COMMISSIONER OF INCOME TAX Vs. APARAJITHA SHANTILAL MAHAJAN

JUDGEMENT

(1.) THIS is an income-tax- reference made under s. 256 (1) of the IT Act by the Tribunal at the instance of Revenue (CIT) in RA No. 347/ind/1993 arising out of an order dt. 6th Oct. , 1993, passed by Tribunal in ITA Nos. 677 and 678/ind/1990 to answer the following question of law :

(2.) THE question arises on these facts.

(3.) FOR the assessment year in question, the dispute arose in regard to the actual expenditure incurred by an assessee on his building. There was some difference in the amount disclosed by the assessee and what the DVO to whom the case was referred for valuation had worked out. So, the question arose, what figure should ultimately be accepted for determining the cost of construction of the building belonging to assessee, i. e. , the one disclosed by assessee or the one determined by DVO (Rs. 6,06,000 ). It is essentially this question which was the subject-matter of controversy in this case Which was reopened by AO by taking recourse to the provisions of s. 148 of IT Act on the strength of DVO's report. The AO made additions of Rs. 1,27,436 but spread over in three assessment years, i. e. , 1984-85, 1985-86 and 1986-87. This order of AO was subject-matter of appeal before CIT (A ). In appeal, there was some additional inquiry conducted. The assessee submitted some bills amounting to Rs. 1,62,468 for adjustment saying that this liability was not taken note of by DVO. The CIT (A) then went into all mathematical calculation and also took into consideration certain concessions made by assessee through his lawyer and eventually while sustaining the additions made by AO, also added Rs. 1 lakh and then spread over in three assessment years. It is this order which was challenged by the Revenue as also by the assessee. The Tribunal dismissed the appeal filed by the Revenue and allowed the cross-objection filed by the assessee. It is against this decision of the Tribunal, the Revenue prayed for reference which was initially declined by the Tribunal but later made as directed by this Court.