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TMI Blog2016 (12) TMI 1553X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made by the Assessing Officer which was made on the basis of valuation department by the DVO as unless and until the books of account are first rejected by the Assessing Officer, the Assessing Officer is not justified in making the reference to the DVO's under Section 142 A of the Act. - Decided in favour of assessee - TAX APPEAL NO. 832 of 2016 TO TAX APPEAL NO. 837 of 2016 - - - Dated:- 22-12-2016 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE APPELLANT : MR. MANISH R. BHATT SR. ADV WITH MRS MAUNA M BHATT, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. As common question of law and facts arise in this group of appeals and arising out of the common impugned judgment and order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 for AY 200102 are considered, which are as under: 3.1. That the assessee is an individual engaged in the business of construction and hotel. The department carried the search in the case of assessee as well as that of one M/s. Dharamdev Builders Group on 09.02.2005. The same culminated in notice under Section 153 A of the Act dated 17.04.2015. The assessee filed return of income in response to the said notice declaring total income as 2,37,.230/. Thereafter, order under Section 153A(b) of the Act was passed on 29.12.2006 computing the total income at ₹ 1,29,41,510/after making various additions. It appears that during the course of assessment proceedings, the Assessing Officer made the reference under Section 142 A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on judgment and order passed by the learned Tribunal in deleting the addition of ₹ 74,20,963/( for AY 200102), the Revenue has preferred present Tax Appeal Nos. 832 of 2016 and 833 of 2016 with the following proposed question of law. A.Whether the Income Tax Appellate Tribunal has erred in law and on facts in holding that the AO's action of invoking Section 142A of ht Act without rejecting books of accounts stating the cost of construction of residential property in question as well as the land appurtenant thereto is not based on any incrimination material found or any infirmity being pointed out? B. Whether the Income Tax Appellate Tribunal has erred in law and on facts in deleting the addition of ₹ 74,20,963/on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. In the case of Sargam Cinema (supra) , the Hon'ble Supreme Court has observed and held that unless and until the books of account are first rejected by the Assessing Officer, the Assessing Officer is not justified in making the reference to the DVO's under Section 142 A of the Act. While reference is held to be bad in law, the DVO's report has to be ignored and cannot be basis to make the addition. It is true that subsequently, there is amendment to Section 142 A of the Act however, considering the provision of law prevailing at the time of years under consideration and the decision of the Hon'ble Supreme Court in the case of Sargam Cinema (supra) before making reference to DVO, the Assessing Officer was required to re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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