2017 (4) TMI 303 - SC - Income Tax

Valuation - reference to the Departmental Valuation Officer - Local Public Works Department rates applied - Held that - From the order of the Tribunal we find that the Tribunal has even though held that the reference to the Departmental Valuation Officer in question is not valid, in view of the decision of this Court in the Case of Amiya Bala Paul v. CIT (2003 (7) TMI 4 - SUPREME Court) but it has also held that it is s settled principle of law that in place of Central Public Works Department rates local Public Works Department rates are to be applied and adopted to determine the cost of construction. In view of the fact that Section 142A was inserted by Finance (No.2)Act, 2014 (23 of 2004) w.e.f. 15th November, 1972 and subsequently again substituted by Finance Act, 2010 (14 of 2010) w.e.f. 1st July, 2010 and Finance (No.2) (225 of 2014) w.e.f. 1st October, 2014, as the proviso to sub-section (3) of Section 142A as it existed during the relevant period, reference to the Departmental Valuation Officer can be made because assessment in the present case had not become final and conclusive because the appeal preferred by the Revenue under Section 260A of the Income Tax Act, 1961 was pending before the Rajasthan High Court. In view of the finding recorded by the Tribunal that the local Public Works Department rates are to be applied and adopted in place of Central Public Works Department rates, we do not find any good ground to interfere in the impugned judgment on this issue on merits

Summary

Issues: Validity of reference to Departmental Valuation Officer, Applicability of Public Works Department rates for cost of construction

In the judgment, the Supreme Court addressed the validity of the reference to the Departmental Valuation Officer and the applicability of Public Works Department rates for determining the cost of construction. The Tribunal had initially held the reference invalid but also stated that local Public Works Department rates should be used instead of Central Public Works Department rates. The Court noted the insertion and subsequent amendments to Section 142A of the Income Tax Act, allowing for the reference to the Valuation Officer in certain circumstances. Since the assessment was not final due to a pending appeal, the reference was deemed permissible. However, the Court upheld the Tribunal's decision to use local Public Works Department rates, finding no reason to interfere with this aspect of the judgment. Consequently, the appeal was dismissed, and no costs were awarded. Any pending applications were also disposed of by the Court.