICER ON THE REASONING THAT THE VALUATION REPORT HAS BEEN PR EPARED FROM THE EXPENDITURE FLOW STATEMENT GIVEN BY THE ASSESSEE. THE SA ID REASONING HAS BEEN DISPUTED BY THE ASSESSEE ON THE GROUNDS THA T THE REFERENCE HAD BEEN MADE FOR ESTIMATING THE COST OF CONSTRUCTION AS OTH ERWISE IT WOULD HAVE NO RELEVANCE. 12.4 ADDRESSING THE FORWARDING LETTER OF DVO IT HAS BEEN T HE SUBMISSIONS OF THE ASSESSEE THAT IT CLEARLY MENTIONED THA T THE REPORT ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 37 OF 57 WAS FOR COST OF CONSTRUCTION AND IF IT WAS CONSIDERED TO BE NOT ACCURATE THEN THE DVO HAD SUGGESTED THAT IT COULD BE REFERRED BACK. THE RELEVANT EXTRACT FORM THE FORWARDING LETTER OF THE DVO HEAVILY RELIE D UPON BY THE ASSESSEE IS REPRODUCED HEREUNDER: ' THE VALUATION REPORT HAS BEEN PREPARED FORM THE EXP ENDITURE FLOW STATEMENT GIVEN BY THE ASSESSEE, WHICH IS REQUIRED TO BE VERIFIED A T YOUR END . IN CASE, ANY MAJOR VARIATION IS FOUND IN THE EXPENDITURE FLOW STATEMEN T AS GIVEN IN ANNEXURE-IV OF THE REPORT IN ANY PARTICULAR YEAR IN YOUR OFFICE OR INT IMATED SUBSEQUENTLY BY THE ASSESSEE, THIS VALUATION WORKED OUT BY THIS OFFICE IS LIABLE TO CHANGE. HENCE THE REPORT SHOULD BE REFERRED BACK TO THIS OFFICE FOR R ECALCULATING THE VALUATION AMOUNT, IF REQUIRED. (EMPHASIS PROVIDED) 12.5 IT IS ALSO A MATTER OF RECORD THAT THE ASSESSING OFFIC ER HAS NOT ACCEPTED THE ASSESSEES CLAIM THAT THERE WAS AN OLD ST RUCTURE WHICH WAS DEMOLISHED AND THE SALVAGE WAS USED. THE CIT-A APPEALS IT IS NOTICED HAS TAKEN NOTE OF THIS ARGUMENT MADE BEFORE HER AS WELL AS BEFORE THE ASSESSING OFFICER ALSO AS THE STATEMENT OF MR HARPAL SINGH OF M/S SP CONSTRUCTION HAS BEEN REPRODUCED IN THE ORDER WHICH SH OWS THAT IN THE STATEMENT RECORDED OVER THE MONTHS HE HAS ACCEPTED THE FACT THAT CONSTRUCTION WAS CARRIED OUT ON THE SITE WHERE THERE W AS AN OLD CONSTRUCTION WHICH WAS STATED TO BE PARTLY DEMOLISHED AS BOU NDARY WALLS AND GATE ETC. WERE RETAINED AND REPAIRED THE SALVAGE WA S USED IN THE CONSTRUCTION. THE STATEMENT WHICH WAS ALSO SUPPORTED BY THE AFFIDAVIT OF THE ASSESSEE ALREADY ON RECORD. HOWEVER THE CIT-A DOE S NOT ACCEPT THE ASSESSEES VERSION THOUGH THE EXPLANATION IS TAKEN NOTE OF ON THE GROUNDS THAT THE RELEVANT CLAIM COULD NOT BE SUPPORTED BY ANY EVIDENCE. THE STATEMENTS OF MR. HARPAL SINGH HAVE BEEN CONSIDERED BY THE ASSESSING OFFICER AS EVASIVE AND THE CIT-A ALSO DOES NOT GIVE MUCH CREDENCE TO THOSE STATEMENTS. IT IS NOTICED THAT APART FROM THIS OBSERVATION IN THE ORDERS THESE STATEMENTS AVAILABLE ON RECORD WHICH HAVE ALSO BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDE R HAVE NOT BEEN REBUTTED BY THE REVENUE BY ANY CONCRETE EVIDENCE. 12.6 ON A PERUSAL OF THE SAME WE NOTE THAT THE STATEME NTS AVAILABLE IN THE ASSESSMENT ORDER SUPPORTS THE CONSISTENT STAND OF THE ASSESSEE. THE ASSESSEE HAS CONSISTENTLY STATED THAT DETAILS HAVE NO T BEEN RETAINED AS IT WAS NOT A BUSINESS EXPENDITURE BEING CLAIMED. MR. HARPAL S INGH STATES THAT HE WAS HANDLING THE IMPREST ACCOUNT OF THE ASSESS EE AND ALL PAYMENTS WERE MADE THROUGH HIM AND THE BILLS ETC. HAVE B EEN HANDED ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 38 OF 57 BACK TO THE ASSESSEE ONCE THE ACCOUNTS WERE FINALLY SE TTLED THUS WE ARE UNABLE TO UNDERSTAND HOW CAN THE SAID STATEMENT OF FACT S BE CALLED TO BE EVASIVE. AT BEST IT CAN BE SAID THAT THE PERSON DOES NO T KNOW IT IS SEEN THAT MR. BEDI AS PER RECORD CLEARLY ACCEPTS THAT SOME OF THE DOCUMENTS PERTAIN TO THE FIRM AS WOULD BE EVIDENT FROM THE FOLLOWING ST ATEMENT EXTRACTED IN THE ASSESSMENT ORDER ITSELF: IN REGARD TO THE QUERIES AT S. NO. 6 THESE PAYMENT RELATES TO PURCHASE OF TWO FRIDGES FOR THE BUSINESS PURPOSES OF THE FIRM M/S T ALWAR SON JEWELLERS. THE BILL HAS BEEN RAISED IN MY NAME BECAUSE GENERALLY I CARR Y OUT OUT DOOR DUTIES OF THE FIRM. THE CASH PAYMENT AMOUNTING TO RS. 55,0007- (F IFTY FIVE THOUSAND) MAY B GOT VERIFIED FROM THE BOOKS OF ACCOUNTS OF THE FIRM . 12.7 APART FROM THAT THE DOCUMENTS SEIZED FROM MR. BEDI N OTED IN THE ASSESSMENT ORDER AS PER NARRATIONS OF THE AO IN SOME H AVE BEEN DESCRIBED AS ROUGH WORKS, ROUGH WORK IN PENCIL ETC . ARE DOCUMENTS WHICH IT IS STATED COULD BE EXPLAINED BY THE ASSESSEE AS MR. BEDI IS ENTRUSTED ONLY WITH OUT DOOR DUTIES. THE DOCUMENTS HAVE BEEN SIEZED THE ASSESSEE HAS BEEN REQUIRED TO EXPLAIN. THE EXPLANATIO N THAT THESE ARE INCLUDED IN THE COST OF CONSTRUCTION HAVE NOT BEEN ACCEP TED. HOWEVER THE LACK OF KNOWLEDGE OF MR. BEDI CANNOT BE TERMED TO BE EVA SIVE AS AT BEST HE IS IGNORANT. 12.8 THE ISSUES WHICH FALLS FOR CONSIDERATION IN THE CIRCUMST ANCES IS CAN THE LACK OF KNOWLEDGE BY THE PERSONS HANDLING IMPREST ACCOUNT AND CARRYING OUT OUTDOOR DUTIES FOR THE FIRM BE MADE THE BAS IS OF DOUBTING THE ASSESSEES EXPLANATION. WE NOTE THAT IT IS ALSO A MAT TER OF RECORD THAT THE DVO WHOSE REPORT IS AVAILABLE AT PAGE 233 TO 243 OF THE PAPER BOOK HAS PREPARED THE SAME AFTER CARRYING OUT INSPECTIONS O N 15/10/2011 AND 19/10/2011 WHEN MEASUREMENTS OF THE SPECIFIC HOUSE PROPERTY ETC. HAVE BEEN TAKEN. HE HAS CATEGORIZED THE QUALITY OF FLOOR TYPES AND CALCULATED THE ACTUAL FLOOR AREA OF DIFFERENT TYPES OF FLOORS AS TILED, WOODEN TILES; MARBLE ETC. CEILING HEIGHTS ON DIFFERENT FLOORS AR E MEASURED AND GIVEN WHICH IS A MATTER OF RECORD AS WOULD BE EVIDENT FROM PAPERS 237-238 WHICH IS ANNEXURE II OF THE DVOS REPORT AND ANNEXURE III ALSO OF THE DVO REPORT PAGES 241 TO 242 FURTHER SHOWS THAT THE REPORT IS BASED ON ACTUAL SITE VISITS AND CONTEMPORARY DATA. DISCUS SION IN THE ASSESSMENT ORDER ITSELF ADDRESSES THE FACT THAT THIS S PECIFIC HOUSE WAS SPREAD OVER AN AREA OF 3067 SQUARE YARD (6 KANALS). IT IS ALSO AN ADMITTED FACT THAT THE HOUSE IS A THREE AND HALF STORY IN CLUDING BASEMENT ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 39 OF 57 HAVING A COVERED AREA OF 21,500 SQUARE FEET WHICH FACT T HOUGH CORROBORATED BY THE DVOS REPORT IS NOT IN DISPUTE. THE FACT THAT IT HAD A TOTAL NUMBER OF 26 ROOMS AS NOTED BY THE DVO AND 9 BE DROOMS AS ARGUED BY THE ASSESSEE IS A MATTER OF SEMANTICS AS TH ERE ARE OBSERVATION THAT EACH BED ROOM HAD A BATHROOM ATTACHED AND THER E WERE 2 KITCHEN LIVING ROOMS ETC. THE FACT THAT TOTAL COVERED AREA WAS 21 ,500 SQ. FEET IS NOT IN DISPUTE. THE FACT THAT IT HAS BEEN MEASURED BY T HE DVO IS EVIDENT FROM RECORD WHEREIN THE CATEGORY OF AREA HAS BEEN DESC RIBED AND RATES APPLIED TO THE QUALITY OF FLOORING, CEILING ETC. BY THE DVO IS A MATTER OF RECORD. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE IS NOT MAINTAINING ANY RECORD OF THIS CONSTRUCTION AS CONSTRUCTION OF HOUSE S ETC. WAS NOT THE BUSINESS OF THE ASSESSEE. THERE IS ALSO NO DISPUTE T HAT THERE WAS NO REQUIREMENT FOR THE ASSESSEE UNDER THE LAW TO MAINTAIN A CCOUNTS OF THE CONSTRUCTION. THE ASSESSEE HAS GIVEN HIS VERSION OF EXPE NDITURE IN THE RESPECTIVE YEARS WHICH HAS BEEN EXPLAINED TO THE DVO ALS O AND ON CROSS VERIFICATION HIS VERSION OF FACTS HAS NOT BEEN UPSET BY TH E STATEMENTS OF MR HARPAL SINGH AND MR HITESH BEDI RELIED UPON BY THE REV ENUE. THE DVOS REPORT SOUGHT BY THE ASSESSEE IS AVAILABLE ON REC ORD. IT IS ALSO A MATTER OF RECORD THAT THE ASSESSING OFFICER WAS NOT AN E XPERT FOR ESTIMATING THE COST OF CONSTRUCTION FOR WHICH PURPOSES HE HAD MADE A REFERENCE TO THE DVO. THE CONCLUSION THAT THE AO WAS NO T AN EXPERT AT VALUATION OF PROPERTIES (IF REQUIRED TO BE DEMONSTRATED) IS E VIDENT FROM THIS FACT ITSELF AS HAD HE BEEN PERSONALLY QUALIFIED TO ESTIMA TE THE COST OF CONSTRUCTION THERE WOULD HAVE BEEN NO NEED FOR HIM TO R EFER THE ISSUE FOR VALUATION TO THE DVO FOR ESTIMATING THE COST OF CONSTRUC TION. EVEN OTHERWISE WE NOTE NO SUCH CLAIM HAS BEEN MADE BY THE R EVENUE ALSO. IT IS ALSO A MATTER OF RECORD THAT THE VALUATION OFFICERS REP ORT WAS NOT UPSET EITHER BY THE ASSESSING OFFICER OR BY THE CIT-A BY A MA KING A REFERENCE TO ANOTHER VALUATION EXPERT OR REVERTING BACK TO THE SAME DVO. IT IS ALSO A MATTER OF RECORD THAT THE ASSESSING OFFICER HAS NOT CARR IED OUT ANY EFFORT TO WORK OUT THE MARKET VALUE OF THE COST OF CONSTRUCTIO N AS THERE IS NO SUCH DISCUSSION IN THE ORDERS. IT IS SEEN THAT IN PARA 5 .13 OF THE IMPUGNED ORDER THE CIT(A) MAKES A REFERENCE TO GHAR EX PERT WEBSITE REFERRED TO IN THE TRIBUNE MARCH 2011 AS A REFERENCE US ED HOWEVER RELIANCE THEREON IS MISPLACED AS THE PERIOD REFERRED TO TH EREIN IS 2011 WHEREAS IN THE FACTS OF THE PRESENT CASE THE COST OF CO NSTRUCTION IN F.Y. 2004-05 AND F.Y. 2008-09 WAS BEING CONSIDERED HENCE EVE N IF THE SAID ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 40 OF 57 REFERENCE WAS USED IT IS INAPPROPRIATE AND INCORRECT. THE ASSESSEE HAS REFERRED TO FACTS AS AVAILABLE WITH HIM AT THE RELEVANT POIN T OF TIME AND HAS NOT MADE ANY REFERENCE TO ANY MATERIAL SO AS TO S UGGEST WHAT WAS THE MARKET RATE OF COST OF CONSTRUCTION OF THE TYPE CAT EGORY OF HOUSE CONSTRUCTED AT THE RELEVANT POINT OF TIME. THE AO IN THE ABSENCE OF RELIABLE DETAILS MADE A REFERENCE TO THE DVO. THUS THE ISSU E FOR CONSIDERATION FOR THE AO WAS WHETHER THE CLAIM PUT FORTH BY THE ASSESSEE THAT THE CONSTRUCTION IN THE SPECIFIC PERIOD WAS AS PER T HE ASSESSEES CLAIM WAS CORRECT OR NOT WHICH WAS TO BE ADDRESSED. FOR THE SAID PURPOSE THE AO MADE A REFERENCE TO THE DVO. HIS REPORT IS AVAILAB LE. A PERUSAL OF THE SAME SHOWS THAT QUALITY OF CONSTRUCTION HAS BEEN CA TEGORIZED THE ACTUAL AREAS OF THE DIFFERENT TYPES OF FLOOR, CEILING ETC. HAVE BEEN CATEGORIZED AND MEASURED; THE RATES APPLICABLE TO THE DIFFE RENT CATEGORIES OF FLOORING, SURFACES ETC. HAVE BEEN GIVEN. THE CORRECTNESS OF THESE CALCULATIONS EITHER AREA WISE, QUALITY DESCRIPTION WISE OR FOR THAT MATTER RATE WISE HAS NOT BEEN UPSET EITHER BY THE AO OR THE CIT(A) AND NEITHER BY CIT DR BY ANY EVIDENCE. THE ASSESSING OFFICER IN THE FA CTS OF THE PRESENT CASE HAS ADMITTEDLY PROCEEDED TO PROPOSE AN D MAKE THE ADDITIONS PERSUADED AND POSSIBLY OVERWHELMED BY THE VIDE O RECORDING/ PHOTOGRAPHY ETC DEHORSE THE VALUATION OFFICERS REPORT WITHOUT CARING TO EITHER UPSET THE MEASUREMENTS / QUALITIES OF FLOORING-TILED, G LAZED TILES, MARBLE, WOODEN TILES ETC. OR CEILING QUALITY OR HEIGHT OR CAT EGORY OF CONSTRUCTION / FLOORING ETC. THERE IS NO REFERENCE TO ANY CONTEMPORARY DATA OR INFORMATION AS EVIDENCE IN SUPPORT OF THE CONCLUSI ON THAT THE RATES APPLIED BY THE DVO WERE INCORRECT. IN THE SAID BA CKGROUND HAVING DULY NOTED ON THE BASIS OF RECORD AVAILABLE WHICH WE HAVE REFERRED TO AND CONSIDERED IF THE CONCLUSIONS / DECISION THAT THE DVOS RE PORT WAS NOT FOR ONLY CONSIDER THE EXPENDITURE OF ASSESSEE BUT WAS FO R WORKING OUT THE ESTIMATE OF COST OF CONSTRUCTION OF THE SAID PREMISES STILL NEEDS TO BE FURTHER SUPPORTED WE EXTRACT HEREUNDER THE RELEVANT E XTRACTS FROM THE DIRECTIONS ISSUED BY THE ASSESSING OFFICER ON 21/09/2011 T O THE DVO TO CARRY OUT THE EXERCISE FOR A SPECIFIC PURPOSE SPELLED OUT IN UNEQUIVOCAL TERMS UNDER SECTION 142A FOR DETERMINING THE INVESTMENT MADE IN THE CONSTRUCTION OF THE RESIDENTIAL H.NO. 346, SECTOR 9D CHANDIG ARH. THE RELEVANT DOCUMENT IS AVAILABLE AT PAPER BOOK PAGE NO. 14 1 AND IS REPRODUCED HEREUNDER : ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 41 OF 57 12.9 A PERUSLA OF ANNEXURE I OF THE DVOS REPORTS ALSO BRINGS OUT THE FACT THAT THE DVO IN TERMS OF THE AOS DIRECTIONS HAS MA DE A REPORT FOR ESTIMATING THE COST OF CONSTRUCTION AS ARLEADY SET OUT IN PARA 1.3 OF THE REPORT EXTRACED HEREINAFTER AND PARA 3.2 ALSO OF AN NEXURE I OF THE DVOS REPORT (COPY AVAILABLE AT PAPER BOOK PAGE 236) BR INGS OUT THE SPECIFIC DATES OF THE SITE VISITS AND PARA 2.3 ALSO OF THE SA ID ANNEXURE BRINGS OUT THE FACT THAT THE SITE PLAN AND AFFIDAVIT OF THE ASSESSEE WERE AVAILABLE. THESE EXTRACTS ARE REPRODUCED HEREUNDER: ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 42 OF 57 12.10 THE ANNEUXRE II TO THE DVOS REPORT EXTRACTED HEREINAFTER FURTHER CLEARLY BRINGS OUT ADDRESSED THE FACT THAT THE REPORT WAS PREPARED AFTER ACTUAL MEASUREMENT WERE TAKEN ON SITE INSPECTIONS. FOR READY REFERENCE THE RELEVANT EXTRACT OF ANNEXURE II OF THE DVOS REPO RT IS REPRODUCED HEREUNDER( COPY AVAILABLE AT ASSESSEES PAPER BOOK PAGE 237 & 238 ): CONTINUED ON PAGE 43 ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 43 OF 57 CONTINUED ON PAGE 44 ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 44 OF 57 12.11 IT WOULD NOT BE OUT OF PLACE TO ALSO EXTRACT ANNEXURE III OF THE DVO REPORT WHICH SHOWS THAT ON THE BASIS OF SITE VISITS; THE ACTUAL WORKING; AND REASONS FOR CLASSIFICATION ARE ALREADY SET OUT BY THE DVO IN HIS REPORT. CONTINUED ON PAGE 45 ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 45 OF 57 CONTINUED ON PAGE 46 ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 46 OF 57 12.12 THUS THE CONCLUSIONS OF THE AO AND THE CIT(A ) CONSQUENTLY THE CIT DR THAT THE REPORT WAS FOR A LIMITED PURPOSE AN D THE INFERENCES THAT CONSEQUENTLY IT WAS NOT RELIABLE IS NOT BORNE OUT F ROM THE RECORD. A PERUSAL OF THE ABOVE UNAMBIGUOUSLY DEMONSTRATES THAT SITE I NSPECTIONS WERE MADE, ACUTAL MEASURMENTS WERE TAKEN AND CLASSIFICATIONS O F THE TYPE OF FLOOR, WELL, CEILING, ETC. WERE DONE. RATES APPLIED, BASIS ETC WERE ALL GIVEN. THE ULTIMATE COST OF CONSTRUCTION MINUS THE ITEMS SPECIFICALLY M ENITONED IN THE COVERING LETTER WAS ESTIMATED AT RS. 2,41,42,000/-. THE BREA K UP FOR THE RESPECTIVE YEARS AS PER COPY AVAILABLE AT PAPER BOOK PAGE 243 EXTRACTED IS AS UNDER WHREIN THE ASSESSEES ESTIMATE IS ALSO GIVEN: ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 47 OF 57 12.13 THUS ON A READING OF THE ABOVE IT IS SEEN THAT CO NTRARY TO ASSESSEES CLAIM THE SAID REPORT DOES NOT SUPPORT THE ASSESSEES CLAIM IN REGARD TO THE COST OF CONSTRUCTION OF THE SAID PREMISES . THERE IS A DIFFERNCE IN EACH OF THE YEARS. SINCE THESE ALL ARE ESTIMATE S AND NOT ACTUAL THE FACT THAT THE TWO ESTIMATES ROUGHLY CO-INCIDE ALSO CANNOT BE OUTRIGHTLY RULED OUT. 12.14 IN THE SAID BACKGROUND WE ALSO DEEM IT APPROPRIAT E TO ADDRESS CERTAIN RELEVANT FACTS WHICH APPEAR TO HAVE BEE N IGNORED/ALTERNATELY NOT GIVEN ADEQUATE CREDENCE TO BY THE TAX AUTHORITIES FIRST AND FOREMOST OF WHICH BEING THE TAXPAYER HAS CONSIS TENTLY STATED THAT THE FURNITURE AND FITTINGS ETC FROM THE EARLIER RESIDEN CE OF THE ASSESSEE HAD ALSO BEEN INCLUDED IN THE NEW PREMISES. THE NEW PREMISES HAVE BEEN PHOTOGRAPHED AND VIDEO RECORDED . THE SAID A RGUMENT HAS OUT RIGHTLY BEEN DISCARDED BY THE ASSESSING OFFICER WITHOUT A SSIGNING ANY ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 48 OF 57 REASON WHATSOEVER . WE ARE OF THE VIEW THAT THE CLAIM PUT FORTH BY THE TAXPAYER IS NOT A FAR-FETCHED IMPOSSIBLE STAND EVEN IF THE PREMISES HAVE BEEN PHOTOGRAPHED AND VIDEO RECORDED. NO DOUBT THE PR EMISES APPEAR TO BE WELL FURNISHED HOWEVER THIS FACT ALONE CANNOT LEAD TO TH E CONCLUSION THAT THE EXPLANATION OFFERED DOES NOT HAVE ANY CREDENC E WHATSOEVER. IT IS NOT THE CASE OF THE TAX AUTHORITIES THAT THE TAXPAY ER WAS LIVING IN IMPOVERISHED CIRCUMSTANCES PRIOR TO THE CONSTRUCTION OF T HIS HOUSE AND ONLY ON ACCOUNT OF WINNING A JACKPOT/A LOTTERY ETC THE CIRCUMSTANCES OF THE TAXPAYER HAVE CHANGED DRAMATICALLY. THE FACT THAT S UCH A SUBMISSION WAS ADVANCED IS EVIDENT FROM THE FOLLOWING DISCUSSION IN TH E ASSESSMENT ORDER ITSELF EXTRACTED FROM UNNUMBERED PAGE 13 OF THE ASSESSMENT ORDER: E). THE CONTENTION OF THE ASSESSEE THAT THE ENTIRE OLD FURNITURE AND FIXTURE WAS GOT RENOVATED / REPAIRED BY USING THE SCRAP MATERIAL LE FT OUT OF CONSTRUCTION IS NOT CORRECT. ALL THE OLD FURNITURE AND FIXTURES WERE LEFT AT H. NO. 149, SECTOR-8 CHANDIGARH WHERE THE ASSESSEE USED TO LIVE BEFORE SHIFTING TO H. NO. 346, SECTOR- 9, CHANDIGARH. ... ... O. IN ITS REPLY THE ASSESSEE EXPLAINED THAT NEW FUR NITURE AND FIXTURE ARE NOTHING BUT RENOVATION OF OLD FURNITURE AND FIXTURE. THIS IS NO T TRUE. THE OLD FURNITURE AND FIXTURES WERE LEFT IN THE OLF 4 HOUSE AND ALL THE FURNITURE AND FIXTURES WERE BROU GHT NEW. THE ASSESSEE HAS SURRENDERED U/S 132{4) OF THE I.T. ACT 1961 A S UM OF RS 8,27.5731- FOR F.Y 2008-09 PERTAINING TO THE A.Y 2009-10 ON ACCOUNT OF INVESTM ENT IN FURNITURE AND FIXTURES. THIS IS HIGHLY INADEQUATE. THERE ARE MORE THAN 30 SOFA SETS , 30 CENTRE TABLES, 40 SIDE TABLES, 40-50 SIDE LAMPS, 20 CUPBOARDS ALL MADE OF TEAK WOOD AND HENCE UNDISCLOSED INVESTMENT OF MORE THAN ONE CRORE IS NOT RULED OUT. 12.15 WE FURTHER NOTE THAT THE TAX AUTHORITIES HAVE M ISDIRECTED THEMSELVES POSSIBLY AS A RESULT OF THE IMPACT OF THE OVER ALL FINISH OF THE RESIDENTIAL PREMISES WHICH MAY HAVE CREATED A SEMBLANCE O F AN OVERTLY LUXURIOUS AMBIENCE AS RECORDED IN THE PHOTOGRAPHS AND T HE VIDEO RECORDING. THIS CONCLUSION IS FURTHER FORTIFIED BY THE FACT THA T THE ASSESSING OFFICER HAS PRESUMED TO CONCLUDE AND MAKE EXOR BITANT ADDITIONS ON THE GROUNDS THAT THERE WERE VALUABLE ORIGINA L PAINTINGS/MURALS AS WELL AS FANCY GLASS AND CRYSTAL GLASSWAR E ETC OVER AND ABOVE THE INVENTORY PREPARED BY THE SEARCH TEAM . THERE IS NOTHING ON RECORD TO SUGGEST THAT INVENTORY LIST WAS INCOMPLETE . IN FACT THE LIST HAS BEEN THE BASIS OF ISSUANCE OF SHOW CAUSE NOTICE TO T HE ASSESSEE BY THE AO HIMSELF. THE FACT THAT THE SAID PREMISES HAD VALUABLE S OVER AND ABOVE THE INVENTORY ON RECORD WOULD TANTAMOUNT TO SUG GESTING THAT THERE WERE LAPSES BY THE SEARCH TEAM. WE NOTE THAT NO SUCH ARGUMEN TS MAKING ANY SUCH SUGGESTING HAVE BEEN ADVANCED BY THE REVENU E. THUS MERELY ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 49 OF 57 BASED ON INNUENDOES THE INVENTORY PREPARED CANNOT BE DISCARDED AS A MEANINGLESS SCRAP OF PAPER. IN THE CIRCUMSTANCES THE OC CASION TO GO BEYOND THE INVENTORY LIST ON RECORD DOES NOT ARISE. THE FACT THAT APART FROM THE INVENTORY NO VALUABLES WERE FOUND IS A MATTER O F RECORD. THE TAXPAYER HAS CONSISTENTLY ARGUED THAT THE PRESUMPTION OF THE AO THAT THERE WERE ORIGINAL PAINTINGS IS INCORRECT AND DEHORS FACT S AS THESE WERE PHOTOGRAPHS FRAMED AND NOT ORIGINAL PAINTINGS/MURALS. IN TH E ABSENCE OF ANY DISCUSSION IN THE INVENTORY RECORDED AT THE TIME OF THE SEARCH WE FIND THAT THE ASSESSING OFFICER HAS PROCEEDED ON CONJECTU RES AND SURMISES TO CONSIDER THEM AS VALUABLE PAINTINGS ETC. THE S AID ARBITRARY EXERCISE FLIES IN THE FACE OF THE STANDARD PROTOCOLS OF INV ENTORISING THE VALUABLES NOTICED ON THE DATE OF THE SEARCH. THE VERY PU RPOSE OF MAKING AN INVENTORY OF ITEMS AT THE TIME OF THE SEARCH WOULD BE DEFEATED IF IT IS TO BE ULTIMATELY IGNORED TO THE EXTENT THAT OVER AND A BOVE THE INVENTORY EXISTENCE OF VALUABLES CAN BE LAWFULLY ADDED. INVENTORY OF ITEMS AT THE TIME OF THE SEARCH IS TO ENSURE THAT ALL THE VALUABLE ITEM S AND FURNITURE ETC WHICH WERE REQUIRED TO BE EXPLAINED BY THE ASSESSEE SHOULD BE SUMMED UP AT THE FIRST INSTANCE ITSELF INSTEAD OF LEAVING A GREY AREA AND GIVING CAUSE TO CLAIMS AND COUNTER CLAIMS AS TO WHAT WA S FOUND AT THE TIME OF THE SEARCH. THE FACT THAT THE SEARCH TEAM DID NO T CARE TO INCLUDE THEM DEMONSTRATES THE FACT THAT EITHER THEY WERE NOT VALUABLE OR THAT THE ITEMS WERE BROUGHT OVER FROM THE EARLIER RESIDENCE AND H ENCE NOT REQUIRED TO BE INCLUDED IN THE INVENTORY. THE CORRECTNES S OF THE SAID DECISION OF THE SEARCH TEAM IS NOT UNDER CHALLENGE IN THE PRESENT PROCEEDINGS BE THAT AS IT MAY THE FACT THAT THE SEARCH TEAM DOES NOT RECORD ANY ORIGINAL PAINTINGS OR VALUABLES FOUND OVER AND ABOVE WH AT HAS BEEN REFERRED TO IN THE INVENTORY IS A MATTER OF RECORD AND CANNOT BE DISCARDED BY THE ASSESSING OFFICER OR THE TAX AUTHORITIES O R FOR THAT MATTER ANY JUDICIAL FORUM AT ITS WHIMS AND FANCIES PURELY BASED O N CONJECTURES AND SURMISES. 12.16 WE FURTHER TAKE NOTE OF THE FACT THAT THE TAX AU THORITIES HAVE NOT GIVEN ANY CREDENCE TO THE CLAIM OF THE EXISTENCE OF B OUNDARY WALL AND GATE WHICH WERE CLAIMED TO HAVE BEEN REPAIRED AND RETAIN ED CONSEQUENTLY THE AVAILABILITY AND THE REUSE OF THE SALVAG E OF THE DEMOLISHED EXISTING PREMISES WHICH HAS BEEN CLAIMED AS HAVIN G BEEN USED IN THE NEW CONSTRUCTION HAS NOT BEEN ACCEPTED. TH E ASSESSING ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 50 OF 57 OFFICER HAS REFUSED TO ACCEPT THIS CLAIM AND IN THE CHALLENGE POSED BEFORE THE CIT-A BENEFIT OF THIS CLAIM HAS BEEN DENIED TO THE AS SESSEE ON THE REASONING THAT THE EVIDENCE IN SUPPORT THEREOF COULD NOT BE FILED. IN THE FACTS OF THE PRESENT CASE IT NEEDS TO BE KEPT IN MIND TH AT AS PER LAW THE ASSESSEE WAS NOT REQUIRED TO MAINTAIN THE DETAILS OF THE EXPENDITURE INCURRED FOR THE CONSTRUCTION OF THE HOUSE AS IT WAS NOT A BUSINESS EXPENDITURE OF THE ASSESSEE WHICH WAS BEING CLAIMED HOWEV ER THIS ALSO DOES NOT MEAN THAT ANY AND EVERY CLAIM OF THE TAXPAYER PUT FORTH HAS TO BE NECESSARILY DISCARDED UNDER LAW ON THE GROUNDS THAT THE HIGHEST POSSIBLE ACCEPTABLE EVIDENCES ARE NOT AVAILABLE BECAUSE TH E FACT REMAINS THAT THE ASSESSEE WAS NOT REQUIRED TO RETAIN THE SAME . NO DOUBT THE ONUS IS UPON THE TAXPAYER IN THE PECULIAR FACTS OF THE PRESENT CASE TO EXPLAIN THE EXPENDITURE THE ASSESSEE AS PER RECORD HAS PUT FO RTH ITS CLAIM WHATEVER MAYBE ITS WORTH . THIS SPECIFIC CLAIM IS SUPPORTED BY AN AFFIDAVIT OF THE ASSESSEE AND EVEN IN THE STATEMENTS RECO RDED OF MR HARPAL SINGH OF M/S SP CONSTRUCTION AND MR. HITESH BEDI EM PLOYEE OF ASSESSEES FIRM WHICH HAVE BEEN EXTRACTED IN THE ASSESS MENT ORDER AND FORM PART OF THE PRESENT ORDER WE NOTE THAT THIS CLAIM HAS BEEN CONSISTENTLY SUPPORTED BY THESE TWO PERSONS ALSO. IN T HESE PECULIAR FACTS AND CIRCUMSTANCES THE SAID CLAIM CANNOT BE OUTRIGHTLY DISCARDED. 12.17 WE FURTHER NOTE THAT IN THE FACTS OF THE PRESENT CASE THE ASSESSING OFFICER HAS BEEN PERSUADED BY THE OVERWHELMING IMPACT OF THE PHOTOGRAPHS AND THE VIDEO RECORDING AND CONCLUDED THAT NECESSARILY THE COST WOULD BE MUCH HIGHER. AS AN ILLUSTRATION ALTHOUGH THE EXAMPLES ARE MANIFOLD THE FOLLOWING EXTRACT OF HIS VALUATION IS REPRODUCED HEREUND ER: FINISHING WORK INCLUDING ITALIAN MARBLE FLOORING, W OODEN FLOORING, FALSE CEILING WITH DESIGN & COVE LIGHTS , P.O.P ON WALLS & TEAK WOOD FANCY JAIL FOR LIGHTS, TEXTURE PAINTS, PLASTIC PAINTS, POLISH WORK, TEAK WOODEN JOINERY (CHOWKETS, DOORS, WINDOWS ETC). .TILES/GRANITES IN BATHROOMS AND KITCHEN, BATHROOM FITTING AND FIXTURES (FANCY), FANCY, CUP BOARDS, MODULAR KITCHEN, FANCY DESIGNS ON WALLS AND COLUMN S ETC. 21500 6000 12,90,00,000/- 12.18 HE HAS IGNORED THE FACT THAT THE DVO AS PER HIS REPORT HAS ACTUALLY MEASURED, INSPECTED THE PREMISES AND CARRIED O UT MEASUREMENT EVEN IN REGARD TO THE SPECIFIC CATEGORY OF FLOORING; WALL CEILIN G ETC IN TERMS OF THE QUALITY OF WORK AND ESTIMATED THE EXPENDITURE AS P ER HIS REPORT ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 51 OF 57 AVAILABLE ON RECORD FOR READY REFERENCE. BEFORE PROCEEDING TO ATTEMPT ADHOC ESTIMATE IT WAS INCUMBENT ON THE AO TO ASSAIL THE CORRECTNESS OF THE MEASUREMENTS, QUALITY / CATEGORY ETC. BY CARRYING OU T ACTUAL SITE VISITS WITH A TECHNICAL EXPERT ANNEXURE II AND III EXTRA CTED IN THE EARLIER PART OF THE ORDER DEMONSTRATES THE FACT THAT A DETAILED REPORT WAS MADE BY DVO AND THE CORRECTNESS OF THE REPORT REMAINS UNCH ALLENGED BY ANY FACT OR EVIDENCE ON RECORD. 12.19 SINCE THE CONCLUSION OF THE ASSESSING OFFICER IS NOT B ASED ON ANY ACTUAL INSPECTION OR PHYSICAL INSPECTION OF THE PREMISES CONFRONTED TO THE ASSESSEE AS OPPOSED TO THE REPORT OF THE DVO ON RECORD WHICH IS BASED ON SITE VISITS WHEREIN THE ACTUAL QUALITY OF CONSTRU CTION IN REGARD TO ITS CATEGORIZATION AND DESCRIPTION AND AREA MEASUREME NTS ETC WHICH WE NOTE HAS NOT BEEN REBUTTED BY THE ASSESSING OFFICER OR BY THE CIT-A WE ARE UNABLE TO PERSUADE OURSELVES AS TO HOW THE SAID RE PORT CAN BE DISCARDED BASED ON CONJECTURES AND SURMISES OF THE ASS ESSING OFFICER WHICH HAVE BEEN UPHELD BY THE CIT-A IN PART. WE NOTE T HAT THE TAX AUTHORITIES HAVE PROCEEDED ON THE FOOTING THAT THE DVO S REPORT WAS FOR CONSIDERING THE CASH FLOW STATEMENT OF EXPENDITURE AND H ENCE NOT FOR ESTIMATING THE COST OF CONSTRUCTION. HOWEVER THE SAID PRE SUMPTION IS CONTRARY TO FACTS THE SPECIFIC DIRECTION OF THE AO AS PER HIS LETTER DATED 21/09/2011 AVAILABLE IN THE PAPER BOOK AND EXTRACTED IN THE ORDER DEMONSTRATES THAT PRESUMPTION / INFERENCE WAS INCORRECT . THE TERMS OF REFERENCE ARE CLEAR AND CATEGORICAL THE AO DIRECTS BY STATING DURING THE COURSE OF SEARCH CONDUCTED AT THE RESI DENCE OF SH. ANIL TALWAR UNDER SECTION 132 OF THE INCOME TAX ACT, IT WAS FOUND THAT H.NO. 346, SECT-9/D, CHANDIGARH BELONGS TO SH. ANIL TALWAR HAS AN APPROXIMATE AREA OF 3857 SQ. YAR (6 KANAL). THE HOU SE PROPERTY IS BEING USED BY THE ASSESSEE AS HIS RESIDENCE. THIS C ASE IS BEING REFERRED TO YOUR UNDER SECTION 142A OF THE I.T. ACT 1961 FOR DETERMINING THE INVESTMENT MADE IN CONSTRUCTION OF THE RESIDENTIAL H.NO. 346, SECTOR 9/D, CHANDIGARH. THE ASSESSMENT I N THIS CASE WILL GET COVERED BY LIMITATION ON 31.12.2011. 12.20 IT IS FURTHER EVIDENT THAT EVEN IN REGARD TO THE GARDENING AND THE LANDSCAPING ETC THE ASSESSING OFFICER MAKES A REFEREN CE TO THE PAYMENTS MADE TO A MRS G SINGH CONSIDERED TO BE AN EX PENSIVE CONSULTANT HOWEVER IN THE FACTS OF THE PRESENT CASE WE FIND THAT THERE IS NO REFERENCE TO THE SAID CONSULTANT EITHER BY THE SEARCH TEAM NOR HAS ANY DOCUMENT BEEN REFERRED TO BY THE AO THE CIT(A) OR BY T HE CIT DR AS A DOCUMENT FOUND IN THE COURSE OF THE SEARCH OR ANY STA TEMENT OF ANY PERSON IN SUPPORT OF THE SAID PRESUMPTION. AS OPPOSED TO THAT WE NOTE ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 52 OF 57 FROM THE RECORD THAT IN THE QUESTIONS PUT FORTH TO MR H ARPAL SINGH DATED 18/12/2011 FOR WHATEVER ITS WORTH THE STATED STAND ON RECORD IS THAT THE GARDENING WAS DONE UNDER THE SUPERVISION OF THE ASSESS EE ITSELF. THE RELEVANT EXTRACT FROM THE ASSESSMENT ORDER IS REPRODUCED HERE UNDER: Q. 12 WHO DID THE JOB OF LANDSCAPING AND CONSTRUC TION OF BOUNDARY WAILS? ANS. THE BOUNDARY WALL WAS CONSTRUCTED BY DAILY WAGE LAB OUR AND PAID FOR FROM THE IMPREST ACCOUNT. THE LANDSCAPING WAS DONE BY THE OWN ARRANG EMENT OF MR. ANIL TALWAR. APART FROM THIS, SOME WORK WAS DONE BY MR. HITESH BEDI AS I HAVE STATED IN RESPONSE TO QUESTION NO. 11 OF MY STATEMENT RECORDED ON 29-11-2011. 12.21 BE THAT AS IT MAY WE FIND THAT IN THE FACTS OF THE PRESENT CASE THE DEPARTMENT HAS BEEN OVERWHELMINGLY PERSUADED BY P RESUMPTIONS CONJECTURES AND SURMISES SO AS TO ENTER INTO THE AREN A OF ESTIMATION WITHOUT ANY JUSTIFIABLE REASONS. THE CASE LAW REFERRED TO I N THE ORDERS AND RELIED UPON BY THE PARTIES HAVE BEEN TAKEN INTO CON SIDERATION. ON CONSIDERING THE RATIO LAID DOWN CONSISTENTLY BY THE COUR TS WE HOLD THAT THE ACT OF THE TAX AUTHORITIES TO RESORT TO AD-HOCISM IG NORING THE DVOS REPORT WAS NOT IN ACCORDANCE WITH THE SETTLED LEGAL PRINC IPLES. WE HASTEN TO ADD THAT THIS CONCLUSION IS NOT TO SAY THAT THE ASSE SSEES VERSION OF FACTS IS NECESSARILY CORRECT WHAT IT TANTAMOUNTS TO CON CLUDING IS THAT IN THE FACTS AS THEY STAND THE OCCASION TO VENTURE TO E STIMATE THE COST OF CONSTRUCTION IGNORING THE DVOS REPORT WITHOUT ANY JUS TIFIABLE REASON WHATSOEVER AND TRAVELLING BEYOND THE INVENTORY ON RECO RD AGAIN WITHOUT ANY JUSTIFICATION IS NOT PERMISSIBLE UNDER LAW. 12.22 ACCORDINGLY ON ACCOUNT OF THE REASONS SET OUT HE REIN ABOVE AND FOR THE REASONS TO BE ELABORATED HEREINAFTER WE ARE OF TH E VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE IT IS SEEN TH AT AS OPPOSED TO THE ASSESSEES CLAIM THAT THE COST OF CONSTRUCTION WAS TO BE DISTRIBUTED BETWEEN F.Y. 2004 TO 2009 WE ARE OF THE VIEW THAT IN THE ABSENCE OF ANY REBUTTAL ON THE CORRECTNESS OF THE VALUATION OFFICERS REP ORT AVAILABLE ON RECORD WE NOTE THAT SUBJECT TO THE MODIFICATIONS WHICH M AY RESULT CONSEQUENT TO THE ADDITIONS ON ACCOUNT OF THE ITEMS LEFT OUT BY THE DVO; THE SEIZED DOCUMENTS ADDRESSED IN THE ASSESSMENT ORDE R AND THE INVENTORY PREPARED BY THE SEARCH TEAM WHICH WE PROPO SE TO ADDRESS HEREINAFTER THE ESTIMATED COST OF CONSTRUCTION AS WORKE D OUT BY THE DVO HAS TO BE UPHELD AND THE SPREAD OVER AS OPPOSED TO 5 YEARS AS CLAIMED BY THE ASSESSEE IS TO BE RESTRICTED TO 4 YEARS NAMELY F.Y. 2004-05 TO 2007-08 (I.E; A.Y. 2005-06 TO 2008-09) ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 53 OF 57 12.23 ADDRESSING THE SEIZED DOCUMENTS FOUND AND CONFRONT ED TO MR. HAR PAL SINGH OF M/S SP CONSTRUCTION TOTALING RS. 56,81,0 04/- WE NOTE THAT THE ASSESSEE HAS CLAIMED THAT IT IS INCLUDED IN ITS WORKING HOWEVER NOTING THAT SOME OF THE DOCUMENTS REFER TO SAN ITARY, ELECTRICAL ELECTRONICS ETC. IN THE ABSENCE OF ANY JUSTIFICATION FOR ITS DELETION SAME IS DIRECTED TO BE INCLUDED IN THE COST OF THE SAID PREMISES IN F.Y 2008-09 (A.Y. 2009-10). WHILE COMING TO THE SAID CONCLUSION WE ARE GUID ED BY THE FACT THAT THESE APPEAR TO BE EXPENSES FOR FURNISHING OF THE CONSTRUCTED PREMISES HENCE EXPENSES RELATABLE TO THE FINAL STAGES. 12.24 SIMILARLY CONSIDERING THE SEIZED DOCUMENTS RECOVERED FROM THE RESIDENCE OF THE ASSESSEE IN THE NAME OF SMT. NINA TALWAR WIFE OF THE ASSESSEE WHICH ADMITTEDLY REFER TO FURNISHING EXPENDITURE, WE FURTHER NOTE THAT ON CONSIDERING THE DATES MENTIONED IN THE SA ID DOCUMENTS ALSO THEY ALSO NEED TO BE INCLUDED AS THE COST OF FURNISHING TH E PREMISES AND THUS DIRECTED TO BE ALSO ADDED IN F.Y. 2008-09 (I.E A.Y. 2009-10) 12.25 ADDRESSING THE SPECIFIC ITEMS WHICH HAVE BEEN EXCLUDE D BY THE DVO NAMELY ACS AND AIR CONDITIONING DUCTING ETC. W ATER PUMPS, GENERATOR SETS ETC THE ADDITION NEEDS TO BE SEPARATEL Y MADE OVER AND ABOVE THE DVOS REPORT. THUS WE NOTE THAT WHEREAS TH E ASSESSING OFFICER HAS ESTIMATED THE AIR CONDITIONING ETC. AT THE TOTAL COST OF RS. 1 CRORE PRESUMING THE HOUSE TO BE CENTRALLY AIR CONDITIONED. THE CIT(A) HAS BEEN REDUCED IT TO 31 LAKH AS NO CENTRALIZED AC UNIT IS FOUND B Y THE SEARCH TEAM. ON CONSIDERING THE INVENTORY AVAILABLE ON RECORD WHIC H MAKES A MENTION OF ONLY TWO SPLIT ACS 1 IN THE DINING ROOM AND A NOTHER IN THE PERSONAL GYM WE ARE OF THE VIEW THAT ESTIMATE OF ADDITION ON ACCOUNT OF ACS AND AC DUCTING COSTS ETC. SHOULD BE RESTRICTED TO THE EXTENT OF 15 LAKH WHICH WOULD MORE THAN ADEQUATELY ADDRESSE THE ARG UMENTS AND THE FACTS. WE HAVE ARRIVED AT THE CONCLUSION AFTER CONSIDERING THE INVENTORY AVAILABLE ON RECORD WHICH MAKES A MENTION OF ONLY TWO SPLI T ACS WHEN CONSIDERED ALONG WITH THE COST OF AC DUCTING ETC WE DEEM IT APPROPRIATE TO DIRECT THAT ADDITION OF RS. 15 LAKH WOULD MORE THAN AD EQUATELY ADDRESS THE ISSUE. THE ADDITION IS DIRECTED TO BE MADE IN F.Y. 2008-09 (A.Y 2009-10) AS AGAIN IT WOULD BE AN EXPENSE INCURRED IN THE FINAL STAGES. 12.26. WE ALSO NOTE THAT ADDITION FOR THE GENERATOR AND LIFT HAS BEEN MADE BY THE AO AT RS. 50 LACS AND 10 LACS RESPECTIVEL Y. THE CIT(A) HAS ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 54 OF 57 SUSTAINED THOSE TO THE EXTENT OF RS. 8 LAKH AND RS. 8 LA KH RESPECTIVELY. ON CONSIDERING THE REASONING OF THE CIT(A) AND SUBMISSIONS ADVANCED ON BEHALF OF THE ASSESSEE THE ESTIMATE OF RS. 8 LAKH FOR THE GENSETS IS UPHELD AS THE ARGUMENT THAT ONE GENSET WAS OLD. HOWEVE R QUA THE ESTIMATE OF LIFT IN THE ABSENCE OF ANY JUSTIFICATION FOR ESTIMATING COST OF LIFT AT RS. 8 LAKH CONSIDERING THE DEPARTMENTAL SUBMISSOINS IT IS DEEMED APPROPRIATE TO DIRECT THAT THE COST OF LIFT BE ESTIMATED A T RS. 10 LAKH BY THE AO IS RETAINED. 12.26.1 ADDRESSING THE ISSUE OF ALLOCATION OF THESE EXPENS ES WE DIRECT THAT WHEREAS COST OF ACQUISITION OF GENERATOR IS TO BE INC LUDED IN F.Y. 2008-09 (A.Y. 2009-10) AS IT WOULD BE A NEAR END STAGE EX PENDITURE. HOWEVER THE COST FOR LIFT IS DIRECTED TO BE BIFURCATED IN 20 07-08 AND 2008-09 F.Y I.E. (2008-09 AND 2009-10 ASSESSMENT YEARS) AS THE SAID EXPENSE IS A NEAR FINAL COST AND NOT NECESSARILY THE CO ST INCURRED AT THE END STAGE ITSELF. 12.27. ADDRESSING THE ADDITION FOR GYM EQUIPMENT ON ACCOUN T OF WHICH ADDITION TO THE EXTENT OF RS. 25 LAKH HAS BEEN MAD E BY THE ASSESSING OFFICER WHICH HAS BEEN REDUCED BY THE CIT-A TO THE EXTENT OF 12 LAKH THE LD. AR IN THE COURSE OF THE ARGUMENTS HAS INVITE D ATTENTION TO THE SPECIFIC ITEMS MENTIONED IN THE INVENTORY PREPARED WH ICH WOULD SHOW THAT THE EQUIPMENT CONSISTS OF BENCH PRESS SPACE , LEG EXTENSION, JOGGER, TREADMILL, LAT PULL, CHEST PRESS ETC. NOTING THE ARGU MENTS THAT THESE ARE ROUTINE GYM EQUIPMENT AND COST OF 12 LACS IS TOO HIGH WE HOLD THAT THE ESTIMATED ADDITION OF RS. 18 LAKH WOULD ADDRESS T HE ARGUMENTS ADVANCED. WE NOTE THAT NOTHING HAS BEEN BROUGHT TO OU R NOTICE BY THE REVENUE TO JUSTIFY THE ESTIMATE OF THE AO OR THE CIT-A WHEREAS THE LD. AR HAS INSISTED THAT COST OF THE SPECIFIC GYM EQUIPMENTS W OULD NOT EXCEED RS. 4 TO 5 LACS AND PRINTED EVIDENCE IN REGARD T HERETO WAS STATED TO BE READILY AVAILABLE IN THE PUBLIC DOMAIN. SINCE THE SAID E VIDENCE HAS ALSO NOT BEEN FILED NOR MADE AVAILABLE ON RECORD THE ABOVE ESTIMATE IT IS CONSIDERED WOULD BE FAIR AND JUST CONSIDERING THE SUBMISSIO NS AND THE FACTS ON RECORD. THE SAME IS DIRECTED TO BE INCLUDED IN T HE EXPENDITURE INCURRED IN 2008-09 FINANCIAL YEAR (2009 10 A.Y.) FOR THE REASON THAT IT IS A COST WHICH WOULD BE INCURRED AT THE FINAL STAGES. 12.28 ADDRESSING THE COST INCURRED FOR ELECTRONICS ITEMS LI KE TV, DVD MUSIC SYSTEMS ETC. FOR WHICH SEPARATE ADDITION OF RS. 12 LAK H HAS BEEN ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 55 OF 57 MADE BY THE CIT-A APPEALS. CONSIDERING THE SUBMISSIONS OF THE PARTIES THE SAME IS REDUCED TO RS. 10 LAKH AS THE SEIZED DOCUM ENTS FROM MR. HARPAL SINGH ALSO MAKE A REFERENCE TO ELECTRONICS. THE SAID IS DIRECTED TO BE INCLUDED IN THE EXPENDITURE INCURRED IN 2008 09 F.Y (2009-10 A.Y.) 12.29 IT IS SEEN THAT FOR LANDSCAPING THE CIT-A HAS ESTIM ATED THE EXPENDITURE AT RS. 19 LAKH AS OPPOSED TO RS. 35 LAKHS B Y THE AO. NO DOCUMENT RELATABLE TO MRS. G. SINGH IS FOUND ON RECORD ON THE CONTRARY STATEMENTS EXTRACTED IN THE AO SHOW THAT IT HAS BEEN CLAIMED THAT IT WAS OVERSEEN BY THE ASSESSEE. HOWEVER THE FACT THAT EVEN FOR THE SAID PURPOSES PLANTS, FERTILISERS, AND LABOUR COSTS OF MALLI ETC. W OULD HAVE BEEN INCURRED ACCORDINGLY CONSIDERING THE ARGUMENTS SUB MISSIONS AND FACTS ON RECORD IT IS DEEMED APPROPRIATE THAT THESE COS TS ARE ESTIMATED AT A FIGURE OF RS. 12 LAKH AND DIRECTED TO BE SPREAD OVER IN 2006 07 TO 2008 09 F.Y. (AY2007-08 TO 2009-10) IN THE RATIO 20% IN 2006 07 FY AND 40% EACH IN THE FOLLOWING TWO FINANCIAL YEARS 12.30 THE ESTIMATED COSTS FOR BILLIARD ROOM AND DISCOTHEQU E AT 3 LAKH AND 5 LAKH ARRIVED AT BY THE CIT-A ARE NOT INTERFERED W ITH EXCEPT FOR THE DIRECTION THAT THESE ARE TO BE INCLUDED IN 2008 09 FY (2009 10AY) 12.31 CONSIDERING THE ARGUMENTS AND FACTS QUA THE SOFT COSTS PERTAINING TO THE PAINTINGS AND MURALS WHICH HAVE BEEN ESTIMATED B Y THE CIT(A) AT RS. 30 LAKH WHEREIN THE ASSESSEE HAS CLAIMED THAT THESE WERE NOT ORIGINAL PAINTINGS OR MURALS AND THESE WERE INFACT FRAMED PH OTOGRAPHS. THE ARGUMENT HAS BEEN SUPPORTED ON THE REASONING THA T HAD THESE BEEN HIGH-END ORIGINAL PAINTINGS THEN THEY WOULD NECESSARILY HAV E BEEN INVENTORIZED IN THE COURSE OF THE SEARCH AS MERE PHOTOG RAPHING THESE WOULD NOT DEMONSTRATE THE AUTHENTICITY OR ORIGINALITY OF TH E PAINTINGS. ACCORDINGLY CONSIDERING THE SUBMISSIONS AVAILABLE ON RECORD WHICH HAVE BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDER AND THE REASONING BASED ON THE FACTS AVAILABLE ON RECORD WE DEEM IT APPROPRIATE T HAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THA T IT WOULD BE APPROPRIATE TO ESTIMATE THE COSTS OF PROFESSIONALLY FRAMING AND MAKING FIT FOR DISPLAYING THE WELL DISPLAYED PAINTINGS WHICH WERE NOT ORIG INAL PAINTING BUT PAINTINGS OF ORDINARY STREET ARTISTS/PHOTOGRA PHS/PRINTS ETC WE ESTIMATE THE COST AT RS. 15 LACS WHICH IS DIRECTED TO BE INCLUDED IN 2008-09 FY (2009-10A.Y). ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 56 OF 57 12.32 WE FURTHER NOTE THAT FOR FURNITURE ETC. THE CIT(A) HA S ESTIMATED THE EXPENDITURE AT RS. 51 LAKH. ON A PERUSAL OF ANNEXURE II OF THE DVOS REPORT IT IS SEEN THAT THAT COST OF CUPBOARD HAS BEEN ESTIMATED AT RS. 7,74,591 AND AS NOTED EARLIER WE FIND THAT NO SPECIFIC REBUT TAL QUA THE SAME HAS BEEN GIVEN. ACCORDINGLY IN THE CIRCUMSTANCES WE DEEM IT APPROPRIATE TO DIRECT THAT THE SAME TO BE REDUCED FROM THE FURNITURE AND FIXTURE COST ESTIMATED BY THE CIT-A AT 51 LAKH RUPEES. SAME IS DIRE CTED TO BE INCLUDED IN 2009-10 A.Y. AS IT AGAIN WOULD BE AN END STAGE COST. 12.33 IT IS FURTHER SEEN THAT AS OPPOSED TO THE ADDITION OF RS. 25 LAKH FOR BIOMETRIC ENTRANCE/SECURITY SYSTEM THE CIT-A HAS ESTIMA TED THE SAME AT RS. 3 LAKH. WHEREAS NOTHING HAS BEEN PLACED BY THE REVEN UE IN SUPPORT OF THE ESTIMATE OF RS. 25 LAKH OR RS. 3 LAKH THE LD. AR ON THE OTHER HAND HAS VEHEMENTLY ARGUED THAT THIS IS A READILY AND CHEAP LY AVAILABLE TECHNOLOGY ON ORDINARY PHONES FOR PERMITTING THE USAGE O F THE HANDSET AND IN OFFICES FOR MARKING ATTENDANCE ETC. HOWEVER CONSIDER ING THE SUBMISSIONS FACTS AND EVIDENCES ON RECORD AND NOTING THA T THE SECURITY SYSTEM WOULD NECESSARILY COME ALONGWITH CAMERAS RECORDIN G SYSTEM AND A MEMORY IT IS DEEMED APPROPRIATE TO REDUCE THE ESTIMAT E TO THE EXTENT OF RS. 2 LAKH. THE SAME IS DIRECTED TO BE INCLUDED IN FY 200 8-09 (2009 10 AY) 12.34 IT IS NOTED THAT THE AO HAS ESTIMATED THE COST OF SWIMMING POOL AT RS. 25 LAKHS. THE CIT(A) HAS REDUCED THE SAME TO RS. 8.5 LAKH. TAKING NOTE OF THE FACT THAT THE DVO HAS ALSO FACTORED IN THE CONSTRUCTION COST AND THE CIT(A) HAS CONSIDERED THE MAIN TENANCE AND FUNCTIONING COST ASPECTS. THE ADDITION IS RETAINED WITH THE DIRECTION THAT IT BE DIVIDED IN EQUAL EXPENDITURE FOR 2007-08 AND 2008-09 F.Y. 13. ACCORDINGLY FOR THE DETAILED REASONS GIVEN HEREIN ABOV E AFTER CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PR ESENT CASE IN THE RESPECTIVE YEARS THE SUBMISSIONS AVAILABLE ON RECORD AND THE FINDINGS ARRIVED AT IN THE IMPUGNED ORDER IN THE LIGHT OF THE DECIS IONS CITED BY THE ASSESSEE THE DEPARTMENT AND THE TAX AUTHORITIES THE G ROUNDS RAISED BY THE ASSESSEE AND THE REVENUE ARE PARTLY ALLOWED IN THE RESPECTIV E YEARS 14. ADDRESSING THE SOLE ISSUE WHICH REMAINS FOR ADJUDICATIO N IN 2007 08 ASSESSMENT YEAR IN ITA 588/CHD/2013 THAT IS GROUND NO. 13 PERTAINING TO THE EDUCATION EXPENSES OF SH. DHRUV TALWAR ON CONSIDERING ITA 722,723,725,726/CHD/2013 & ITA 586 TO 590/CHD/2013 PAGE 57 OF 57 THE MATERIAL AVAILABLE ON RECORD WE NOTE THAT THE ISSUE H AS BEEN DISCUSSED BY THE ASSESSING OFFICER IN THE LAST 3 UNNUMBERE D PAGES OF HIS ORDER WHEREIN HE NOTES THAT THE SON OF THE ASSESSEE H AD GONE TO USA FOR DOING A COURSE OF GRADUATE IN DIAMONDS AND JEWELLERY BUS INESS MANAGEMENT WITH THE GEMOLOGICAL INSTITUTE OF AMERICA, CALIFOR NIA FOR A PERIOD OF ONE YEAR. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE EXPENDITURE WHEREIN THE SPECIFIC NAME OF THE COURSE; THE EXPENSES IN CURRED FOR FOODING, LODGING, TRAVELLING THE TUITION FEES DURATION OF STAY ETC WERE REQUIRED TO BE GIVEN. IN RESPONSE TO THE SAME THE ASS ESSEE EXPLAINED VIDE LETTER DATED 19/10/2011 AND WHICH HAS BEEN EXTRACTED IN THE ASSESSMENT ORDER WHICH WAS FURTHER ELABORATED BY ANOT HER LETTER DATED 21/11/2011 THE RELEVANT EXTRACT THEREFROM HAS ALSO BE EN REPRODUCED IN THE ORDER JUSTIFIED THE EXPENSES. NOT CONVINCED WITH THE EXPLANATION OFFERED ADDITION OF RS. 10 LAKH WAS MADE IN THE HANDS OF TH E ASSESSEE. THE SAID ADDITION WAS CHALLENGED IN APPEAL BEFORE THE CIT-A BY FILING GROUND NO. 20. HOWEVER THE LD. CIT(A) WHILE PASSING THE ORD ER DID NOT ADJUDICATE UPON THE SAID GROUND. CONSIDERING THE SUBMISSIO NS OF THE PARTIES AND THE MATERIAL AVAILABLE ON RECORD IN THE PECULIA R FACTS AND CIRCUMSTANCES OF THE CASE IT IS DEEMED APPROPRIATE TO SE T ASIDE THE ISSUE BACK TO THE FILE OF THE CIT-A WITH THE DIRECTION TO PASS A SPEAKING ORDE R IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONAB LE OPPORTUNITY OF BEING HEARD 15. IN THE RESULT THE APPEALS OF THE REVENUE ARE PARTL Y ALLOWED AND THE APPEALS OF THE ASSESSEE IN 2005-06, 2006-07, 2008-09 AND 2009-10 A.Y. ARE PARTLY ALLOWED AND THE ITA 588/CHD/2013 IN 2007-08 ASSESSMENT YEAR OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08/02/2018. SD/- SD/- (B.R.R. KUMAR) (DIVA SI NGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM/AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3.THE CIT, 4.THE CIT(A), 5. THE DR