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TMI Blog2010 (4) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... S KUMAR, PANKAJ MITHAL JJ JUDGMENT The judgment of the court was delivered by Rajes Kumar J .- In the present writ petition the petitioner has claimed the following reliefs: "(a) Issue a writ, order or direction in the nature of certiorari quashing the impugned notices dated May 13, 2004 (annexure 12) issued by respondent No. 1 under section 143(2) of the Income-tax Act, 1961 for the assessment years 1998-99, 1999-2000, 2000-01 and 2002-03. (b) Issue a writ, order or direction in the nature of certiorari quashing the impugned notice dated March 22, 2004 (annexures 4, 5, 6 and 7) issued by respondent No. 1 under section 148 of the Act for the assessment years 1998-99, 1999-2000, 2000-01 and 2002-03. (c) Issue a writ, order or direction in the nature of prohibition restraining respondent No. 1 from proceeding ahead in pursuance of the impugned notice dated May 13, 2004, issued under section 143(2) of the Act and the notices dated March 22, 2004 to reassess the petitioner under section 148 of the Income-tax Act. (d) Issue any other writ, order or direction, which this hon'ble court may deem fit and proper in the circumstances of the case. (e) Award costs of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64,669.90, in the construction of the factory building at Maryadapatti, Bhadohi. The assessing authority referred the matter to the Departmental Valuation Officer, Kanpur. The reference was made to determine the costs of construction in respect of the factory building constructed at Maryadapatti, Bhadohi as well as Barhi Newada, Varanasi. The Valuation Officer submitted his report. As per valuation report, there were differences in the expenses incurred in the construction of the factory building as shown by the assessee in the aforesaid years. The following costs of construction were estimated by the Departmental Valuation Officer, Kanpur: Assessment year Factory building at Maryadapatti, Bhadohi Factory building at Barhi Newada, Varanasi Disclosed Rs. Estimated Rs. Differences Rs. Disclosed Rs. Estimated Rs. Differences Rs. 1998-99 16,38,476 14,94,300 3,22,562 1999-00 11,71,738 20,89,600 4,51,124 2000-01 10,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction come under "expenditure"as contemplated under section 69C of the Act and not under "investment" and section 69C is not covered and, therefore, section 142A does not apply. In support of the contention he relied upon the decision of the Delhi High Court in the case of CIT v. Aar Pee Apartments P. Ltd. reported in [2009] 319 ITR 276 (Delhi). He, therefore, submitted that there is no case of escaped assessment, inasmuch as notices have been issued on an irrelevant consideration and, therefore, liable to be set aside. 7. Sri Shambhu Chopra, learned standing counsel submitted that under section 143(1)(a) of the Act, only after the summary processing of the return, an intimation was issued. Such intimation is not the assessment order. In support of the contention he relied upon the decisions of the apex court in the case of Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. reported in [2007] 291 ITR 500 (SC), the Division Bench decision of the Gujarat High Court in the case of S. R. Koshti v. CIT [2005] 276 ITR 165 and the Division Bench decision of the Punjab and Haryana High Court in the case of CIT v. Kartar Singh and Co. P. Ltd. reported in [2008] 300 ITR 440. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer must not be arbitrary or irrational. It must be reasonable and based on reasons, which are relevant. It must be in good faith and not in mere pretence, should have a rational connection and relevant bearing on the formation of the belief, and should not be extraneous or irrelevant. The material should be relating to the particular year for which the assessment is sought to be reopened. It is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of income. The belief must be formed on the basis of the material, which has a nexus to the escaped income. This court cannot examine the sufficiency of the material. To examine the issue whether there was material to form the belief of escaped assessment, it would be appropriate to refer some relevant provisions. Section 142A, section 69 and section 69C of the Act read as follows: "142A. Estimate by Valuation Officer in certain cases.-(1) For the purposes of making an assessment or reassessment under this Act, where an estimate of the value of any investment referred to in section 69 or section 69B or the value of any bul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to circumvent the decision of the apex court in the case of Smt. Amiya Bala Paul v. CIT [2003] 262 ITR 407. Under section 142A of the Act, the matter can be referred to the Departmental Valuation Cell for the purposes mentioned therein. Under section 142A of the Act, a reference can be made for the purposes of section 69. Section 69 says about the unexplained investment. We are of the view that investment made in the construction of the building, if not recorded in the books of account falls under section 69 of the Act. With due respect, we are not able to subscribe to the view taken by the Delhi High Court in the case of CIT v. Aar Pee Apartments P. Ltd. [2009] 319 ITR 276 wherein the Delhi High Court has held that investment made in the construction of building falls under expenditure incurred by the assessee and is covered under section 69C of the Act and not under section 69 and since section 69C is not covered under section 142A of the Act, the reference to the Valuation Cell cannot be made for the purposes of determination of the investment made in construction of the building. 11. In this view of the matter, we are of the opinion that the reference made to the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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