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TMI Blog2015 (1) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... eference to the Valuation Officer, the AO has not recorded any defect in the books of account nor has he rejected the same - except for the difference in the estimated cost determined by the Valuation Officer and the actual cost as shown by the assessee, the AO has not brought any material on record to establish that the assessee had made any unaccounted investment in the construction of the building and that the books of account do not reflect the correct cost of construction – thus, 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 - Decided against revenue. - TAX APPEAL NO. 1151 of 2005 With TAX APPEAL NO. 1152 of 2005 AND TAX APPEAL NO. 1153 of 2005 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal, following substantial question of law was framed for consideration of this Court. Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in deleting the addition made on account of difference in the cost of construction as disclosed by the respondent as against valued by the District Valuation Officer? 4. Learned counsel for the appellant submitted that the tribunal has committed an error in allowing the deletion of difference of cost of construction disclosed by the assessee as against the valuer's report. 5. We have gone through the materials on record. In our view, the substantial question of law raised in this matter would no longer survive and it is already answe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of proceedings but admittedly a search under Section 132 was carried therefore it is expected that the addition consequent thereupon should be corroborated with evidence detected at the time of search. As far as the books of accounts of the assessee and the recording of the investment in the construction of the house were concerned, the AO had not found any discrepancy. For this legal proposition, a decision of jurisdictional High Court pronounced in the case of Goodluck Automobiles, 26 Taxman.com 264 has been cited wherein the Court has held that unless the books of accounts are rejected the AO cannot make a reference to the Valuation Officer. An another case law relied upon was Sargam Cinema, 197 Taxman 203 [328 ITR 513 (SC)]. Our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 tenor of the order of the Assessing Officer, it is apparent that he has made the reference to the Valuation Officer merely to seek expert advice regarding the cost of construction. There is nothing in the assessment order to suggest that the Assessing Officer had any doubt regarding the cost of construction or that he was not satisfied regarding the correctn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 consonance with the provisions of law, was, therefore, invalid. Accordingly, the report made by the Valuation Officer pursuant to such an invalid reference could not have been made the basis for addition under section 69 of the Act. 6. The question involved in the present case is squarely covered by the observations of this Court in the aforesaid dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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