TaxTMI 
TaxTMI 
2007 (5) TMI 274
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....g addition of Rs. 24,25,363 made under section 69 on account of undisclosed investment in the property; 2. reference to DVO was not legal ignoring the proposed amendments in section 142A retrospectively with effect from 15-11-1972; and 3. the Assessing Officer was not right in adopting CPWD rates and to adopt PWD rates. 2. We have heard and considered the arguments advanced by the parties in view of orders of the lower authorities and the decisions relied upon by them. Ground Nos. 1 to 3 3. The relevant facts are that the assessee had filed its return of income on 23-12-1992 at nil. Initially, the assessment was completed under section 143(3) on 23-3-1998 on the total income of Rs. 30,69,850. During the year, the ....
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....ran Mal v. Director of Inspection (Inv.) [1974] 93 ITR 505, there was no prohibition on Assessing Officer to use the material gathered by him in an illegal proceeding for making assessment. Thus, the report of the DVO, even if it was held illegal, was rightly used by the Assessing Officer. The learned Departmental Representative also referred provisions of section 142A of the Act with this submission that it has come into effect retrospectively from 10-11-1972 with this exception that the provisions shall not apply in respect of an assessment made on or before 30th day of September, 2004 and where such assessment has become final and conclusive on or before that date except in cases where reassessment is required to be made in accordance wi....
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....ith assertion that there was no pendency of assessment proceedings when reference under section 131(1)(d) was made by the Assessing Officer to the DVO. He informed that return was filed on 23-12-1992, which was processed on 27-3-1993. Reference to the DVO was made in January, 1994 vide letter No. 702, whereas the assessment for assessment year 1991-92 stood completed in December, 1993. The proceedings for assessment year 1992-93 under consideration were firstly completed under section 143(1)(a) on 27-7-1993. The action under section 148 was taken long thereafter vide notice dated 6-7-1995. Thus, as on the day when the reference was made to the DVO, there were no proceedings at all pending before the Assessing Officer so as to issue commissi....
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....nd correct on inspection by the learned CIT(A). The DVO had worked out the cost at Rs. 62,85,000, whereas the Assessing Officer, after taking into account the objection raised by the assessee, had valued the property at Rs. 56,39,509. The learned Authorised Representative placed reliance on the following decisions on the merits of the valuation : (1) Sarwanpal Singh Kanda v. ITO 21 Tax World 393 (Jp); (2) CIT v. Hotel Joshi [2000] 242 ITR 478 (Raj.); (3) CIT v. Ganesh Rice Mills [2005] 145 Taxman 452 (Punj.&Har.). (4) Dy. CIT v. Shakti Enterprises (P) Ltd. [2005] 97 TTJ (Jd.) 426; (5) Peerless General Finance & Investment Co. Ltd. (supra). 8. Considering the arguments advanced by the parties, ....
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....icer after the completion of assessment was invalid. We, thus, concur with the view of the learned CIT(A) in this regard that when assessment proceedings were not pending for the year in the present case, the Assessing Officer was not justified in making reference to the DVO to determine the cost of construction, hence the reference was invalid and, thus, the report furnished by the DVO. The first appellate order in this regard is, thus, upheld. 9. So far as the other submission of the learned Authorised Representative that the assessment order in the present case has reached its finality before 30-9-2004 as per the provisions of section 142A of the Act is concerned, we do not agree with him, because under the wordings of proviso to sect....
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....s finding authority the assessment order cannot be said to have reached its finality. We, thus, do not concur with the decision of the first appellate authority on the issue that the reference to DVO could not have been made to DVO by the Assessing Officer. However, this finding has become academic only in view of aforesaid finding that in absence of pendency of assessment proceedings, the Assessing Officer was not justified in making reference to the DVO for determination of the cost of construction. 12. So far as merit of the case is concerned, we find substance in the submission of the learned Authorised Representative that without pointing out specific defects in the books of account or rejecting the books of account, reference could....