2004 (4) TMI 45

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....ssessment year 1999-2000 (annexures 6 and 9). Heard learned counsel for the parties. The facts of the case are that Girdhar Gopal Gulati, Sat Pal Gulati and Jagdish Kumar Gulati are real brothers who derive income from property. The petitioner, Girdhar Gopal Gulati, has a 1/3rd share in the property at 199, Transport Nagar, Kanpur-24, Chak Road, Allahabad, and United Tower at 2/1/3, Minhazpur Garhi, Allahabad. In the assessment year 1994-95, the petitioner along with his two brothers started construction of the building at Minhazpur Garhi, Allahabad, and the construction was completed in the assessment year 1998-99. The total required investment made in the construction of the building from the assessment year 1994-95 to the assess....

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....e value of the investment in property No. 2/1/3, Minhazpur Garhi, Allahabad, after calling for and in accordance with the report of the Valuation Cell vide annexure 2. Against the order of the Commissioner under section 263, the petitioner and his two brothers filed appeal before the Income-tax Appellate Tribunal, Allahabad, which was dismissed on October 18, 2002. Against this order two appeals were filed in this court which had been admitted and operation of the order of the Commissioner of Income-tax (Appeals) has been stayed. In the meantime in compliance with the order of the Commissioner of Income-tax under section 263 the District Valuation Officer in the Department prepared a valuation report and determined the value of the in....

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....asons to believe recorded by the Assessing Officer. Thereafter the Assessing Officer in August and September, 2003, supplied to the petitioner a copy of the reasons to believe vide annexures 10, 11 and 12. A perusal of copy of the reasons to believe under section 147 for the assessment year 1996-97 (annexure 10) to the petition shows that the valuation report was obtained by the Assessing Officer and on this basis he has issued notice under section 148. In para. 9 of the counter-affidavit it is stated that the District Valuation Officer of the Income-tax Department determined the value of the investment made by the petitioner and his brothers in the building 2/1/3, Minhazpur Garhi, Allahabad. In paras. 11 and 19 of the counter-affidav....

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....Moreover, in Smt. Amiya Bala Paul v. CIT [2003] 262 ITR 407, it has been held by the Supreme Court that in assessment proceedings the Assessing Officer cannot refer to the Valuation Officer the question of the cost of construction of the property built by the assessee. Hence, in view of this decision of the Supreme Court, the impugned notices and assessment proceedings are illegal. We may also mention that so far as the decision of the Supreme Court in Smt. Amiya Bala Paul's case [2003] 262 ITR 407 is concerned, this would invalidate the notices for all three assessment years which are concerned, i.e., 1996-97, 1997-98 and 1999-2000. However, we may also mention that with regard to the assessment years 1997-98 and 1999-2000, the assessme....