ORDER
Hari Om Maratha, J.M.
1. This appeal by the Department is against the findings of the CIT(A) given in order dt. 19th May, 2000, for the asst. yr. 1993-94.
2. The assessee had filed return for this year declaring nil income on 23rd Jan., 1993 and the same was processed under Section 143(1)(a) of the IT Act, 1961 (hereinafter referred to as ‘the Act’ for short), on 23rd Jan., 1993. Thereafter, action under Section 132 of the Act was taken by the Department on 29th Nov., 1994. During the course of search, no incriminating documents, etc. were found. The AO initiated reassessment proceedings by issuing notice under Section 148 of the Act only on the basis of Valuation Officer’s report, wherein the cost of construction was estimated more than declared by the assessee. There is no dispute with regard to the fact that reference to the Valuation Officer was made when no assessment proceedings were pending before the AO for this year. It is also undisputed fact that no evidence was found during the course of search. The assessee had also declared investment in the hotel building during this year in the returns of income. The assessee had invested a sum of Rs. 11,64,862 for the asst. yr. 1993-94. The assessee had also maintained books of account in which investment in the construction of hotel building was also shown. The assessee has furnished return on 1st Sept., 1993 on the basis of books of account and the return was accepted under Section 143(1)(a) of the Act much before the date of search. A survey was also conducted at the residential premises of the partner of the firm and hotel premises. Therein also, no incriminating evidence was found.
3. The CIT(A) cancelled the assessment order passed in pursuance to notice under Section 148 of the Act. Relying on various decisions including the decisions of the Hon’ble Rajasthan High Court in the case of CIT v. Pratapsingh Amrosingh Rajendra Singh & Deepak Kumar and CIT v. Hotel Joshi .
4. We have heard both the parties and given our thoughtful consideration to rival submissions with reference to facts, evidence and material on records.
5. We have already stated the undisputed facts of this case. The only basis of reopening of the assessment in this case is the Valuation Officer’s report which was referred to DVO after the assessment order was passed. It is by now a settled principle of law that the valuer’s report does (not) constitute information and cannot form the basis of reopening of an assessment under Section 147(b) of the Act. The learned Authorised Representative, Shri U.C. Jain, has relied on the decisions which are also relied (on) by the learned CIT(A) and has further relied on the decision of the Hon’ble Madhya Pradesh High Court in the case of Prakash Chand v. Dy. CIT (2004) 188 CTR (UP) 576, inter alia. In this case the assessee had filed the returns and had declared cost of construction during this year and the assessment order had already been completed. In search/survey operations, no evidence worth the name was found against the assessee. The learned Departmental Representative, Shri O.P. Choudhary, has fairly admitted the above factual facts. The only vehement argument of the learned Departmental Representative is that the amended provisions of Section 147 of the IT Act after 1st April, 1989, have very wide scope, so as to include even the report of the DVO in case it is revealed that income chargeable to tax has escaped assessment. But even after amendment, there has to be valid reason for reassessment proceedings which can be equated with escapement of income chargeable to tax. In this case, by virtue of clear-cut decisions of the Hon’ble jurisdictional High Court and other decisions referred to above, a valuer’s report cannot be a information which can attract under Section 147(b) of the Act. So, we confirm the findings of the CIT(A) and there is no valid reason of reopening and there is no concealment of income.
6. In the result the appeal is dismissed.