COMMISSIONER OF INCOME TAX Vs. CENTRAL MALL

JUDGEMENT

(1.) THE Revenue has preferred this appeal under s. 260A of the IT Act, 1961 (for short, "the Act") against the order of the proposing to raise the following substantial questions of law : "(i) Whether on the facts and in the circumstances of the case, the Tribunal Amritsar Bench, Amritsar was justified in law while deleting the additions of Rs. 20,21,710 by including the provision for future expenses in the value of the work -in - and which is in contravention of r. 46A of the IT Rules, 1962. (ii) Whether on the facts and in the circumstances of the case, the Tribunal Amritsar Bench, Amritsar was justified in law by accepting evidence by way of an affidavit which was not produced before the AO contrary to the provisions as laid down in r. 46A of the IT Rules, 1962."

(2.) THE assessee is a builder. In the course of assessment the AO made addition to the declared income on the basis of the valuation of the work -in -progress. The CIT(A) upheld the valuation of the assessee. The CIT(A) took into account the affidavit filed before him by the assessee reiterating its stand. The view taken by the CIT(A) was upheld by the Tribunal, rejecting the contention that the additional affidavit could not be taken into account, as doing so would violate r. 46A of the IT Rules, 1962. The Tribunal observed as under : "16. The affidavit filed by the assessee before the learned CIT(A) was in reiteration of the above contention. Therefore, there was no error on the part of the CIT(A) in admitting such affidavit. Rather, it was erroneous on the part of the AO, to hold that the third and fourth floors of the Central Mall had not been constructed during the year under consideration. That the provision was allowed for the common facilities and amenities, as above, is also patent on record."

(3.) WE have heard learned counsel for the Revenue.