PATIL ENTERPRISES Vs. ASSISTANT COMMISSIONER OF INCOME TAX
LAWS(IT)-1995-6-17
INCOME TAX APPELLATE TRIBUNAL
Decided on June 22,1995

Appellant
VERSUS
Respondents

JUDGEMENT

BALASUBRAMANYAM, J.M. : - (1.)THE issue to be resolved in this appeal is about cost of construction of two cinema theatres which the assessee had constructed in Gulbarga city.
(2.)The assessment year is 1983-84 and the previous year ended on 30th June, 1982.
The commencement of construction of the twin theatres started in November, 1977 and it was completed somewhere in the middle of March, 1982. In the return filed, the cost of construction shown was Rs. 21.31 lakhs. The Assessing Officer did not accept this valuation. He made a reference to the Departmental Valuation Officer (DVO) whose report was received. He had estimated the cost at Rs. 35.48 lakhs as on 19th Oct., 1984, the day of his inspection. The assessee had maintained books of account in regard to construction.

(3.)THE assessee had objected to the report of the DVO. THE assessee also had furnished to the Assessing Officer the report of an approved valuer according to which the cost was Rs. 21,36,110. THE Assessing Officer accepted the DVOs valuation. On the basis of that, he determined, in his own way, the cost of construction of the two theatres for the purpose of assessment. THE difference between that cost and the declared cost was treated as unexplained investment and the same was spread over for five years on month-to-month basis Rs. 22,000 was the addition made for this year (1983-84).


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