TaxTMI 
TaxTMI 
2012 (9) TMI 983
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....ment year 2006-07. 3. The department has raised following substantial questions of law:- "(1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in deciding the cross-objection of the assessee first which only raised a factual controversy and on that basis rejecting the appeal of the department without deciding the controversy raised in the departmental appeal on merits? (2) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in deciding the cross-objection filed by the assessee in its favour by relying upon its own decision in I.T.A. No. 563/A/2000 and I.T.A. No. 151 & 152/Luc/03 in the case of Dy. C.I.T. vs. M/s Rohtas Projects Ltd, Lucknow despite th....
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....a developer engaged in the business of construction and sale of buildings. During the assessment year 2006-07 the assessee incurred expenses towards the cost of construction of various projects undertaken by it. The Assessing Officer referred the matter under Section 142-A of the Act to the District Valuation Officer (DVO) on 30.10.2007 to give an estimate of the cost of construction of the various projects undertaken by the assessee. The AO allowed the assessee to file objections to the report of DVO and thereafter finding that there is difference in the two projects of ₹ 5,75,368/- and ₹ 6,99,247/- respectively, in the cost of construction as submitted by the assessee before the AO, and the estimated expenditure under Section ....
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....bunal, Allahabad Bench, Allahabad. The Tribunal, relying upon M/s Dy. CIT Vs. M/s Rohtas Projects Ltd., Lucknow in I.T.A. Nos. 563 (Alld)/2000 and ITA Nos. 151 & 152 (Luc)/2003 relating to the assessment years 1995-96, 1996- 97 & 1997-98 dated 14.7.2010, dismissed the appeal filed by the department and partly allowed the appeal filed by the respondentassessee. The Tribunal followed the judgment in M/s Dy. CIT Vs. M/s Rohtas Projects Ltd., Lucknow (supra) in arriving at a conclusion as follows:- "6.2 It is true that for the purpose of making addition towards unexplained investment, the AO was under legal obligation to verify the books and vouchers maintained by the assessee in support of the cost of construction shown by the assessee a....
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....urt held that the report of the DVO suffered from material defects and the Revenue has not pointed out a single instance of unrecorded expenditure, addition under section 69B made only on the basis of DVO's report could not be sustained. The Hon'ble jurisdictional High Court in the aforesaid case also held that if the assessee maintained books of account in the regular course of business and necessary entries relating to the expenditure towards cost of construction are entered in the books of account, which are open to verification and its correctness is not doubted, it should be accepted. The Hon'ble High Court further held that in case of doubt the assessing authority can refer the matter to the Valuation Cell for determinatio....
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.... Court held that the Assessing Officer can refer the matter to the DVO only if he rejects accounts. The judgment is quoted as below:- "1. Delay condoned. 2. Leave granted. 3. By consent, the matter is taken up for final hearing. 4. In the present case, we find that the Tribunal decided the matter rightly in favour of the assessee inasmuch as the Tribunal came to the conclusion that the assessing authority could not have referred the matter to the Departmental Valuation Officer (DVO) without the books of account being rejected. In the present case, a categorical finding is recorded by the Tribunal that the books were never rejected. This aspect has not been considered by the High Court. In the circumstances, reliance placed on the repo....
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....ion 56, in Section 142-A by the Finance Act, 2010 w.e.f. 1.7.2010, a reference could be made by the AO to the Valuation Officer in respect of the value of any bullion, jewellery or other valuable article referred to in Section 69A or Section 69B. The valuation of the property through DVO was included in Section 142A w.e.a. 1.7.2010. 12. Under Section 69B a reference could be made to the DVO where the assessee had made investments, or is found to be the owner of any bullion, jewellery or other valuable article, and the AO finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for ....