https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=753906 https://www.taxtmi.com/caselaws?id=753906 Unexplained investment for construction of factory premises - Addition Based on Private Valuer s Report - valuation of construction was taken into account as per the report prepared by Registered Valuer during the search proceedings in presence of the Authorized Person/Representative of the assessee - whether the assessing officer can at the time of search / survey based on the physical appearance and without rejecting the books of account make a reference to the registered valuer or not? - HELD THAT:- When any reference is made by the Assessing Officer to the valuation officer us 55A, then the provisions of following sections of Wealth-tax Act, 1957, shall apply with the necessary modifications. Provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A of the Wealth-tax Act, 1957. Section 16A of Wealth- tax Act, 1957, is similar to section 55A of Income-tax Act. Section 16A of Wealth-tax Act, 1957, contains the provisions relating to making a reference to the valuation officer for making assessment under the Wealth-tax Act. Apart from the provisions of section 55A, section 142A also empowers the Tax Authorities to make a reference to a Valuation Officer. The provisions of section 142A empowers the AO for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including fair market value, of any asset, property or investment. Valuation Officer has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957. AO may make a reference to the Valuation Officer as above whether or not he is satisfied about the correctness or completeness of the accounts of the taxpayer. The Valuation Officer, on a reference made by the Assessing Officer, shall, for the purpose of estimating the value of the asset, property or investment, have all the powers that he has u/s 38A of the Wealth-tax Act, 1957. Valuation Officer shall, estimate the value of the asset, property or investment after taking into account such evidence as the taxpayer may produce and any other evidence in his possession gathered, after giving an opportunity of being heard to the taxpayer. Valuation Officer may estimate the value of the asset, property or investment to the best of his judgment. AO may, on receipt of the report from the Valuation Officer, and after giving the taxpayer an opportunity of being heard, take into account such report in making the assessment or re-assessment. But here we note that the addition has been made by the ld. AO without any supporting evidence or material found during the search operation and the addition was made only based on the private ( registered ) valuer for which the reference was made by the DDIT at the time of search and that report was obtained on the very next date of search. CIT(A) has considered the judgement of the CIT Vs. Nishi Mehra [ 2015 (3) TMI 156 - DELHI HIGH COURT] where in it was held that no addition can be made only on the basis of valuation report in the absence of any incriminating material or corroborative material to point out the under valuation of the property. DR did not bring any contrary judgment except relying the judgment of the Dhakeswari Cotton Mills Ltd. Vs. CIT [ 1954 (10) TMI 12 - SUPREME COURT] for which the ld. AR has filed a distinguishing note submitting that that decision is pari materia on difference facts. In the light of the discussion so recorded we see no merits in the arguments raised by the revenue considering the facts circumstances discussed here in above the ground no. 1 2 challenging the addition stands dismissed. Case-Laws Income Tax Thu, 18 Jan 2024 00:00:00 +0530