TaxTMI 
TaxTMI 
2011 (8) TMI 1038
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....03-04 and 2005-06 u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961(hereinafter referred to as "the Act") vide his separate orders dated 22.12.2008. For the sake of brevity and clarity, we dispose of both these appeals and cross objections by this consolidated order. 2. First, we will take up Cross Objections of assessee. In all these Cross Objections whereby assessee raised only common legal issue that without rejection of books of account, reference made by Assessing Officer to DVO for estimating cost of construction is vitiated by law. For this, the assessee has raised exactly identically worded and common ground, which is as under: "That without rejection of the books of accounts by the Ld. A.O. reference to the DVO is not valid." 3....
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....wed a sum of ₹ 1 lac for preliminary expenses being capital in nature and further made addition of small discrepancies of ₹ 284/- and ₹ 2880/- as found in details of cost of construction of factory building. Subsequent to completion of assessment, Assessing Officer received DVO's report on 28.7.2005 and on the basis of same, Assessing Officer reopened assessments for Assessment Year 2002-03, 2003-04 and 2005-06 in view of difference in investment declared by assessee in returns of income and cost of construction as estimated by DVO as under: Period Investment declared by the assessee Estimated cost of construction 2000-01 Rs.37,000.00 Rs.53,734.00 2001-02 Rs.63,27,923.00 Rs.91,89,786.00 2002-03 Rs.66,11,126.00 ....
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....hey should not be rejected because they are complicated. The procedure of the Assessing Officer is of a judicial nature and in making assessment he should proceed on judicial principles. If evidence is produced by the assessee in support of his return it should be accepted unless it is rebutted by other admissible evidence and not by mere hearsay. As the Assessing Officer examines the accounts of an assessee, he has to consider the following questions:- (1) Whether the assessee has regularly employed a method of accounting? (2) Even if regular adoption of a method of accounting is there, whether the annual profits can properly be deduced from the method employed? (3) Whether the accounts are correctly maintained? (4) Whether the account....
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....hether he has been regularly employing a method of accounting or whether his income, profits or gains can properly be deduced from his method of accounting if he has been regularly employing a method of accounting or whether the accounts are correct and complete, and the Assessing Officer's decision on these matters is not to be a subjective or arbitrary decision but a judicial decision and cannot be accepted if there is no material to support his findings. As in present case, the AO referred cost of construction to DVO without rejection of books of account, which is not as per established legal propositions. Hon'ble Apex Court in the case of Sargam Cinema Vs. CIT (2010) 328 ITR 513(SC) held as under:- "In the present case, we find that th....
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....an expert and is admissible, but there must be a finding by the Income-tax Officer that the books of account maintained by the assessee are defective or are not reliable. There may be a marginal difference in the actual investment and the report of the Valuation Officer for a number of reasons as the valuation report is prepared on the basis of norms prescribed by the C. P. W. D. for the construction of buildings and the difference may be with regard to quality of the materials, etc. The Income-tax Officer could have examined the matter in detail with regard to the books of account in order to say that the books are not reliable. Simply because the valuation report is of a higher amount, the books cannot be said to be unreliable unless, by ....