TaxTMI 
TaxTMI 
2015 (2) TMI 446
X X X X Extracts X X X X
X X X X Extracts X X X X
....e case the ld. CIT(A) was not justified in confirming the reopening of assessment u/s 147 of the Income tax Act, 1961 as there was no material on record that any part of the income of the Appellant has escaped assessment. The said addition of Rs. 1,46,700/- made by the I.T.O. was merely on the basis of surmise and conjecture. 3. For that, on the facts, both the Authorities below erred both in points of law and on facts. 4. For that the Appellant craves leave to take further and/or additional grounds at the time or before hearing of this appeal petition if necessary." 3. From the above grounds we note that the issues raised are two fold. Firstly the assessee has pleaded that re-assessment was bad; secondly it has been urged that the addition on account of undisclosed investment amounting to Rs. 15,46,700/- is not sustainable. 4. We shall deal with the first issue. The brief facts on this issue are that the assessee and his father purchased two flats from the promoter M/s.G.G.Developers one each on 3rd floor covering built up area 2595 sq.ft. in the name of the assessee and 4th floor having built up area of 1127 sq.ft in the name of assessee's father. The booking mone....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Valuer who prepared the report on behalf of the assessee is not a paneled valuer of CBDT. 4. The valuer has not followed the guidelines of CBDT during the preparation of the Valuation. Hence the recommendation in the report cannot be accepted by this office." 5.2. Considering the above, I am of the considered view that the valuation report of the Departmental Valuation Cell is more authentic and acceptable. The AO on the basis of such report has determined the value of the impugned properties. In such circumstances, I find no plausible reason to differ from the AO's determination of value of the impugned properties and resultant undisclosed investment in such properties. The addition made on account in the sum of Rs. 15,46,700/- is, therefore, upheld. Ground No.5 is dismissed." Against the above order assessee is in appeal before us. 6. We have heard the rival contentions and carefully perused the records. Before proceeding further in this case we gainfully refer to the reasons for reopening recorded in this case which is as under :- "Date : 18.11.2010 The assessee submitted his return for A.Y.2005-06 on 20/12/2005 disclosing a total income of Rs. 3,16,659/-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at nothing contained in this section shall apply in respect of an assessment made on or before the 30th day of September, 2004, and where such assessment has become final and conclusive on or before that date, except in cases where a reassessment is required to be made in accordance with the provisions of section 153A." 6.2. Further we may also refer to the decision of the Hon'ble Gujarat High Court in the case of Goodluck Automobiles Pvt.Ltd. vs ACIT 359 ITR 306 where in connection with the above said section the Hon'ble Court has expounded as under :- "On a conjoint reading of the provisions of section 69 and section 142A of the Income- tax Act, 1961, it appears that for the purpose of resorting to the provisions of section 142A of the Act, the Assessing Officer would first be required to record a satisfaction that the assessee has made investments which are not recorded in the books of account. As a necessary corollary, he would then reject the books of account as not reflecting the correct position and then proceed to make the assessment on the basis of estimation, for which purpose he can resort to the provisions of section 142A of the Act and make a reference to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee has made investment which are not recorded in the books of account. It is only when the AO is satisfied that assessee had made unrecorded investment and AO has rejected the books that the AO can invoke to the provisions of section 142A of the Act and make a reference to the Valuation Officer for estimating the value of such investment. Similar view has also been expressed by the Hon'ble Apex Court in the case of Sangam Cinema (supra) 6.5. In the present case in the assessment order there is no mention whatsoever as to how the AO was of the opinion that the investment by the assessee in the flats needs a reference to the Valuation cell for valuation. The AO has found that the investment was made into the flat in the name of the assessee and assessee's father. AO has also given a finding that except for a small amount of booking father has not made further investment and the bulk of the investment was made by the son. AO has drawn adverse inference on the basis that father was not aware of the actual investment. When the investment has been done by the assessee and the same is reflected in the assessee's books it is not understood as to how the father has t....