2012 (10) TMI 1161 - HC - Income Tax

Summary

Issues involved: Appeal u/s 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal regarding addition made under Section 69-B of the Act.

Summary:

The appeal was filed challenging the Tribunal's order regarding the addition made under Section 69-B of the Income Tax Act. The respondent, a private limited company running a cold storage, declared a loss for the Assessment Year 1997-98. The company had shown a cost of construction in its books of account, which was later assessed by the Valuation Officer. The Assessing Officer made additions under Section 69-B based on the Valuation Officer's report. The Commissioner of Income Tax (Appeals) allowed the appeal, stating no addition was required. The Revenue appealed to the Tribunal, which dismissed the appeal.

The High Court noted that unless the books of account of the assessee are rejected, the Assessing Officer cannot refer the matter to the Valuation Officer, as per the decision in Sargam Cinema v. CIT [2010] 328 ITR 513. In this case, the books of account of the respondent-assessee were not rejected; only certain expenditure was disallowed, and an enhancement was made in the cost of construction based on the Valuation Officer's report. Therefore, the addition made based on the Valuation Officer's report was deemed unwarranted. The High Court upheld the Tribunal's order, stating that no interference was necessary, and consequently, the appeal was dismissed.