AO after making detailed enquiry regarding cost of construction of hotel building had taken a broad view by accepting cost of fixed assets as recorded in books of account which were also supported by valuation report, then order of Assessing Officer could not be held to be erroneous on ground of lack of enquiry . Estimated cost of valuation for availing bank loan cannot constitute actual cost .It was not mandatory for Assessing Officer to refer valuation to DVO once he was satisfied with cost of construction and cost of fixed assets as recorded in books of account. Order of Tribunal quashing the revision proceeding is up held (AY. 2013-14)
PCIT v. Om Rudra Priya Holiday Resort (P.) Ltd. (2019) 266 Taxman 97/ 311 CTR 935/ 184 DTR 378 (Raj) (HC )
S. 263 : Commissioner – Revision of orders prejudicial to revenue -AO had taken a broad view by accepting cost of fixed assets as recorded in books of account which were also supported by valuation report, then order of Assessing Officer could not be held to be erroneous on ground of lack of enquiry- Estimated cost of valuation for availing bank loan cannot constitute actual cost – It was not mandatory for Assessing Officer to refer valuation to DVO once he was satisfied with cost of construction and cost of fixed assets as recorded in books of account- Revision is held to be not valid . [ S.142A ]