TaxTMI 
TaxTMI 
2021 (2) TMI 132
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....truction in F.Y.2009-10 at Rs. 18243000/-. 5. Subsequently the assessee filed another valuation report valuing the property at Rs. 12373168/-. 6. The reason for filing the second valuation report is that the first valuation report has erroneously made the valuation on 15.12.2012 whereas the second valuation report valued the property correctly as on 31.03.2010 which year is under consideration. 7. The Assessing Officer was convinced with the correctness of the second valuation report and accepted the cost of construction at Rs. 12382385/-. 8. Assuming the jurisdiction u/s.263 of the Act the Pr. CIT observed as under :- "On perusal of the assessment records, prima facie, it is noticed that the Assessing Officer, while completing assessment for the A.Y. 2010-11, has adopted the quantum of investment made in the construction of property No. B-493, New Friends Colony, New Delhi, during the Financial Year 2009-10, at Rs. 1,23,82,385/-. Further, it was also noticed that as per the valuation report for building cost of immovable property dated 15th December, 2012 of the registered valuer, filed by assessee on 18.12.2012, the fair market value of Building cost has been....
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....f the above mentioned property at Rs. 1,23,82,385/-, which was inclusive of additional expenses of Rs. 21,11,458/-. Thus, the AO has taken the value of construction at Rs. 1,02,70,927/- (1,23,82,385- Rs. 21,11,458), excluding of additional expenses of Rs. 31,11,458/-. It is clear from the above that valuation adopted by the AO is lower by Rs. 79,72,073/ - (Rs. 1,82,43, OOO-Rs. 1,02,70,927) and hence, the order passed by him is erroneous in so far as it is prejudicial to the interest of the revenue to the extent of income of Rs. 79,72,073/- 3. In view of above mentioned facts, it is evident that the assessment has been completed without due application of mind and requisite enquiry which renders it erroneous in so far it is prejudicial to the interest of the revenue. Therefore, the proceedings u/s 263 of the Income-tax Act, 1961 are hereby initiated. 4. Accordingly, you are allowed an opportunity of being heard and to attend the office of the undersigned either personally or through authorized representative with all necessary facts and details related to your case on 05/09/2014 at 3.00 AM/PM failing which the proceedings may be decided on merits without f....
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....ort submitted on 18.12.2012 should be ignored while framing the assessment in this case. The DR vehemently stated that the assessment record does not show that the AO made any query to the assessee to explain the difference in two valuation reports with documentary evidence relied upon in this regard. Reliance was placed on two decisions firstly in the case Toyota Motor Corporation 306 ITR 52 Hon'ble Supreme Court and secondly in the case of Shri Bhram Dev Gupta in ITA No.907/2017 C. M. APPL 38787/2017. 14. We have given a thoughtful consideration to the orders of the authorities below. It is a settled position of law that powers u/s 263 of the Act can be exercised by the Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revi....
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....ons of such claim. 7. No question of law arises. Tax Appeals are dismissed." 17. We find the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar reported in 335 ITR 83 has held that where it was discernible from record that the A.O has applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. Relevant observation of the High Court reads as under: "63. We find the Hon'ble Delhi High Court in the case of Vikas Polymer reported in 341 ITR 537 has held as under: "We are thus of the opinion that the provisions of s. 263 of the Act, when read as a composite whole make it incumbent upon the CIT before exercising revisional powers to : (i) call for and examine the record, and (ii) give the assessee an opportunity of being heard and thereafter to make or cause to be made such enquiry as he deems necessary. It is only on fulfilment of these twin conditions that the CIT may pass an order exercising his power of revision. Minutely examined, the provisions of the section envisage that the CIT may call for the records and if he prima facie considers that any order passed therei....