2026 (4) TMI 737

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.... (for short 'the Act') on 23.08.2006, and in the said survey, it was revealed that the assessee had not maintained a day-to-day stock register, the cash payments made towards purchase of construction materials as being not verifiable, and the particulars relating to labour charges were not properly mentioned, and however, the assessee had offered income @ 8% of the turnover in the said return. Consequent thereto, the Assessing Officer, without recording any satisfaction, referred the matter to the District Valuation Officer (DVO) under Section 142A of the Act for valuation of the properties so as to ascertain the proper value and the DVO, in his report, estimated the total cost of construction of 22 properties at Rs. 55,83,06,733/-. 3. Further, a copy of the valuation report was furnished to the assessee and an explanation was sought as to, why the valuation as per the DVO report should not be adopted for the purpose of assessment, and after considering the objections submitted by the assessee, the Assessing Officer completed the assessment under Section 143(3) of the Act and made an addition under Section 69 of the Act treating the difference in valuation as unexplained income ....

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....see had shown only Rs. 38,58,53,662/- and the difference of two amounts was Rs. 17,24,53,131/-, which was apportioned for five assessment years and the unexplained expenditure attributable to the assessment year 2007-08 was calculated at Rs. 6,51,01,056/-. 9. Learned Senior Standing Counsel would further contend that the Assessing Officer was empowered under Section 142A of the Act to refer the same for matter to the DVO, where the expenditure towards construction appeared to be undervalued. Further, it is contended that the said valuation report was duly served upon the assessee and after considering the objections filed by the assessee, the differential tax was finalized, but, however, as the construction activities relating to the 22 properties was spread over for five years, the differential amount was spread over proportionately among those five years and the addition of Rs. 6,51,01,056/-was made for the assessment year 2007-08. As such, the Assessing Officer followed the due procedure contemplated under the provisions of the Act and there was no violation of statutory rights or principles of natural justice. 10. Learned Senior Standing Counsel further contended that the....

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....6 of 2010, dt.10.10.2013 wherein it was held that as the variance between the declared cost and the valuation exceeded the permissible marginal limit of 15%, the Tribunal was justified in sustaining addition on account of unexplained investment in the construction of the hospital building. The relevant portion of the judgment is extracted hereunder: 13. Drawing a clue from the aforementioned judgments, the learned Standing Counsel contended that the authorities have rightly invoked Section 142A of the Act and after obtaining the valuation report from the DVO, and after giving an opportunity to the assessee to submit objections and by considering the said objections, made the addition under Section 69 of the Act, which is proper, tenable and therefore, the findings arrived by the learned ITAT in allowing the appeal of the assessee are erroneous and the impugned order is liable to be set aside. 14. Per contra, learned counsel for the respondent/assessee contended that the Assessing Officer had not rejected the books of accounts under Section 145 of the Act, and once the books of accounts were accepted and no defects were pointed out in the bills, merely on the presumption that ....

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....n about s. 69C of the Act. As is clear from the above, s.69A deals with unexplained money. Sec. 69B likewise relates to the amount of investment, etc., not fully disclosed the books of account. On the other hand, the provision relates to unexplained expenditure in s.69C. 16. From the reading of sub-s.(1) of s.142A, it is clear that the Legislature referred to the provisions of s.69, 69A and 69B but specifically excluded s.69C. The principle of causus omissus becomes applicable in a situation like this. What is not included by the Legislature and rather specifically excluded, cannot be incorporated by the Court through the process of interpretation. The only remedy is to amend the provisions. It is not the function of the Court to legislate or to plug the loopholes in law. 17. In the present case, except the report of the DVO on which the AO relied upon, there was nothing on record to suggest that there was any other evidence to disbelieve the expenditure shown by the assessee. In fact, during the course of arguments, learned counsel for the assessee produced the assessment order which clearly demonstrates that the expenditure shown by the assessee from the time, w....

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....sessment or re-assessment under this Act, where an estimate of the value of any investment referred to in section 69 or section 69-B or the value of any bullion, jewellery or other valuable article referred to in section 69-A or section 69-B is required to be made, the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. (2) The Valuation Officer to whom a reference is made under sub-section (1) shall, for the purposes of dealing with such reference, have all the powers that he has under section 38-A of the Wealth-tax Act, 1957 (27 of 1957). (3) On receipt of the report from the Valuation Officer, the Assessing Officer may, after giving the assessee an opportunity of being heard, take into account such report in making such assessment or re-assessment: Provided that nothing contained in this section shall apply in respect of an assessment made on or before the 30th day of September, 2004, and where such assessment has become final and conclusive on or before that date, except in cases where a re-assessment is required to be made in accordance with the provisions of section 153-A. Explan....