Dr.K.Venkatasubramanian, Sivakasi vs Assessee
- CitationI.T.A. No. 755/Mds/2014
Ratio decidendi
The rule this decision rests on
Where the assessee's grounds 1 to 3 were withdrawn and dismissed, no ratio arises from them. On the remaining issues, the Tribunal reasons as follows. On the choice of valuation rate for construction cost in a mofussil area, the Tribunal, following the jurisdictional High Court decision in T.M.P.N. Murugesan v. CIT, holds that the State PWD rate, not the CPWD rate, is applicable to a property situated in such an area, and remits the issue to the Assessing Officer to compute the cost of construction accordingly. On self-supervision charges, the Tribunal holds that where the assessee personally supervised construction, the supervision was not doubted by the Departmental Valuation Officer, and the work was not entrusted to an outside contractor, the assessee is entitled to a deduction of 5% on the cost of materials (cement, sand, steel and the like), and the entire issue is remitted to the Assessing Officer for fresh consideration.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Dr. K. Venkatasubramanian, The Income Tax Officer, 72C, Ulavarsanthai Road, Vs Ward I(4), Sivakasi. Virudhunagar 626 001.
[PAN:ACNPV 3346H] (अपीलाथ&/Appellant) ('(यथ&/Respondent)
अपीलाथ क ओर से / Appellant by : Shri. K. Balasubramanian, Advocate यथ क ओर से / Respondent by : Shri. A.V. Sreekanth, IRS, JCIT.
सन ु वाई क तार ख/Date of hearing : 21.05.2015 घोषणा क तार ख /Date of Pronouncement : 29.05.2015
आदे श / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER
This appeal by assessee is directed against the order of the
Commissioner of Income Tax (Appeals)-II, Madurai, dated 31.01.2014
for the assessment year 2008-2009.
.
:- 2 -: I.T.A.No.755/Mds/2014.
2. The assessee has raised the following grounds:-
"01. The order of the authorities below are contrary to law weight of evidence and probabilities of the case.
02. The Assessing Officer erred in estimating the cost of construction of the Annai Clinic at Sivakasi at ₹1,24,47,660/- as against ₹75 lakhs admitted by appellant and in making an addition of ₹51,83,660/- and the learned Commissioner of Income Tax (Appeals) erred in confirming the addition without considering the detailed written submission supported by case laws.
03. The learned Commissioner of Income Tax (Appeals) erred in not at all considering the ground that when the Assessing Officer himself has recorded in the assessment order that '' all the impounded books of accounts relating to Annai Clinic and building constructions were verified and in the absence of rejection of such books, and /or the approved valuer's report filed before him, the Assessing Officer ought not to have referred the matter of valuation to DVO. Reliance placed on SC's decision in the case of SARGAM CINEMA vs. CIT (2011) 197 Taxman 203(SC) and other decisions was not all considered.
04. Without prejudice to the above, the learned CIT(A) erred in rejecting the plea that PWD rates should be adopted in respect of valuation of a property at Sivakasi without following the binding nature of jurisdiction H.C. decision in the case of T.M.P.N.Murugesan vs. CIT (2013) 217 Taxmann 40(Mad) brought to his notice.
05. Without prejudice to ground No.2, the learned Commissioner of Income Tax (Appeals) erred in not allowing discount for personal supervision, less construction cost in a town like Sivakasi and spread over of cost of construction for 02 years without following jurisdictional Tribunal's decision in ITA No.1175 & 1176/2012 ''A'' brought to his notice''.
3. At the time of hearing, the ld. Authorised Representative for
assessee made an endorsement that the assessee is not interested in
pressing ground nos.1 to 3. Accordingly, these grounds are dismissed
has not pressed.
:- 3 -: I.T.A.No.755/Mds/2014.
4. The next ground for our consideration is with regard to
application of State PWD rate instead of CPWD rate. The ld.
Authorised Representative for assessee submitted that the property
constructed by assessee at Sivakasi is a mofusill area, as held by
jurisdictional High Court in the case of T.M.P.N. Murugesan vs. CIT
(2013) 217 Taxman 40 (Mad), where state PWD rate is applicable.
Accordingly, we remit the issue back to the file of the Assessing Officer
to apply state PWD rate so as ascertain the cost of construction and
decide accordingly.
5. The next ground for our consideration is allowability of self
supervision charges. The ld. Authorised Representative for assessee
submitted that assessee himself carried out supervision and the same
is confirmed by the DVO and reasonable allowance to be made
towards self supervision charges.
6. On the other hand, the ld. Departmental Representative
submitted that the assessee being a Doctor would have had no time to
oversee the construction work and no deduction towards self
supervision is to be given.
:- 4 -: I.T.A.No.755/Mds/2014.
7. In our opinion, the fact that self supervision by the assessee was
not doubted by the DVO while furnishing valuation report and the work
was not given to the outside contractor. Hence, deduction at the rate
of 5% is to be given to the assessee on cost of materials i.e. cement,
sand, steels etc. With these observations we remit the entire issue to
the file of the Assessing Officer for fresh consideration.
8. In the result, the appeal of the assessee in ITA
No.755/Mds/2014 is partly allowed for statistical purpose.
Order pronounced on Friday, the 29th day of May, 2015, at Chennai.
Sd/- Sd/- (वी. दग ु ा! राव) (चं पज ू ार ) V. DURGA RAO (CHANDRA POOJARI) या"यक सद य / JUDICIAL MEMBER लेखा सद य/ ACCOUNTANT MEMBER
चे#नई/Chennai. $दनांक/Dated:29.05.2015. KV
आदे श क त'ल(प अ)े(षत/Copy to: 1. अपीलाथ /Appellant 2. यथ / Respondent 3. आयकर आय+ ु त (अपील)/CIT(A) 4. आयकर आय+ ु त/CIT 5. (वभागीय त न.ध/DR
6. गाड फाईल/GF.
:- 5 -: I.T.A.No.755/Mds/2014.
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