1985 (10) TMI 133 - AT - Income Tax

Summary

Issues:
1. Proper estimation of the cost of construction of a house property for income tax assessment.
2. Jurisdiction of the assessing officer to make additions in a fresh assessment after the original assessment was set aside by the Commissioner.
3. Interpretation of directions given by the Commissioner under section 263 of the Income-tax Act, 1961.

Detailed Analysis:

1. The case involved the assessment of the cost of construction of a house property for income tax purposes. The assessee initially declared the cost at Rs. 32,000, which was later estimated by the approved valuer at Rs. 36,800. However, the assessing officer made additions totaling Rs. 58,111 based on his own estimates, disregarding the valuer's and departmental valuation cell's assessments. The Commissioner (Appeals) held that the assessing officer was unjustified in deviating from the initial estimates and directed the cost to be valued at Rs. 39,134, leading to an addition of Rs. 7,134 as income from other sources. The revenue appealed this decision, arguing for the higher valuation by the assessing officer.

2. The main contention revolved around the jurisdiction of the assessing officer to make additional assessments in a fresh assessment order after the original assessment was set aside by the Commissioner under section 263 of the Income-tax Act, 1961. The revenue argued that the assessing officer had the authority to make any additions not considered in the first assessment order. However, the assessee contended that the assessing officer could only act within the directions given by the Commissioner. The Tribunal held that the assessing officer must adhere to the specific directions provided by the Commissioner and cannot exceed the scope of those directions when making a fresh assessment.

3. The Tribunal emphasized the importance of interpreting the directions given by the Commissioner accurately. Citing past judgments, the Tribunal highlighted that the assessing officer is bound by the specific directions provided and cannot conduct a fresh assessment beyond the scope of those directions. The Tribunal relied on precedents to support the view that the assessing officer must strictly adhere to the directions given by the Commissioner in cases where assessments are set aside for a limited purpose. The Tribunal concluded that the assessing officer must follow the directions of the Commissioner and cannot introduce new elements or assessments beyond the specified scope.

In conclusion, the Tribunal partially allowed the appeal, directing the assessing officer to adopt the cost of construction at Rs. 39,134 and make an addition of Rs. 7,134 as income from other sources, in line with the initial assessment order. The judgment reaffirmed the importance of adhering to the directions provided by the Commissioner in cases where assessments are set aside for specific purposes, limiting the assessing officer's jurisdiction to the scope of those directions.