COMMISSIONER OF INCOME-TAX Vs. D LAXMANAKUMAR

JUDGEMENT

(1.) THE above tax case appeals are directed against the common order of the Income-tax Appellate Tribunal in ITA.Nos.433 and 434/Mds/2003, dated 25.11.2005.

(2.) 1. The Revenue is the appellant. The assessment years involved are 1998-99 and 1999-2000. The assessee, who is a medical practitioner, constructed a nursing home during the period February 1996 to October 1998. On a survey conducted by the Income-tax department on 3.11.1998, it was found that the cost of construction as shown by the assessee at Rs.19,40,500/- has been underestimated and the assessing officer, based on the report of the Departmental Valuation Officer, estimated the cost of construction at Rs.37,31,906/- and accordingly, called upon the assessee to explain as to why the difference amount of Rs.17.92 lakhs should not be treated as unexplained investment. After a detailed enquiry, the assessing officer completed the assessment and brought to tax a sum of Rs.18 lakhs by treating it as unexplained investment. 2.2. Against the said order of assessment, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who, by order dated 11.12.2002, reduced the cost of construction by Rs.5 lakhs. On further appeal by the assessee, the Income-tax Appellate Tribunal, placing reliance on the decision of the Apex Court in COMMISSIONER OF INCOME-TAX v. Dr.B.Venkata Rao [(2000) 243 I.T.R. 81], held that the cost of construction of the nursing home is entitled for depreciation on the ground that it is a plant.