2010 (7) TMI 786

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....appellate authority deleting the addition of Rs.4,36,780 made as income from undisclosed sources on account of difference between the cost of construction declared by the assessee and that estimated by the DVO ?   2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in upholding the order of the first appellate authority deleting the disallowance of interest attributable to borrowed money utilized for purchase of machinery which was not put to use during the year under con- sideration ?"   2. Learned counsel for the Revenue fairly states that question No. 2 is covered against the Revenue in view of the judgment of the hon'ble Supreme Court in Deputy CIT v. Core Health ....

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....ating the matter against the Revenue, recorded that there was no justification for the Assessing Officer to refer the case of the assessee to the Valuation Cell as the building was still under construction. It was also recorded that the construction of two units of the factory building was mixed up and separate details were not available. The Tribunal had relied upon the decision of the Madras High Court in CWT v. S. Venugopala Konar [1977] 109 ITR 52 (Mad) to delete the addition.   6. Learned counsel for the Revenue submitted that even incomplete construction had the valuation and, therefore, the Tribunal was not justified in holding that in case of incomplete construction, the reference to the DVO was premature and that the judgment....

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....H), the Delhi High Court in CIT v. Sudhish Kumar [2005] 276 ITR 563 (Delhi), the Calcutta High Court in ITO v. Kajaria Investment and Properties P. Ltd. [2008] 297 ITR 45 (Cal) and the Allahabad High Court in CIT v. Smt. Shashi Agarwal [2007] 210 CTR (All) 205. Learned counsel further submitted that even if the judgment of the Madras High Court in S. Venugopala Konar's case [1977] 109 ITR 52 (Mad) was not applicable, yet there was no material before the Assessing Officer to reject the valuation declared by the assessee by appointing registered valuer.   8. We have given our thoughtful consideration to the respective submis- sions made by the learned counsel for the parties.   9. It would be advantageous to refer to section 142A ....

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.... the Act, an estimate is required to be made in respect of any investment referred to in section 69 or section 69B or the value of any bullion, jewellery or other valuable article, referred to in section 69A or section 69B, is required to be made, the Assessing Officer may refer the matter to the Valuation Officer for estimating the said value and reporting the matter to him. Sub-section (2) stipulates that the Valuation Officer to whom the reference is made under sub-section (1) shall, have all the powers similar to section 38A of the Wealth-tax Act, 1957, while dealing with such reference. According to sub-section (3), the Assessing Officer on receipt of report from the Valuation Officer may take the same into consideration while making a....