Court upholds Assessing Officer's authority to issue commission for local inspection in construction cost assessment

The court dismissed the writ application challenging the order of the Assistant Commissioner of Income-tax on the cost of construction. It was held that the Assessing Officer had the authority to issue a commission for local inspection under section 131(1)(d) of the Income-tax Act, despite limitations on referring to the Valuation Officer for determining construction costs during assessment, as clarified by the Supreme Court judgment and statutory provisions.

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Issues:
1. Quashing of order passed by Assistant Commissioner of Income-tax regarding cost of construction.
2. Power of Assessing Officer to ask Valuation Officer for cost of construction during assessment.
3. Interpretation of Supreme Court judgment in Smt. Amiya Bala Paul v. CIT.
4. Authority of Assessing Officer to issue commission for local inspection under section 131(1)(d) of the Income-tax Act.

Analysis:
1. The writ application sought to quash an order regarding the cost of construction issued by the Assistant Commissioner of Income-tax. The issue revolved around whether the Assessing Officer had the authority to request the Valuation Officer to provide information on the cost of construction during assessment proceedings.

2. The main question was whether the Assessing Officer could ask the Valuation Officer to elucidate on the cost of construction during assessment. The petitioner cited the Supreme Court judgment in Smt. Amiya Bala Paul v. CIT, arguing that such reference to the Valuation Officer was impermissible unless for specific purposes as mentioned under the Income-tax Act.

3. Referring to the case of Smt. Amiya Bala Paul v. CIT, the Tribunal had allowed the appeal stating that the Assessing Officer should not have referred the cost of construction to the Valuation Officer. The Gauhati High Court held that the Assessing Officer had the power under sections 131(1), 133(6), and 142(2) to ask for a valuation report. However, the Supreme Court clarified that section 55A of the Act dealt with capital gains and the circumstances for reference to the Valuation Officer were specific, which did not include ascertaining the cost of construction during assessment.

4. The apex court ruled that while the Assessing Officer could not call for an inquiry report under section 55A, they could issue a commission to the Valuation Officer under section 131(1)(d) of the Act. The court highlighted the provisions of Order XXVI, rule 9 of the Code of Civil Procedure, allowing for commissions for local investigations. In this case, a commission was issued to the Valuation Officer under section 131(1)(d) read with Order XXVI, rule 9, and the impugned order was upheld as valid.

In conclusion, the writ application was dismissed, affirming the authority of the Assessing Officer to issue a commission for local inspection under section 131(1)(d) of the Income-tax Act, as clarified by the Supreme Court judgment and relevant legal provisions.

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