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2023 (3) TMI 1162 - HC - Income TaxUnexplained investment u/s 69 - Reliance on District Valuation Officer s valuation report - whether the addition made by AO in all the assessment years based on the initial valuation report submitted by the Valuation Officer pursuant to a reference made by the DDIT(Investigation), was within jurisdiction? - HELD THAT - Tribunal, in our view, rightly took note of the decision of the Hon ble Supreme Court in Smt. Amiya Bala Paul 2003 (7) TMI 4 - SUPREME COURT and held that the DDIT did not have the power to make the reference to the DVO, which power he acquired only on 1st April, 2017 by virtue of the Finance Act, 2017 u/s 132(9B) - Tribunal noted that neither the DVO filed the valuation report pursuant to the AO s reference dated 22nd January, 2016 nor the DVO filed the valuation report pursuant to the reference by the CIT(A) through the AO by letter dated 29th January, 2019. Thus, the learned Tribunal noted that the addition has been made only on the basis of the initial valuation report dated 18th November, 2014, which was pursuant to the DDIT s reference and on the said date he had no power to call for such report.Tribunal is fully justified and the order does not call for any interference - Decided against revenue.
Issues:
Whether the Income Tax Appellate Tribunal erred in deleting additions made by the Assessing Officer based on the valuation report by the District Valuation Officer for the assessment years 2008-09 to 2013-14. Analysis: The High Court of Calcutta heard an appeal by the revenue challenging the order of the Income Tax Appellate Tribunal regarding additions made by the Assessing Officer. The core legal issue was whether the Assessing Officer had jurisdiction to make the additions based on the initial valuation report by the Valuation Officer. The Tribunal referenced the Supreme Court decision in Smt. Amiya Bala Paul Vs. CIT and concluded that the DDIT did not have the authority to refer to the DVO for valuation before April 1, 2017, as per the Finance Act, 2017. The Tribunal highlighted that the additions were solely based on the initial valuation report dated November 18, 2014, which was beyond the DDIT's power at that time. The Tribunal's analysis delved into the legislative history, noting that the power for the Assessing Officer to refer to the Valuation Officer was introduced in the Finance Act, 2004, and later amended in 2017. The Supreme Court's decision emphasized that the Valuation Officer's role is limited to statutory functions prescribed under specific provisions like Section 55A of the Income Tax Act. The Court held that the Assessing Officer could not refer the matter to the Valuation Officer for estimating construction costs unless justified under Section 55A. The High Court upheld the Tribunal's decision, emphasizing that the Assessing Officer lacked jurisdiction to refer to the Valuation Officer based on the legislative framework and the Supreme Court's interpretation. The Court dismissed the revenue's appeal and answered the substantial question of law against the revenue. The stay application was also dismissed, affirming the Tribunal's reasoning and decision. In conclusion, the High Court's detailed analysis of the legal issues surrounding the Assessing Officer's authority to make additions based on valuation reports highlighted the importance of statutory provisions and the Supreme Court's precedent in determining jurisdictional matters related to valuation assessments.
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