1982 (10) TMI 71

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....style of M/s Paras Theatre, Kurukshetra. For the asst. yr. 1974-75 which is under appeal, the assessee firm filed on 22nd July, 1974 the return declaring a loss of Rs. 30,300. Later on, this return was revised on 23rd March, 1977 declaring loss of Rs. 29,300. On 13th March, 1978, the ITO raised an ex parte assessment under s. 144 and as a consequence also refused registration under s. 185(5) of the Act. However, after cancellation of the best judgment assessment under s. 146, the assessee was granted registration under s 185(1)(a) by order of the ITO dt. 11th Feb., 1980. 3. In so far as the quantum of assessment is concerned, the ITO during the course of regular assessment proceedings found that the assessee had debited its building acco....

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....ork executed through a contractor which resulted in considerable savings. The attention of the Commr. was drawn to the fact that an approved valuer Shri. T. Chaudhry had worked out the fair market value as on 11th Sep., 1976 at Rs. 4,57,266. However, the ld. Commr. has recorded that Shri Suresh Gupta agreed that the order of the ITO be set aside for being reframed in accordance with law. This is the only reason given by the CIT for exercising jurisdiction under s. 263 and in the last para of his impugned order, the CIT has observed that, "in view of the foregoing, the assessment order of the ITO is patently erroneous in so far as it is prejudicial to the interest of revenue". He accordingly set aside the order with the directions to the ITO....

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....early establishes the application of mind by the ITO and of his judicial discretion to come to a conclusion that on the facts of the case. an addition of Rs. 50,000 would meet the ends of justice. There is nothing to show that either the ITO omitted any relevant provision of law or did not take into consideration any material facts of the case. It is to be noted that the under the IT Act, the ITO is not bound to accept the report of the Valuation Officer as sacrosanct as in contradistinction of the provisions of s. 16A of the WT Act. Therefore, when the CIT found by looking to the valuation report of the Valuation Officer and the addition made by the ITO that it was to be in excess of the addition made by the ITO that could not justify an i....