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TMI Blog2012 (9) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the Tribunal was right in holding that the reference made by the Assessing officer to the District valuation officer regarding determination of cost of construction of assessee's complex was without jurisdiction, in view of decision of the Supreme Court, reported in 262 ITR 407and also under the provisions of section 142(A) of the Income Tax Act, inserted by the Finance Act of 2004 with retrospective effect from 15.11.1972" ITA No.1304/2006 1. Whether the Appellate Tribunal was right in holding that the reference made by the Assessing Officer to the District Valuation officer for determination of cost of construction of Nageetha Complex without jurisdiction in view of the provision of Sec.142-A of the Act which was inserted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year 1998-1999 the difference was taken as Rs.30,20,722/- and for the assessment year 1999-2000 at Rs.29,07,287/- which was added to the income of the assessee for the assessment years under the appeals are unexplained income invested in the cost of construction. Being aggrieved by the assessment of income made by the Assessing Officer, the assessee preferred appeals before the CIT (Appeals), Mysore in ITA Nos.1200/Mys/CIT(A)/03-04 and 1752/Mys/CIT(A)/04-05. The CIT (Appeals), Mysore dismissed the appeals. Being aggrieved by the same, the assessee preferred appeals before the Income Tax Appellate Tribunal, Bangalore, mainly contending that in view of the law laid down by the Apex Court in a decision reported in (2003) 262 ITR 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re he has incurred for construction of the building. In the absence of the same, the Assessing Officer after getting the report from the District Valuation Officer has assessed value of the building. There is no infirmity in the order passed by the Assessing Authority as well as the CIT (Appeals) and sought for setting aside the order passed by the Appellate Tribunal. 5. On the other hand, Sri.B.S.Raghu Prasad, learned counsel appearing for the respondent-assessee contended that there is no infirmity or irregularity in the order passed by the Appellate Tribunal. Further, Section 55-A of the Income Tax Act deals with the capital gain for the purpose of assessing the fair market value of the capital assets in connection with the computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DSR rates and PWD procedure will be followed. The cost of the materials was not taken into consideration. After valuation of the building, more than three years has been taken to complete the construction of the building. In the meantime, the building was leased to the tenant and tenant has put up a partition wall and flooring, which suits to his convenience. After receipt of report from the Valuation Officer, the same was made available to the assessee and the assessee has filed detailed objections to the said report. Without getting clarification from the District Valuation Officer regarding the objections filed by the assessee, the Assessing Officer has proceeded to fix the value of the building, which is contrary to law and sought f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation has been done in CPWD rates. The valuation taken by the Assessing Officer is at a higher rate compared to the DSR rates fixed by the PWD and also relied upon the judgement of the Hon'ble Supreme Court in (2003) 262 ITR 407 cited supra. However, the Tribunal has lost sight of the amendment brought into the Income Tax Act and the new Section 142-A inserted by the Finance (No.2) Act 2004 w.e.f. 15-11-1972. Section 142-A of the Act reads as under: (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 bullion, jewellery or other valuable article referred to in section 69A or section 69B or fair market value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled objections to the District Valuation report. The Assessing Officer referred the objections to the District Valuation Officer. The District Valuation Officer has not given any reply with regard to the objections raised by the assessee. However, the Assessing Officer without considering the objections proceeded to assessee the value of the building. The amended section 142-A(3) contemplates that on receipt of the report from the Valuation Officer, the Assessing Officer must give the assessee an opportunity of being heard and then take into consideration such report in making such assessment or reassessment. In the instant case, on the objections field by the assessee, though the matter was referred to the District Valuation Officer for h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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