- (1.) THE present appeal had been admitted in terms of the following questions : "1. Whether the judgment passed by the learned Income-tax Appellate Tribunal suffers from perversity or not ?
(2.) WHETHER the learned Income-tax Appellate Tribunal was right in its wisdom to apply the Rajasthan PWD rates for working out the cost of construction of the said property for income-tax purpose, instead of CPWD rates ? Whether the learned Income-tax Appellate Tribunal was right in deleting the addition of Rs. 41,400 by holding that when entries find place in the regular cash book, then no addition can be made in the block assessment until there is evidence to the contrary ? Whether the addition on the basis of examination of the regular books of account seized during the course of search is out of the purview of the block assessments ?" A search and seizure operation was carried out at the residential and business premises of the director of the assessee-company on November 9, 1995, and some incriminating documents/papers pertaining to the assessee-company were found during the search and seizure operation and the same were seized. A notice under Section 158BC(b) of the Income-tax Act, 1961, was issued to the assessee-company on January 16, 1998, whereby the assessee was called upon to file the return of income for the block period, i.e., 1985-86 to 1995-96. In response to the said notice, the assessee-company had filed the return showing "nil" income for all these years. Another notice under Section 158BC(b) was also issued to the assessee-company along with the questionnaire asking the assessee-company to explain the incriminating documents/ papers, etc., seized pertaining to the assessee-company. In response to the aforesaid notice, one Mr. Ravi Mathur attended the proceedings before the Assessing Officer and the case was discussed at length. After considering the material on record and the explanation furnished by Mr. Mathur, an addition of Rs. 41,400 has been assessed for the assessment year 1993-94 and an addition of Rs. 2,76,302 has also been made in the assessment year 1996-97.
(3.) BEFORE us, the issue relates to the investment made for the construction of the building where the issue was whether the valuation of the building should be at the rate of Public Works Department (PWD) or at the rate of Central Public Works Department (CPWD). The other issue before us is whether Rs. 41,400 deposited by the assessee-company be treated as undisclosed income of the assessee or not ? Mr. Mathur, learned counsel for the Revenue, submits that when the amount of Rs. 41,400 was found to be credited in the name of various parties, they were not produced, the Assessing Officer, has rightly assessed the tax treating it as undisclosed income. He further submits that the valuation of the constructed building could be assessed as per the CPWD rates and it also depends upon various factors, no straightjacket formula shall apply to assess the valuation of the constructed building on the basis of the PWD or the CPWD rates. He supported the view taken by the Assessing Officer. Mr. Kasliwal, learned counsel for the assessee, submits that the deposits made by Shri Ram Kumar Dhanuka should not be taxed as he is one of the collaborators and the returns were not filed by the assessee-firm in these years as the assessee was engaged only in one project. Unless that project is complete they are not bound to show any income in that assessment year from 1986-87 onwards. Mr. Kasliwal further submits that as the Tribunal has found just and reasonable cause to apply the PWD rate for assessing the investment, it is a question of fact and unless it is found perverse, the finding of the Tribunal should not be disturbed. ;