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Issues involved: Challenge to valuation report made by Valuation Officer u/s 55A of Income-tax Act, 1961 for assessing investment in construction of a building.
Summary: The petitioner, a registered firm, constructed a hotel and provided investment details accepted by the Income-tax Officer u/s 143(1) of the Income-tax Act. Subsequently, the Income-tax Officer referred the valuation to the Valuation Officer u/s 55A due to discrepancies, leading to reopening of assessment u/s 147(a). The petitioner contended that as no capital gain was involved, the reference to the Valuation Officer was without jurisdiction. The Department argued that the Valuation Officer's report was valid as evidence, even though u/s 55A did not apply. The High Court held that the Income-tax Officer's power for enquiry is wide, and if conditions for reopening assessment u/s 147 are met, such action is permissible. However, in the present case, invoking u/s 55A for Valuation Officer reference was deemed inappropriate as no capital gain was in question. The Valuation Officer's report was considered as evidence, not a valuation u/s 55A, and the petitioner could challenge it during the assessment proceedings. The Court directed the Income-tax Officer to conclude the proceedings promptly, vacating the interim order without costs. Separate Judgment by R. K. PATRA: Justice R. K. PATRA concurred with the decision.
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