TaxTMI 
TaxTMI 
2022 (12) TMI 425
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....and prejudicial to the interest of the revenue", which is contrary to fact, on the facts and circumstances of the case. 4. The order passed under section 263 of the Act, was required to be set aside as void ab initio, since the initiation of 263 proceedings was on a borrowed satisfaction of the assessing officer and hence bad in law, on the facts and circumstances of the case. 5. The learned CIT is not justified in law in holding that the order passed by the Assessing officer is bad in law, without appreciating that there was no error in the order passed, much less prejudicial to the interest of revenue, on the facts and circumstances of the case. 6. The learned CIT failed to appreciate that the valuation of the building was accepted by the AU and hence there was no mention in the order passed, hence the AU has taken a possible view, thus there was no error in the order of assessment, on the facts of the case. 7. The learned CIT failed to appreciate that the requirement of referring to a valuation officer was not mandatory and optional, and the AU has chosen not to do the same, thereby has taken a conscious decision to accept the valuation as offered by the appellant, t....
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....r to bring to tax a sum of Rs. 1,67,580/- being difference in opening capital balance and to verify and ascertain the cost of construction of building by taking assistance of the Department Valuation Officer ("DVO"). 4. That pursuant to the revision order passed under section 263 of the Act, the Appellant sought my advice as regard to the next course of action / remedy available against the revision order passed under section 263 of the Act dated 22.03.2017. Thereafter, I made enquiries with my fellow practicing colleagues and was advised that since the contingent additions would not be substantial, it was prudent not to prefer an appeal and buy peace with the department and avoid protracted litigation which would affect the Appellant's hectic professional life as a surgeon. That the Appellant had obtained 3 valuation reports and considered the report which ascertained the cost of construction at Rs. 1,12,46,510/-, i.e. highest amongst the three valuations, and consequently, the contingent addition would likely not exceed Rs. 4,80,295/- being difference between the cost adopted by the Appellant and the cost as per the highest valuation report. That thereafter, the Appe....
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....i and Others 118 ITR 507 3. Radha Krishna Rai Vs. Allahabad Bank & Others [2009] 9 Supreme Court cases 733. 3.1 We accordingly condone the delay in filing the appeal after relying on the judgment of Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others cited Supra. 4. The brief facts of the case are that the assessee filed return of income on 29/09/2013 declaring income of Rs.1,00,89,520/-. The case was selected for scrutiny and statutory notices were issued to the assessee. The assessee Shri Bashir Ahmed Matte is an Orthopaedic Surgeon in Gokak and survey u/s 133A was conducted on 06/09/2012. He admitted the additional income of Rs.70,76,000/- and offered for tax and AO made some other additions and determined the income at Rs.1,03,68,608/- by adding Rs.2,79,088/- as discussed in para Nos.4,5,6,7 of the assessment order. 5. The assessee did not file appeal and paid the tax accordingly as per the advice of CA. Later on the ld.Pr.CIT on 27/02/2017 issued a show cause notice to the assessee on the following 3 grounds: "(i) Capital to the tune of Rs.53,77,264/- has been introduced by you during the F Yr 2012-2013, the sources for which is n....
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....issued by him, which were submitted before the AO and only after satisfying, he has passed the assessment order. The order passed by the AO is not erroneous and prejudicial to the interest of the revenue. The assessee has declared the relevant facts which were necessary for completion of the assessment. He riled on the following judgments:- a. Ram Nath Sao and Others AIR 2002 SC 1201 b. Alfa Laval Lund AB, ITA No. 1287/PUN/2017 dt. 02.11.2021 c. Sunbeam Auto Ltd., [2010] 189 Taxman 436 (Delhi) d. Malabar Industrial Co. Ltd., [2000] 109 Taxman 66 (SC) e. Anil Kumar Sharma [2010] 194 Taxman 504 (Delhi) f. Shreeji Prints (P) Ltd., [2021] 130 taxmann.com 294 (SC) g. Narayan Tatu Rane, [2016] 70 taxmann.com 227 (Mumbai-Trib) h. Rajesh Mahajan, [2014] 50 taxmann.com 206 (P&H) 9. On the other hand, the ld.DR relied on the order of the ld.Pr.CIT and he objected for the condonation of delay. The ld.Pr.CIT has pointed out that the AO has ignored the issue which was the subject matter of the survey carried out u/s 133A of the Act and the AO should have examined in detail with regard to the valuation of the cost of construction carried out by the assessee for hospital building....
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....r to DVO in the original proceedings us/ 143(3) of the Act. After receipt of the order from the ld.Pr.CIT, the AO issued notice u/s 142(1) on 11/04/2017 and it was brought to the notices of the assessee that the assessee has not furnished any valuation report from the approved valuer in support of his claim up to 31/03/2013 and investment for sum of Rs.1,12,40,299/- and other details were also called for from the assessee which was submitted by the assessee, thereafter a reference to the DVO, IT, Department, Bengaluru was made vide letter dated 04/05/2017 for determination of cost of construction of hospital building as on 31/03/2013. 13. The authorized representative of the assessee on 12/12/2017 furnished a copy of valuation report in respect of cost of construction of the building shown and construction cost was determined at Rs.1,17,20,594/- but the assessee declared Rs.1,12,40,299/-. The AO did not receive the DVO report within the specified period as per the sec. 142A(6) of the Act. The case was getting time barred on 03/12/2017, therefore, the assessment was completed after adding amount of difference in cost of construction as reported by the approved valuer at Rs.4,80,295....
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....date on which the report of the Valuation Officer is received by the AO, shall be excluded for the purpose of computation of limitation period. As the time barring date was not expiring on 31.12.2017, the AO ought to have extended the time barring date as discussed above. By not examining the due date for passing assessment order in view of Explanation-1 to section 153, the AO has committed error of law as a result, the unexplained investment on the basis of estimation of cost of construction remained escaped. Therefore, the order of the AO is not only erroneous but also prejudicial to the interests of revenue. Therefore, the contention of the assessee that the order is not erroneous is rejected. 3.2 As regards contention of the assessee that prior to amendment to section 142A with effect from 1.10.2014, the AO was not empowered to refer the issue of cost of construction to the Valuation Officer, unless he found discrepancies in accounts and the books of accounts are rejected, it is seen from the record that the survey was conducted under section 133A on 06.09.2012 when the books are not closed as the accounting year was not yet closed. During the course of survey, the assessee ....