S V VIJAYALAKSHMI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE appellant is a dealer in rice and is an assessee on the files of the Income-tax Officer, Ward I, Thiruvananthapuram, the respondent herein. THE assessment year concerned is 1990-91. THE appellant returned an income of Rs. 69,370. During the accounting period relevant to the said assessment year, the appellant has completed the construction of a commercial building named as "S. K. Towers". As per the books of account maintained by the assessee, the total cost of construction came to Rs. 18,49,189. THE assessing authority referred the matter to the Departmental Valuer and obtained a valuation report. As per the said valuation, the cost of construction came to Rs. 26,18,700. THE assessing authority deducted Rs. 1,12,838 added by the Departmental Valuer as expenses on account of stronger foundation and Rs. 49,050 towards architect's fee and determined the cost of construction of the building at Rs. 24,56,812 and treated the difference of Rs. 6,07,623 as the income from undisclosed sources. In appeal by the appellant, the Commissioner of Income-tax (Appeals) reduced the said addition to Rs. 2 lakhs. In further appeal by the assessee, the Tribunal confirmed the order of the Commissioner.

(2.) SHRI S. Ananthakrishnan, learned counsel appearing for the appellant, submits that the appellant has been maintaining regular books of account with respect to the cost of construction of the building, that the assessing authority, without finding any irregularity in the said accounts had referred the matter for a valuation report from the Departmental Valuer and completed the assessment on the basis of the said valuation report. Counsel further submits that the Tribunal should have deleted the entire addition holding that there is no justification for referring the matter to the Departmental Valuer or for relying on the valuation report of the Departmental Valuer ignoring the regular books of account and the valuation report submitted by the appellant.