9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (3) TMI 173 - AT - Income TaxValuation of Property - Determination of market value of marble slabs Validity of assessment order passed by the A.O. u/s 143(3) r.w section 153A and 254 of the Act Held that - The Valuation Officer has not sent the comments and the order was getting time barred by 31.12.2010 - The CIT directs the AO to give one more opportunity to the assessee by furnishing copy of the DVO letter dated 06.03.2013 and determine the market value of the property as directed by the ITAT - the comments of DVO came much later - Had AO waited for the same orders could have barred by time - Then AO has no option than to complete the proceedings in the way he did. The opinion was already confirmed by the ITAT - even if an opportunity was given to the assessee again, the AO has to estimate the market value as on that date as there will be no way of examining the actual value in the absence of vouchers maintained by the assessee or books of accounts thus, there is no reason to set aside again to give one more opportunity and estimate the values again - AO has already determined the same considering the DVO s original report, no further purpose would be served by setting aside the orders - Assessing Officer s adoption of values would depend on the original values adopted by the DVO and the objections raised by the assessee, to determine the market values thus, the order passed by the CIT(A) u/s 263 of the Act set aside Decided in favour of Assessee.
Issues Involved:
1. Validity of the order passed by the Assessing Officer (A.O.) without the approval of the Additional Joint Commissioner of Income Tax (Addl. JCIT). 2. The correctness of the A.O.'s valuation of the property and whether it adhered to the directions of the Income Tax Appellate Tribunal (ITAT). 3. The applicability of Section 263 of the Income Tax Act, 1961 by the Commissioner of Income Tax (CIT) to revise the A.O.'s order. Detailed Analysis: Issue 1: Validity of the Order Passed by the A.O. Without Approval of Addl. JCIT The assessee initially raised grounds that the consequential order was passed without obtaining the approval of the Addl. JCIT, making it invalid. However, these grounds were not pressed during the arguments and were subsequently withdrawn. Issue 2: Correctness of the A.O.'s Valuation and Adherence to ITAT Directions The main contention was the valuation of the property constructed by the assessee. The A.O. initially referred the valuation to the Departmental Valuation Officer (DVO), who used CPWD rates. The CIT(A) provided relief by reducing the valuation by 15% for CPWD rates and an additional 10% for self-supervision. The ITAT upheld the CIT(A)'s order but directed the A.O. to adopt market values instead of the DVO's values. Consequently, the A.O. attempted to determine the market value by considering the assessee's objections and quotations, reducing the valuation significantly. The CIT later found that the A.O. granted relief based on quotations not previously submitted and without waiting for the DVO's comments, considering the order erroneous and prejudicial to the Revenue's interests. The CIT set aside the A.O.'s order, directing adherence to ITAT's directions and the principles of natural justice. The assessee argued that the A.O. acted within his powers and followed ITAT's directions, and that the CIT's invocation of Section 263 was unwarranted. The A.O. had no option but to finalize the assessment due to time constraints and lack of DVO's comments. The ITAT had directed the A.O. to determine the market value, which the A.O. did by considering the available data and objections. Issue 3: Applicability of Section 263 by the CIT The CIT invoked Section 263, arguing that the A.O.'s order was erroneous and prejudicial to the Revenue. The CIT highlighted that the A.O. relied on new quotations and did not wait for the DVO's report. The assessee countered that the A.O. had given adequate opportunity and followed ITAT's directions. The A.O. had to estimate the values due to the impending deadline and absence of DVO's comments. The tribunal found that the A.O. had conscientiously examined the items and determined values after due consideration, and any change by the CIT would amount to a change of opinion. The tribunal emphasized that the A.O. had no option but to complete the proceedings based on available data and that the CIT's direction to give another opportunity was unnecessary. Conclusion: The tribunal concluded that the A.O. had followed ITAT's directions and determined the market values appropriately. The CIT's invocation of Section 263 was deemed unwarranted as the A.O.'s order was neither erroneous nor prejudicial to the Revenue. The tribunal set aside the CIT's orders and allowed the assessee's appeals, affirming the A.O.'s valuation and adherence to ITAT's directions. Order Pronounced: The assessee's appeals were allowed, and the orders of the CIT passed under Section 263 were set aside. The tribunal's decision was pronounced in the open court on 28.02.2014.
|
