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Issues involved: Challenge to notice u/s 148 of the Income-tax Act for assessment year 2006-07 based on Departmental Valuation Officer's report.
Summary: The petitioner, engaged in manufacturing Flexi Circuit Boards, challenged a notice issued u/s 148 for the assessment year 2006-07, based on a report by the Departmental Valuation Officer (DVO) regarding the construction of a factory building. The petitioner contended that the notice solely relying on the DVO's report was not valid as per legal precedents. The Department justified the notice citing a significant difference in investment valuation between the assessee and the DVO's report. After hearing both parties, the Court noted that in previous assessment years, additions based on the DVO's report were deleted. The Court referred to legal precedents where it was held that the DVO's report cannot be the sole basis for reassessment in cases of construction valuation. Relying on these precedents, the Court set aside the notice issued by the department u/s 148 of the Income-tax Act. The writ petition was allowed with no order as to costs.
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