2011 (2) TMI 1496 - AT - Income Tax

Summary

Issues Involved:
1. Validity of reopening assessments based on the Departmental Valuation Officer (DVO) report.
2. Merits of additions u/s 69B based on the DVO report.
3. Non-adjudication of certain grounds by the Commissioner of Income-tax (Appeals) for AY 2000-01.

Summary:

1. Validity of Reopening Assessments Based on DVO Report:
The Tribunal initially struck down the reopening of assessments for AYs 1996-97, 1998-99, and 1999-2000, which was based on the DVO's valuation report. The Hon'ble Jurisdictional High Court reversed this decision, holding that the DVO's report constituted an expert opinion and reliable information, thus a valid basis for reopening assessments. The Tribunal was directed to decide on the merits, which it had not done previously due to setting aside the assessments on legal grounds.

2. Merits of Additions u/s 69B Based on DVO Report:
The assessee argued that the DVO's report could not be relied upon without rejecting the books of accounts, citing the Supreme Court decision in Sargam Cinema vs. CIT. However, the Tribunal held that the assessee could not use this decision as the Tribunal's purview was to follow the High Court's directions. The Tribunal found that the AO had noted the assessee's failure to maintain proper construction accounts and furnish requisite details, thus justifying reliance on the DVO's report. The Tribunal found no infirmity in the valuation report, which was prepared after a detailed inspection and addressed the assessee's claims.

3. Non-adjudication of Certain Grounds by CIT(A) for AY 2000-01:
For AY 2000-01, the Revenue challenged the set aside of the assessment on legal grounds, while the assessee's Cross Objection (CO) highlighted non-adjudication of certain grounds by the CIT(A). The Tribunal noted that the CIT(A) had not decided on these issues due to the Tribunal's earlier decision striking down the reopening for the first three years. The Tribunal directed that these grounds be remitted back to the CIT(A) for adjudication.

Conclusion:
The Tribunal dismissed the assessee's appeals and partly allowed its Cross Objection for statistical purposes, while allowing the Revenue's appeal.