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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 ..... r AO has proceeded with the matter without considering the valid objections raised by the assessee. The same was confirmed by the CIT (Appeals) - As the Appellate Authority set aside the said order without remanding the matter for reconsideration the matter requires to be reconsidered by the Assessing Authority afresh after getting necessary clarification from District Valuation Officer with regard to value of the building constructed by the assessee - in favour of assessee. - ITA No.1302/2006, ITA No.1304/2006 - - - Dated:- 13-8-2012 - K Sreedhar Rao and B Manohar, JJ. For Appellant: Shri E Sanmathi, Adv. For Respondent: Shri B S Raghuprasad, Adv. JUDGEMENT These appeals are filed by the revenue being aggrieved by the order dated 21.04.2006 passed by the Income Tax Appellate Tribunal, Bangalore Bench-B in ITA Nos.719 and 793/Bang/2005 confirming the order passed by the Commissioner of Income Tax (Appeals) (CIT (Appeals) for short) dated 21-02-2005. 2. These appeals are admitted on the following substantial questions of law: ITA No.1302/2006 "Whether the Tribunal was right in holding that the reference made by the Assessing officer to the District valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 407 in the case of Smt. Amiya Bala Paul Vs. Commissioner of Income Tax that a Valuation Officer appointed under the Wealth Tax Act can discharge the function within the statutory limits under which he was appointed. It is not open to a Valuation Officer to Act in his capacity as a Valuation Officer under the Income Tax Act. Referring the matter to the District Valuation Officer by the Assessing Officer is contrary to law. The Appellate Tribunal after considering the matter and relying upon the judgement of the Hon'ble Supreme Court cited supra allowed the appeal and set aside the determination of market value of the building. Being Aggrieved by the same, the revenue has preferred thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to refer a matter to the Valuation Officer under section 55-A. A report of the Valuation Officer under section 55-A may be considered by the Assessing Officer as a piece of evidence if it is relevant. However, the power of inquiry granted to an Assessing Officer under Section 133(6) and 142(2) does not include power to refer the matter to the Valuation Officer for an enquiry by the latter." Hence, the reliance placed on the Valuation report by the Assessing Authority is contrary to law. 6. Further, the Valuation Officer relying upon the CPWD rates has taken into consideration the plinth area to value the building. Usually for valuation of the building, 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. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e article referred to in section 69A or section 69B or fair market value of any property referred to in Sub-Section (2) of section 56 is required to be made, the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. (2) The Valuation Officer to whom a reference is made under sub-Section (1) shall, for the purposes of dealing with such reference, have all the powers that he has under section 38A of the Wealth-tax Act, 1957 (27 of 1957). (3) On receipt of the report from the valuation Officer, the assessing Officer may after giving the assessee an opportunity of being heard, take into account such report in making such assessment or reassessment: Provided that nothing contained in this section shall apply in respect of an assessment made on or before the 30th day of September, 2004, and where such assessment has become final and conclusive on or before that date, except in cases where a reassessment is required to be made in accordance with the provisions of section 153A. 9. In view of the amendment to the Income Tax Act, the Assessing Officer has got power to refer the matter to the District Valuation Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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