Puliyambra Subramanian Udayakumar Vs ITO (ITAT Cochin)
ITAT Cochin dismisses appeal on unexplained investment in house construction; directs assessee to challenge DVO valuation separately
Assessee, an individual, had not filed a regular return of income for AY 2014-15. Based on information that he had constructed a double-storey residential house at a cost estimated between ₹50–60 lakh, AO issued a notice u/s 142(1). In response, Assessee filed his return on 26.02.2016 declaring an income of ₹2,40,000. AO completed the assessment u/s 143(3) on 29.12.2016, determining total income at ₹23,35,043. This included an addition of ₹20,95,043 as unexplained investment in the house construction, based on DVO report.
Assessee challenged the addition before CIT(A), contending that the actual construction cost was far lower. However, the CIT(A) upheld the AO’s findings, noting the assessee’s failure to satisfactorily explain the source of funds for the cost of construction.
Assessee argued before ITAT that DVO’s valuation was inflated & actual cost was only ₹22,00,000, producing documents such as the well-digging permission (03.12.2008) & electricity application (29.01.2009) to support his contention.
Tribunal observed that the issue in the appeal relates to the addition made on account of value of construction based on DVO’s report. Assessee is aggrieved by the DVO’s report, a separate appeal lies before CIT(A). The validity of DVO’s cannot be challenged in the appeal against the order passed u/s. 143(3) & therefore, Assessee is at liberty to pursue the alternative remedy of appeal against the DVO’s report. Tribunal thus held that it did not find any merit in the present appeal filed by the assessee & dismissed the appeal with the aforesaid liberty.
