2016 (2) TMI 295

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....ssessment proceedings u/s 147/148 of the Act purely on the basis of the DVO's report and consequently holding the reassessment proceedings initiated by the AO was invalid." 3. Facts of the case in brief are that the assessee filed his return of income on 31.07.2007 declaring an income of Rs. 15,07,093/- which was assessed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act) at an income of Rs. 53,57,090/- on 21.12.2009. During the course of assessment proceedings, the AO referred the matter to the DVO u/s 55A of the Act. However, the assessment had to be completed being the time barring matter, without considering the valuation report in respect of the property located at J-6, 1st Floor, NDSE, Part-I, New Delhi and....

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.... Singh (2008) 22 SOT 156 (Del.) it was held that assessment cannot be reopened for taxing capital gains in respect of an asset on the basis of its market value as estimated by the DVO. In case of ITO vs. Bholanath Majumdar 137 CTR 198 (Gau), it was held that a valuation report is only an opinion of the valuer. It is further stated, that, the same can neither amount to information nor a reason to believe that any income has escaped assessment. In the context of section 147 as it exists today, the Hon'ble High Court has held that "No Completed Assessments" can be re-opened on thebasis of the valuation report obtained by the Assessing Officer u/s 55A, after that assessment was completed. 5.2 It is a well settled law, that any chal....

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....that as it may, having called for a report of the DVO, the Assessing Officer cannot pass a reassessment order purely on the basis of the DVO's report. This is because at the end of the day, the report of the DVO is only an opinion. Undoubtedly, it is an opinion by an "expert" but it must be collaborated with some other document to justify the re-assessment order. It is for this reason, that the Division Bench of Madras High Court in Commissioner of Incometax vs. V.T. Rajendran (2007) 288 ITR 312 (Mad) has held that purely on the basis of DVO's report reassessment order cannot be passed. This Court is in full agreement with the law cited by the assessee in Commissioner of Income-tax Vs V.T. Rajendran (2007) 288 ITR 312 (Mad) and hold....

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.... 7. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the reopening was done by the AO only on the basis of the valuation report received from the office of the DVO. On a similar issue the Hon'ble Apex Court in the case of ACIT Vs Dhariya Construction Company 328 ITR 515 (supra) held as under: "Having examined the record, we find that in this case, the Department sought reopening of the assessment based on the opinion given by the District Valuation Officer (DVO). The opinion of the DVO per se is not an information for the purposes of reopening assessment under section 147 of the Income-tax Act, 1961. The Assess....