TaxTMI 
TaxTMI 
2014 (3) TMI 173
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich is material for the issue is as under : "The learned CIT erred in setting aside the order giving effect to the order of ITAT, that is passed after due deliberations on mere ground that the A.O. had not acted on the comments of the DVO though there is nothing in the comments of the DVO except reiterating the same values, when the directions of the Tribunal is to adopt market values after rejecting the values adopted by the DVO in the report, thereby taking a different view than the one that should be taken as per the orders of the ITAT." 3. Briefly stated, assessee is the Managing Director of M/s. Kalyani Gardau Steels Ltd. Assessee filed returns of income originally and consequent to proceedings under section 132, six assessment years have been re-assessed. One of the issues in re-assessment proceedings is the valuation of the property constructed by assessee over a period of time. A.O. in the course of assessment proceedings referred it to the Departmental Valuation Officer (Valuation Cell) which valued the building adopting CPWD rates. Aggrieved, assessee filed an appeal before the Ld. CIT(A) and after considering the submissions, the Ld. CIT(A) directed reduction of 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rked out percentage proportionately (in Rs.) 1. 1999-00 14.58% 3,13,648 2. 2000-01 25% 5,37,805 3. 2001-02 25% 5,37,805 4. 2002-03 16.66% 3,58,393 5. 2003-04 NIL NIL 6. 2004-05 6.25% 1,34,451 7. 2005-06 12.5% 2,68,902 Accordingly, A.O. passed the orders in respective assessment years. 5. The Ld. CIT-II, Hyderabad after examining the record, was of the view that A.O. has erred in giving relief relying on the quotations which are not placed earlier and not waiting for remarks of Valuation officer. He held that order of AO is erroneous and prejudicial to the interests of the Revenue and invoked the provisions under section 263 of the Act. The notice issued by Ld. CIT is as under : It is observed that the assessee furnished the quotations for purchase of marbles and bath tubs for the first time before the AO while giving effect to the order of ITAT against miscellaneous petition filed by the assessee. The assessee has not furnished the above mentioned information in all the earlier proceedings i.e. original assessment, appeal before the CIT(A) and before the ITA T. It is also observed that the assessee has not even produced before the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uring the proceedings to give effect to the order of the ITAT which was considered by the AO. The DVO adopted the market value of certain items without the knowledge of the assessee which was objected and the Assessing Officer has adopted the correct market value after giving an opportunity to the assessee. The quotations were obtained and were filed and no such quotations were with the assessee when the original assessment was made. The quotations were obtained to give effect to the ITAT's directions. The Learned Authorised representative also submitted that to buy peace, Assessing Officers order was accepted and no appeal was preferred. 6.1. After providing the copy of the report of the DVO dated 06.03.2013 to the assessee and obtaining the submissions from assessee, Ld. CIT was of the opinion that order of the CIT was erroneous and accordingly, he set aside the same with a direction to follow the directions of the ITAT strictly by adhering to the principles of natural justice. His final conclusions in para 8 are as under : "8. . . . . . I am conscious of the fact that adequate time is not given to the assessee to rebut the findings of the valuation officer in his lette....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 263 is bad in law. 8. Learned D.R further submitted that while implementing directions of the ITAT, the A.O. has taken reliance on the quotations obtained from two parties i.e., one from Stone World for marble quotation and another from M/s. Valuation Line Trade Pvt. Ltd. for bath tub valuation and these quotations obtained much later and there is no basis for adopting the values by the A.O. As rightly pointed out by the CIT, A.O. has not caused any enquiries to determine the market value as directed by the ITAT and therefore, the CIT was correct in invoking the jurisdiction under section 263. 9. We have considered the issue and examined the rival contentions. There is no dispute with the fact that the ITAT has directed the A.O. to determine the market value in respect of certain prices adopted for the items used in the construction on the basis of market value of those years, when there are no fixed quotations from the CPWD. Accordingly, the prices of white marble, Italian marble, Marble slabs cladding, bath tub etc., were adopted by the A.O. The order of the A.O. in determining these values for the sake of record is as under :- 10. As can be seen from the detailed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers maintained by the assessee or books of accounts. Therefore, we do not see any reason to set aside again to give one more opportunity and estimate the values again. Since, A.O. has already determined the same considering the DVO's original report, we are of the opinion that no further purpose would be served by setting aside the orders. As seen from the comments of the DVO also he did not vary from the earlier report. Therefore, ultimately, Assessing Officer's adoption of values would depend on the original values adopted by the DVO and the objections raised by the assessee, to determine the market values. Since the same exercise was undertaken by the A.O. we approve the same. Therefore, we have no hesitation in setting aside the orders of the CIT passed under section 263 of the Act in all the impugned assessment years and accordingly, assessee's appeals are allowed. 12. In the result, appeal of the assessee are allowed. Order pronounced in the open Court on 28.02.2014. ============= Document 1 Particulars AMOUNT AS RATE & PER VALUATION REPORT AS PER VALUE ADOPTED ASSESSEE'S CONTENTION THE (as discussed) RATE & AMT. Item....