TaxTMI 
TaxTMI 
2026 (3) TMI 714
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....ealed that for the Assessment Year 2008-2009, the balance sheet of the assessee disclosed an investment in the building construction at Ravindra Residency (Ravindra Arcade), Trichy Main Road, Villupuram, to the tune of Rs. 17,80,200/-. Presuming that the investment in the building construction was made during the Financial Year 2007-2008, relevant to the Assessment Year 2008-2009. A notice was issued under Section 143(2) on 29.09.2009. 4. In order to ascertain the actual cost of investment, request was made to the District Valuation Officer, Chennai, on 17.06.2010. On receipt of his valuation report, enquiry was proceeded. In the course of enquiry, the assessee had contended that the investment in the building construction was during the Financial Year 2006-2007 and it is relevant to the Assessment Year 2007-2008. As a result of the said disclosure by the assessee, the assessment for the Assessment Year 2007-2009 was reopened under Section 147 and a notice was issued to the assessee. 5. In response to the notice, the Book of accounts, Bills/Vouchers and other details to substantiate the claims deductions and exemptions etc., was produced by the assessee. However, rejecting th....
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....1/Mds/2006 dated 16.11.2007. In view of the above decisions, the Assessing Officer is not justified in adopting the cost of construction at Rs,41,71,518/-, based on the DVO's report which was based on the CPWD rates. Therefore, the Assessing Officer is required to adopt the state PWD rates for the purpose of valuation while determining the unaccounted investment in construction of property. Therefore, the Assessing Officer is directed to estimate the cost of construction of the building by adopting the State PWD rates as against the CPWD rates adopted by the DVO in his valuation report." 8. Aggrieved by the order of the Commissioner of Income Tax, dated 23.07.2012, the assessee preferred an appeal before the Income Tax Appellate Tribunal on the following grounds: "1. The Commissioner of Income Tax Appeals has erred in not considering the appellants grounds that the Assessing officer has no right to refer the matter to the DVO when the construction has been carried out by entering in to an agreement with a builder. 2. The Commissioner of Income Tax Appeals has failed to appreciate that the Assessing officer has neither rejected the books nor qu....
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....eported in (2010) 15 SCC 546(1), relied upon the judgment of the Hon'ble Supreme Court in Assistant Commissioner of Income Tax, Gujarat vs. Dhariya Construction Company reported in (2010) 15 SCC 251 as well as the judgment of the Division Bench of this Court in Commissioner of Income Tax vs. A.L.Homes reported in (2018) 401 ITR 285. 14. For better appreciation of the arguments placed by the Learned Counsel for the appellant, the judgments referred and relied by the Learned Counsel for the appellant is extracted below. (i) Sargam Cinema, Haldwani vs. Commissioner of Income Tax, Haldwani reported in (2010) 15 SCC 546(1), wherein it was held that: "1. Delay condoned. Leave granted. By consent, matter is taken up for final hearing. 2. In the present case, we find that the Tribunal decided the matter rightly in favour of the assessee inasmuch as the Tribunal came to the conclusion that the assessing authority (AO) could not have referred the matter to the Departmental Valuation Officer (DVO) without books of accounts being rejected. In the present case, a categorical finding is recorded by the Tribunal that the books were never rejected. This aspect has not....
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....port of the DVO was misconceived". The judgment of the High Court was set aside on that ground." 15. In the three judgments cited above, the points emphasis is that the Assessing Officer cannot refer the matter to the District Valuation Officer without rejecting the books of accounts. Taking advantage of the fact that the Assessing Officer has not expressly stated in the assessment order that the books of accounts were rejected, argument is placed by the Learned Counsel for the appellant as if the Tribunal has failed to follow the dictum laid down in Sargam Cinema case cited supra. 16. The two judgments of the Hon'ble Supreme Court cited above, in short only speak about the dictum but not the facts. The judgment of this Court in Commissioner of Income Tax vs. A.L.Homes, provides us sufficient facts to understand the dictum to be followed in case of relying on the opinion of the District Valuation Officer. 17. While examining the assessment order in the present case, we find that the Assessing Officer has restored to District Valuation Officer only after inconsistent plea taken by the assessee, regarding the investment made on the building construction and the costs of inve....
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.... appeal, the Tribunal had dismissed the appeal preferred by the assessee with the following observations: "8. We have heard both parties and also gone through the order of the Assessing Officer as well as CIT(A) and short paper book filed by the assessee. The facts are not In dispute. Since the Assessing Officer had referred the matter to DVO to ascertain the cost of construction of the building, who later on estimated it by following CPWD rates which in turn have been modified by the CIT(A) to the extent that the Assessing Officer has been directed to adopt the State PWD rates. The contention of the assessee is that the Assessing Officer has wrongly made reference to the DVO and his arguments in this regard have been considered by the CIT(A). After considering the arguments in detail, we are of the view that in the paper book, the assessee has not enclosed his ground of appeal raised before the CIT(A). In the absence of Form 35 which was filed before the CIT(A) containing assessee's grievances, we are unable to accept assessee's submissions. Similarly, even in arguments raised before the CIT(A), the assessee's contention was that the DVO had wrongly relied upon the CPWD r....