2006 (9) TMI 130

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....ppellate Tribunal erred in holding that the report of the Departmental Valuer for determination of cost of construction was binding on the Assessing Officer irrespective of the fact that regular books of account for cost of construction were maintained by the assessee? 2. Whether the Tribunal was right in confirming the orders of the lower authorities even though no positive contrary evidences were brought in by the Assessing Officer for rejecting the books of account of the assessee maintained for the purpose of cost of construction? 3. Whether, the report of the Departmental Valuer would become final and binding on the Assessing Officer while the petition for objection to the basis of valuation of cost of construction was pending before....

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....uction method for determination of the cost of construction. The assessee also pointed out that the costs of building materials as well as labour charges were much less in Dhubri than in other bigger cities. It was also pleaded that 10 per cent. margin should have been allowed for personal supervision. The Commissioner of Income-tax (Appeals) considered the submission of the assessee and held that the cost of construction as worked out by the Valuation Officer is reasonable considering the type of construction, materials used, value of the furniture and fixtures. The Commissioner of Income-tax (Appeals), however, directed the Assessing Officer to reduce the cost of construction by 10 per cent. for self-supervision. The assessee preferred an....

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....987, and it should not have been reopened and referred to the Valuation Officer. Referring to the provisions in section 34 of the Indian Evidence Act, it has been argued that the books of account, not being deprecated, should not have been rejected. Mr. Bhuyan, learned counsel for the Revenue, submitted that the valuation report was called for before reopening of the assessment, and proceedings were initiated under section 147 after perusal of the valuation report. The reopening, according to Shri Bhuyan, was within the powers of the Assessment Officer since he had a reason to believe from the valuation report that income chargeable to tax has escaped assessment. Mr. Bhuyan further argued that both the Commissioner of Income-tax (Appeals) ....

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....vailable before the assessment. In the instant case, the proceeding has been initiated under section 147 after completion of the assessment and therefore notices were issued under section 148. In response, the assessee submitted that the Assessment Officer could not reopen the assessment on the basis of the report of the Valuation Officer for initiation of proceedings under section 147. The opinion of the Departmental Valuer cannot be treated as a reason conclusive to form the belief as contemplated in section 147. The learned single judge of this court held that a valuation report is only an opinion of the valuer and the same cannot form a ground for reason to believe for initiation of a proceeding under section 147 of the Act. Before is....