|The Tax Publishers2021 TaxPub(DT) 0680 (Del-Trib)
INCOME TAX ACT, 1961
It can be seen from the assessment order that the AO had made enquiries in respect of the cost of construction and it cannot be said that no query was raised by the AO in respect of the cost of construction, it was not open to enquire in case of inadequate enquiry, in fact in the present case the facts clearly show that adequate enquiries were made by the AO which were duly replied by the assessee and the AO had taken one of the plausible views, therefore, the Pr. CIT cannot substitute his view with that of the AO.
Revision under section 263 - Erroneous and prejudicial order - Plausible view as well inadequate enquiry -
The AO was convinced with the correctness of the second valuation report and accepted the cost of construction at Rs. 1,23,82,385. Pr. CIT observed: 'On perusal of the assessment records, prima facie, it was noticed that the AO, while completing assessment, had adopted the quantum of investment made in the construction of property at Rs. 1,23,82,385. Further, it was also noticed that as per the first valuation report for building cost of immovable property dt. 15-12-2012 of the registered valuer, filed by assessee on 18-12-2012, the fair market value of building cost had been determined at Rs. 1,82,43,000, which was exclusive of Additional Expenses of Rs. 21,11,458 for Architect Fee & MCI) Sanction Plan Fee. Therefore, it was observed that the assessment order, passed by AO was erroneous in so far as it was prejudicial to the interest of the revenue. Held: Undoubtedly, the valuation Report, dt. 15-12-2012, had valued the property as on 15-12-2012 whereas the assessment year under consideration was assessment year 2010-11 relevant to financial year 2009-10. As the construction was completed on 31-3-2010 the assessee correctly got the second Valuation Report, dt. 15-12-2012 valuing the property as on 31-3-2010. These facts were very much available during the course of the scrutiny assessment proceedings itself and also before the Pr. CIT for proceedings under section 263. It was found that the AO had correctly accepted the correct valuation report and completed the assessment. It can be seen from the assessment order that the AO had made enquiries in respect of the cost of construction and it cannot be said that no query was raised by the AO in respect of the cost of construction. It was not open to enquire in case of inadequate enquiry. In fact in the present case the facts clearly show that adequate enquiries were made by the AO which were duly replied by the assessee. The AO had taken one of the plausible views and the Pr. CIT therefore, cannot substitute his view with that of the AO. Considering the facts of the case in totality in light of judicial decisions, Tribunal set aside the order of the Pr. CIT dt. 31-3-2015 and restored that of the AO dt. 31-3-2010 framed under section 143(3).
Relied:CIT v. Nirav Modi (2016) 71 taxmann.com 272 (Bom) : 2016 TaxPub(DT) 3506 (Bom-HC), Prakash Bhagchand Khatri in Tax Appeal No. 177 with Tax Appeal No.178 of 2016 and CIT v. Anil Kumar (2010) 335 ITR 83 (Del) : 2010 TaxPub(DT) 1573 (Del-HC)
REFERRED : Toyota Motor Corporation (2008) 306 ITR 52 (SC) : 2008 TaxPub(DT) 2244 (SC) and Shri Bhram Dev Gupta in ITA No.907/2017 C.M. Appl. 38787/2017
FAVOUR : In assessee's favour
A.Y. : 2010-11
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