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TAXAP/673/2009 2/ 8 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No.673 of 2009
To
TAX
APPEAL No.675 of 2009
===================================================
COMMISSIONER
OF INCOME TAX - Appellant(s)
Versus
R
SAMIR & ASSOCIATES - Opponent(s)
===================================================
Appearance
:
MR MR BHATT
with MRS
MAUNA M BHATT for the Appellant
None for Opponent(s) :
1,
===================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date : 20/07/2010
COMMON
ORAL ORDER
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
In each
of these appeals under Section 260-A of the Income Tax Act, 1961
(the Act), the appellant revenue has proposed the following two
questions in relation to the Assessment Years 1994-95, 1995-96 and
1996-1997 respectively:
Whether
the Appellate Tribunal is right in law and on facts in dismissing
the appeal of the revenue on technical ground that the Assessing
Officer has no power to refer the matter to the DVO as per the
provisions of of the Income Tax Act, 1961?
Whether
the Appellate Tribunal is right in law and on facts in deciding the
appeal relying on the decision in the case of Amiya Bala Paul Vs CIT
262 ITR 407 (SC) when the case is not squarely applicable to
this case in view of the new Section 142A of the I.T. Act, 1961
inserted with retrospective effect from 15/11/1972?
The
Assessing Officer framed assessment under Section 143(3) read with
Section 147 and 145 (3) of the Act, making addition under Section 69
of the Act to the tune of Rs.64,119/- in relation to Assessment Year
1994-95, Rs.11,31,041/- in relation to Assessment Year 1995-96 and
Rs.34,43,500/- in relation to Assessment Year 1996-97. The assessee
carried the matter in appeals before Commissioner (Appeals) and
succeeded. Revenue preferred appeals before the Tribunal but failed.
Assailing
the impugned order, the learned Senior Advocate appearing for the
appellant-revenue submitted that in the light of the insertion of a
new section 142A in the Income- tax Act, 1961, the effect of the
decision of the Supreme Court of India in the case of Amiya Bala
Paul Vs CIT, 262 ITR 407 (SC), has been nullified. The Tribunal
was, therefore, not justified in placing reliance on the said
decision.
The
undisputed facts of the case are that the assessee, who is a
builder, filed returns of income for Assessment Years 1994-95,
1995-96 and 1996-1997 respectively, which were accepted under
Section 143(1) of the Act. In relation to Assessment Year 1995-96
assessment was completed under Section 143(3) of the Act vide order
dated 31.03.1998. The Assessing Officer vide letter dated 11.02.1999
referred the matter to the District Valuation Officer (DVO) under
Section 131(1)(d) of the Act for determining the fair cost of
construction. The DVO submitted his report vide letter dated
04.02.2000 determining the fair cost of construction of the property
at Rs.2,60,59,762/- as against the cost of construction of
Rs.1,76,35,337/- as declared by the assessee. Upon receipt of the
valuation report, the Assessing Officer issued notice under Section
148 of the Act in relation to all the three assessment years. The
assessee filed returns of income on 19.06.2001 for all the three
years without modifying the income declared in the original returns.
The assessments were completed under Section 143(3) read with
Sections 147 and 145(3) of the Act on 27.02.2004 in respect of all
the three assessment years. The Assessing Officer made addition
under Section 69 of the Act for all the three years by computing
difference between the cost of construction reported by the DVO and
that declared by the assessee as the undisclosed income.
As can
be seen from the order made by Commissioner (Appeals), Commissioner
(Appeals) has observed that the reference made by the Assessing
Officer under Section 131(1)(d) of the Act was invalid in view of
the settled position of law. That the provisions of Section 131(1)
of the Act can be invoked only when a proceeding is pending with the
Assessing Officer or with the authority concerned. That no
proceeding is pending with reference to all the three assessment
years. Placing reliance upon the decision of the Supreme Court in
case of Amiya Bala Paul Vs CIT (supra), Commissioner
(Appeals) held that neither can the Assessing Officer refer to the
Valuation Officer the question of cost of construction of a house
property built by the assessee nor had the Valuation Officer any
jurisdiction to submit the report to the Assessing Officer under the
Act, except where a reference is made under Section 55A or to a
competent authority under Section 269L of the Act.
Before
the Tribunal the assessee had placed reliance upon the decision of
the Tribunal in the case of M/s. Ankur Associates as well as
in case of Umiya Co-operative Housing Society Limited wherein
the Tribunal had held that when on the date of making reference for
valuation to the DVO, no proceedings are pending before the
Tribunal, reference under Section 131(1)(d) of the Act cannot be
made by the Assessing Officer. The Tribunal found that the facts of
the present case are identical to the facts of the case on which
reliance had been placed on behalf of the assessee, and following
the same, confirmed the order made by Commissioner (Appeals) and
dismissed the appeal of the revenue.
It is an
accepted position that the decision of the Tribunal in the case of
Umiya Co-operative Housing Society Limited came to be
challenged by the revenue before this Court by way of appeals being
Tax Appeals No.1496 to 1498 of 2005, which came to be dismissed vide
judgment and order dated 12.7.2006. In the circumstances, in the
light of fact that the Tribunal has merely followed the decision of
this Court in the case of CIT v. Umiya Cooperative Housing
Society Limited (supra) after recording a finding of fact to the
effect that the facts of the present case are identical to the facts
of the said case, it cannot be stated that the impugned order of the
Tribunal gives rise to any question of law, much less a substantial
question of law.
During
the course of hearing a contention was raised to the effect that the
valuation report, even if invalidly obtained, would constitute a
piece of information and could be used as such for the purposes of
re-opening. It is not necessary to go into the said aspect for the
simple reason that in each of the three years under consideration
notices under Section 148 of the Act have admittedly been issued
beyond a period of four years and the case would thus be governed by
the Proviso under Section 147 of the Act.
In the
light of the aforesaid, it is not possible to state that the
impugned order of the Tribunal suffers from any legal infirmity so
as to warrant interference. In absence of any question of law, the
appeals are dismissed.
Registry
to place a copy of this order in connected matters.
Sd/-
[D. A.
MEHTA, J]
Sd/-
[
H.N.DEVANI, J]
***
Bhavesh*
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