2014 (4) TMI 896

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..... ssessee - At no stage of the assessment proceedings does the AO appear to have mentioned that the books of account are defective or that the cost of construction as shown in the books of account is not the true cost of construction - unless the books of accounts are rejected, the AO cannot make a reference to the Valuation Officer - The reference made to the Valuation Officer, not being in consonance with the provisions of law was invalid - the report made by the Valuation Officer pursuant to such an invalid reference could not have been made the basis for addition u/s 69 of the Act – no substantial question of law arises for consideration - Decided against Revenue. - Tax Appeal No. 296 of 2014 With Tax Appeal No. 297 of 2014 - - - Dated: .....

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..... se of Sargam Cinema v. Commissioner of Income-tax, reported in (2010) 328 ITR 513 (SC). This Court in the case of Goodluck Automobiles Pvt. Ltd. v. Assistant Commissioner of Incometax, reported in 359 ITR 306, in the context of this issue referring to the decision of the Supreme Court in the case of Sargam Cinema (supra) had observed as under : 12. The facts of the present case may be examined in the light of the statutory scheme discussed hereinabove as well as the decision of the Supreme Court in Sargam Cinema (supra). In this regard, a perusal of the assessment order reveals that the Assessing Officer has categorically recorded a finding to the effect that the accounts are duly audited and complete details are available. From the teno .....

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..... Except for the difference in the estimated cost determined by the Valuation Officer and the actual cost as shown by the assessee, the Assessing Officer has not brought any material on record to establish that the assessee had made any unaccounted investment in the construction of the building in question and that the books of account do not reflect the correct cost of construction. Under the circumstances, there was no occasion for the Assessing Officer to make a reference to the Valuation Officer. As held by the Supreme Court in the case of Sargam Cinema (supra), unless the books of accounts are rejected, the Assessing Officer cannot make a reference to the Valuation Officer. The reference made to the Valuation Officer, not being in conso .....

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