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TMI Blog1990 (3) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year in question wherein the investment in the construction of the said cinema building had been declared at Rs. 11 lakhs on the basis of the report of an approved valuer. The Income-tax Officer made a reference to the Valuation Officer on31-7-1985but without waiting for the report of the Valuation Officer, he completed the assessment under section 143(1) on6-10-1986on the declared loss of Rs. 26,630 as made by the assessee. It may also be mentioned here that unsecured loans amounting to Rs. 4,20,875 were shown in the assessee's balance sheet from 8 persons and the assessee had not filed along with the return the complete addresses and confirmation letters from such creditors. The Income-tax Officer had accepted these loans. This was ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the contentions raised on behalf of the assessee, the learned Commissioner of Income-tax (Appeals) held that the assessment order framed by the Income-tax Officer was erroneous in so far as it was prejudicial to the interests of the revenue. He accordingly, set aside the assessment with the direction that the Income-tax Officer should confront the assessee with the Valuation Officer's report and that after obtaining its reply, frame the assessment afresh in accordance with law after enquiring into the genuineness of the unsecured loans amounting to Rs. 4,20,875. In coming to this decision he held that considering the extent of investment in the balance sheet, it was incumbent upon the assessing officer not only to complete the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resorting to the other general provisions of the Act, since the special excludes the general. In this connection, reference was made by him to the decision of Bombay Bench of the Tribunal in Sixth ITO v. Pithva Engg. Works [1983] 6 ITD 413 and of Hyderabad Bench in the case of ITO v.N. Saikrishna[1987] 22 ITD 548. He cited case law to emphasise the powers which could be exercised by the Commissioner under section 263 and the essential conditions thereof. He referred to the decision of the Calcutta High Court in the case of Reliance Jute Industries Ltd. v. ITO [1984] 150 ITR 643 and submitted that firstly the Income-tax Officer was not bound to make any reference to the Valuation Officer nor his report was binding on the ITO and secondly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO could take cover in having proceeded to complete the assessment under section 143(1) according to the extent Instructions of the Board on the subject. However, on principle this does not debilitate the Commissioner in exercising his independent revisional jurisdiction under section 263 for which the subject matter is the assessment order and not the Income-tax Officer. The position resulting from the two sets of provisions therefore is that the Commissioner would have the jurisdiction and power under section 263 to call for and examine the assessment order even though made by the assessing officer under section 143(1) unless the instructions of the Board on the subject of summary assessment can come to the aid of the assessee on facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. Here it would not be material that the Income-tax Act does not contain a provision which obliges the assessing authority to make-reference in all cases or that the report of the Valuation Officer is or is not binding on the assessing officer. The assessing authority can always conduct such enquiry or investigation and ask for the report of its official expert for assessing the actual value of a property or investment which is in question. In fact in this case the ITO did do that and therefore the Board's Circulars would not come in way. In the case of Reliance Jute Industries Ltd., the Calcutta High Court was specifically concerned with a reference made under section 55A. It would not assist the assessee on facts. 7. No doubt Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans from different parties aggregating to Rs. 4,20,875.30 without complete addresses and confirmation letters from the creditors. It is not the case of the assessee that affidavits were filed on behalf of such creditors. Therefore, the existence of such unsecured loans in the balance sheet did provoke enquiry on the part of the assessing officer to see that they were genuine cash credits or loans. Therefore, we are of the view that since the assessment was completed without proper enquiries which the facts of the case provoked, the assessment was rightly treated as erroneous and prejudicial to the interests of the revenue. We therefore, uphold the order of the learned Commissioner on facts. 9. The appeal filed by the assessee according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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