2006 (1) TMI 128

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.... The construction of a house was spread over from the financial years 1992-93 to 1998-99 progressively. The assessee has shown investment made by him in the construction of a house in the books of account for each year. The total construction cost according to the books of account of the assessee came to be Rs. 16,21,484. For the first time, during the assessment year 1997-98, the Income-tax Officer referred the question about valuation of property under construction to the Departmental Valuation Officer because the assessee has not produced the valuation report from an approved valuer about the house under construction. On the basis of the report of the Departmental Valuation Officer, proceedings for reassessment were initiated for the ass....

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....hich the Assessing Officer could have framed his own opinion. It is, however, true that the opinion about escapement of income from tax must be of the Assessing Officer alone and of none else. It is also trite to say that the sufficiency or adequacy of material on the basis of which such opinion is formed cannot be a ground for formation of reason to believe. At the same time, it is equally true that the material on the basis of which such opinion is framed must have some relevant nexus with the formation of opinion about escapement of income from tax. The opinion cannot be formed on non-existent material or wholly irrelevant and extraneous material. To that extent exercise of jurisdiction by the Assessing Officer is justiciable, apart from....