TaxTMI 
TaxTMI 
2012 (10) TMI 619
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.... required for invoking the provisions contained in Section 147 of the Income Tax Act, 1961, nor complying with the statutory provisions contained in Section 148 of the Income Tax Act, 1961 and as such the instant assessment framed was wholly untenable and unsustainable in law? 2. Whether the opinion given by DVO perse is not an information for the purposes of re-opening an assessment for the purposes of Income Tax Act and the assessment can only be reopened when the Assessing Officer has applied its mind to the information, if any, collected and must form a belief thereon? 3. Whether the Assessing Officer can refer the matter to DVO without the Books of Accounts being rejected and the opinion of DVO perse can be said to be an information for the purpose of reopening of assessment under Section 147? 4. Brief facts giving rise to these two appeals are as follows. Assessment Year 1998-99 5. For the assessment year 1998-99 the assessee filed the return on 31.3.1999 declaring 'nil' income. The assessment under Section 143 (3) of the Act was completed on 26.3.2001 at nil income, with Assessment Officer (A.O) mentioning that the assessee filed required details, information and docume....
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....d by the assessee (as mentioned in letter dated 28.02.2001) was Rs. 39.50 per cubic meter, payment has been made by the assessee to tractor owners on hourly basis for reasons best known to the assessee. (v) Since the earth work involved in the development of site was enormous, it is not possible that the assessee had invited single quotation for Rs. 39.50 per cubic meter. In the light of above comments, investments declared by the assessee on the development work are doubtful and are not acceptable to measurement. 2. As per terms and conditions of the IDBI, the company shall pay to IDBI up-front fee @ 1.05% of the amount sanctioned before or on execution of loan agreement. The company was sanctioned total loan of Rs. 8.5 crore by the IDBI on which total up-front fee has to be paid @ 1.05% which comes at Rs. 8,92,500/- but the assessee company has paid this fee at Rs. 12,50,000/-. Thus, the company has paid excess up-front fee by Rs. 3,75,500/-, which should be added in the income of the assessee company. 3. The share application money as on 31.03.1997 was at Rs. 16,66,000/- and as on 31.03.1998 was at Rs. 2,57,19,000/-. There is increase in the share application money by Rs. 1,1....
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.... on the basis of the valuation report dated 27.12.2001 proceedings under Section 147 were initiated to reopen the case for reassessment. The reasons have been quoted above in respect of assessment year 1998-99. 10. In respect of assessment year 1999-2000 the notice under Section 148 was issued on 10.1.2002, which was served on 16.1.2002. In compliance the assessee filed return of income on 12.2.2002 declaring 'nil' income, which was processed under Section 143 (1) on the same day. The assessee requested on 15.4.2002 to supply the copy of reasons for taking action under Section 148. A copy of the order recording the reasons was provided to the assessee. By a notice under Section 142 (1) dated 26.4.2002 the assessee company was required to justify the investment on land, site development, building and civil and other works. The objections were filed by the assessee on 15.5.2002 for taking action under Section 147 of the Act, which were rejected by the AO on 14.2.2003. The AO completed the assessment on the total income of Rs.27,95,440/- with an order to charge interest under Section 234-B and 234-C as per law and to issue notice, demand and challan as per I.T.N.S.-150. The AO also....
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....verifiable and was doubtful. 13. The Tribunal found that Section 147 regarding "income escaping assessment" precedes with the words "if the Assessing Officer has reason to believe". The Tribunal referred to the amendment made in section 142-A in Income Tax Act by Finance (No.2) Act, 2004 retrospectively w.e.f. 15.11.1972 providing under sub-section (1) that where an estimate of the value of any investment is required to be made, the AO may require the valuation officer to make such an estimate and report the same to him. Such a report may be used for making an assessment or a reassessment under the Act. He found that the decision in the case of Amiya Bala Paul vs. CIT (2003) 262 ITR 407 stands superseded by this retrospective amendment as the valuation officer has been empowered to make valuation of any investment and since the notice under Section 148 was issued prior to expiry of four years from the end of assessment, the AO was justified to take action on the basis of the opinion of DVO. 14. Shri P.K. Jain appearing for the assessee-appellant has relied upon the Supreme Court judgments in Sargam Cinema vs. Commissioner of Income Tax (2010) 328 ITR 513 (SC). The short judgment....
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....construction. By this time no manufacturing activity and no business had been carried out. The AO referred the matter to District Valuation Officer of Income Tax Department, 3-Tolstoy Marg, New Delhi on 10.11.2000, mechanically for correct valuation of the property. This report did not provide any figure or even a rough estimate quantifying the expenditure. The DVO had only referred to some lacuna in the methodology of getting the work done. He expressed his doubts on the expenditure on the ground that the height of the levels, for which the earth filling work was done, was not provided; the work was done without calling for single quotation; the truck owners were not paid on cubic meter basis and concluded that the expenditure shown in the books was not verifiable. According to DVO, the investment shown was doubtful and were not acceptable to measurements. It is on this information, that the AO reopened the assessment and recorded his reasons on 10.1.2002, in which he relied upon the report dated 27.12.2001 and served notices from the assessee under Section 148 to which the objections were filed and were rejected. The DVO sought time for valuation vide letter dated 20.2.2002. He s....