DY. CIT Vs. M/S. RAVI BUILDERS

JUDGEMENT

(1.) FEELING aggrieved and dissatisfied with the impugned judgment and order dated 31.08.1999 passed by the learned Income Tax Appellate Tribunal hereinafter referred to as "Tribunal"] in ITA (SS) 4/RJT/98 for the block period 198687 to 2425.12.1996, the Revenue has preferred the present tax appeal to consider the following substantial question of law.

(2.) THAT the assessee is a partnership firm belonging to one Ravi Builders Group of cases and derives income from the business of construction. Search and seizure operations were carried out by the Income Tax Authorities under Section 132 of the Income Tax Act, 1961 hereinafter referred to as "Act"] at the business and residential premises of the group resulting in seizure of bulk of documents and records. The AO made the block assessments in the various cases of the group, namely, Ravi Holdings Pvt. Ltd., Ravi Builders as well as the assessee firm. It appears that during the block assessment proceedings with respect to the assessee firm, the AO was of the opinion that the cost of land and the cost of building declared by the assessee at Rs.10,80,930 and Rs.59,70,252/ does not reflect the correct cost with respect to the building known as 'Ravi Darshan'. The AO was of the opinion that the assessee has undervalued the cost of the land and building 'Ravi Darshan' and therefore, the case of the assessee was referred to the valuation committee of the department to work out the fair market cost of the land and building and according to the District Valuation Officer, the cost of the land is Rs.11,54,000/ instead of Rs.10,80,830/ declared by the assessee and the cost of the building was Rs.69,35,627/ instead of Rs.59,80,252/ declared by the assessee. Therefore, the AO was of the opinion that the assessee has undervalued the cost of the land and building 'Ravi Darshan' to the extent of Rs.10,23,545/ and therefore, after giving an opportunity to the assessee, directed to add the aforesaid difference i.e. Rs.10,23,545/ into the income of the assessee on account of unaccounted cost of construction of the aforesaid building 'Ravi Darshan'.

(3.) ON the other hand, Shri S.N. Soparkar, learned Counsel appearing on behalf of the assessee has vehemently submitted that as such on the basis of the District Valuation Officer's report, which was subsequently obtained by the AO during the course of the assessment proceedings, such difference between the valuation declared by the assessee and the valuation report by the District Valuation Officer could not have been added as undisclosed income in a block assessment proceedings under section 158BC of the Act. In support of his above submissions, he has relied upon the decision of the Division Bench of this Court in the case of Commissioner of Incometax Vs. Kantilal B. Kansara (HUF) reported in (2011)337 ITR 187 (Guj.). He has also relied upon the decision of the Bombay High Court in the case of CIT v. Dr. M.K.E. Memon reported in 248 ITR 310 (Bom.). It is submitted that the aforesaid submission was made by the assessee before the learned Tribunal. It is submitted that therefore the learned Tribunal is justified in directing to delete the aforesaid addition of Rs.10,23,545/, which was on the basis of the District Valuation Officer, which was obtained subsequently. Making above submissions and relying upon above decisions, it is requested to dismiss the present appeal.