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2023 (12) TMI 201 - AT - Income TaxAddition u/s 69B - difference in valuation of cost of construction as reported by the assessee and the estimate made by the DVO - non disposal of objections raised by the assessee on the Valuation Report of the DVO - Assessee counsel has taken objection that the DVO did not have jurisdiction over the case of the assessee, and hence the valuation report and the consequential assessment order passed by the Ld. AO and subsequently confirmed by the Ld. CIT(A) is bad in law and the same may be quashed - HELD THAT - CIT(A) has not disposed of the objections raised by the assessee on the Valuation Report of the DVO without appreciating the facts, brought on record by the assessee and confirmed the addition made by the Ld. AO in respect of difference in Valuation of construction as computed by the assessee and as estimated by the DVO amounting to Rs. 7,37,200/- without appreciating the facts of the case. CIT(A) has not addressed the objections raised by the assessee on the Valuation Report of the DVO with the support of documentary evidences brought on record by the assessee and without adjudicating on the merits of the case, the CIT(A) has proceeded to pass the order on the basis of legal principle, but while doing so, has not discussed the objections filed by the appellant and the relevant documents which they had brought on record in their defence, including the valuation report. That s being the position, we see no reason to reject the claim made by the petitioners, on the contrary, we are satisfied that the order passed is in gross violation of the principles of natural justice. Under the circumstances, we consider it deem fit to remand the matter back to the file of the CIT(A) to adjudicate the issue of determination of value of investment in construction afresh after considering the submissions of the appellant assessee and all other relevant documents that he may propose to file before the CIT(A) and on the same being filed, the CIT(A) shall proceed to decide the question in accordance with law at an earlier date. No doubt, the assessee shall cooperate in the fresh proceedings before the CIT(A). Thus, the matter is restored to the Ld. CIT(A) for adjudication as per law. Appeal is allowed for statistical purpose.
Issues Involved:
1. Jurisdiction of the DVO. 2. Validity of the Valuation Report by the DVO. 3. Consideration of objections raised by the Assessee on the Valuation Report. Summary: Jurisdiction of the DVO: The counsel for the assessee argued that the DVO did not have jurisdiction over the case, making the valuation report and the consequential assessment order void ab initio, illegal, and bad in law. The contention was based on the abolition of Wealth Tax from 01.04.2015, which allegedly removed the DVO's powers under the Income Tax Act. However, the Tribunal rejected this argument, citing the Punjab and Haryana High Court judgment in "Krishan Kumar Jhamb vs. Income-tax Officer," which upheld the DVO's jurisdiction to ascertain the fair market value under section 55A of the Act. Validity of the Valuation Report by the DVO: The Tribunal noted that the CIT(A) had dismissed the appeal based on the discrepancies between the valuation reports of the assessee and the DVO. The DVO's report was deemed more reliable as it followed prescribed norms, while the assessee's report lacked supporting evidence for various deductions claimed. The Tribunal upheld the CIT(A)'s decision to rely on the DVO's valuation, emphasizing that the assessee failed to provide any substantial evidence to counter the DVO's findings. Consideration of Objections Raised by the Assessee: The Tribunal found merit in the assessee's argument that the CIT(A) failed to address the objections raised on the DVO's valuation report. The CIT(A) should have sent the assessee's valuation report to the DVO for comments instead of summarily rejecting it. Citing the Supreme Court's ruling in "Assistant Commissioner of Income-tax vs. Balmiki Prasad Singh," the Tribunal emphasized the importance of considering all relevant materials and objections before making a decision. The Tribunal concluded that the CIT(A)'s failure to do so amounted to a violation of natural justice principles. Conclusion: The Tribunal remanded the matter back to the CIT(A) to adjudicate afresh, considering the submissions and relevant documents provided by the assessee. The appeal was allowed for statistical purposes, and the CIT(A) was directed to decide the issue of the valuation of investment in construction in accordance with the law. The assessee was also instructed to cooperate in the fresh proceedings. Order Pronounced: The order was pronounced in the open court on 21/06/2023.
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