9911796707
TMI Blog2016 (12) TMI 1657X X X X Extracts X X X X X X X X Extracts X X X X ..... r of assessee. - I.T.A. No. 4009/Del/2016 - - - Dated:- 26-12-2016 - H. S. Sidhu (Judicial Member) For the Department : F.R. Meena, Sr. DR For the Assessee : R. K. Gupta, CA P. S. Kashyap, CA ORDER This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-VIII, Dehradun dated 4.4.2016 pertaining to assessment year 2009-10 on the following grounds:- 1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of ₹ 34,10,713/- made on account of difference in the cost of construction in the valuation report and cost declared by the assessee without appreciating the facts that the assessee had never come forward to prove the cost of construction declared by him before the then A.O. during the course of assessment proceedings. 2. The Ld. CIT(A) has erred in law and on facts in ignoring the fact that the assessee was allowed ample opportunities by the AVO for furnishing the details of expenses to prove the cost of construction declared by the assessee. 3. The Ld. CIT(A) has erred in law and on facts in ignoring the fact that the assessee never been objected the valuation report made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legally empower the AO to initiate proceedings uls 147/148. We may address these issues one by one. Firstly, the issue of reference to AVO without rejection of the books of accounts. The AO has relied upon the cases of CIT Vs. Bhawani Shankar Vyas (2009) . 311 ITR 8 (Uttarakhand) in support of the proposition that the reference could be made without rejecting the books of accounts. However, it is observed that the Hon'ble Supreme Court in the case of Sargam Cinema Ltd. Vs. CIT (2010) 328 ITR 513 (SC) considered the judgment of the Hon'ble Uttarakhand High Court in the case of Bhawani Shankar Vyas (supra). and held that the assessing authority cannot refer the matter to the departmental valuation officer without first rejecting the books of accounts. The Hon'ble Allahabad High Court in the case of CIT Vs. Lucknow Public Educational Society (2011) 339 ITR 0588 (All) held that, once that be the law as declared by the Supreme Court, it is not possible for us to consider the contention advanced on behalf of the revenue . In the present case it is quite clear that the assessee did maintain books of accounts for the construction and it did produce the ledger of constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the report of the AVO was prepared without considering the books of accounts and bills and vouchers as the same were apparently not produced by the assessee before the AVO. In the circumstances, when the assessee has maintained books of accounts, the expenses for construction have been recorded in the books of accounts, the expenses are supported by documents in the form of bills and vouchers and the accounts have been audited and also examined by the AO who did not notice any discrepancy in the same, the estimation of investment on the basis of a formula based computation cannot give reason to believe that any income had escaped assessment. The Hon'ble Rajasthan High court in the case of CIT Vs. Pratap Singh, Amro Singh, Rajender Singh and Oeepak Kumar 200 ITR 788 (Raj) has pointed out that where books of accounts are .maintained than the assessment cannot be done on the basis of valuation report unless the books of accounts are first shown to be incorrect. Hence, the AVO's report could not be the basis for a valid reopening of the assessee's case. 15. The next ground that has been agitated by the assessee is the fact that it had filed objections to the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce/tax appeal to the High Court. Viewed in this light, it appears to me that the rigor of availing of the alternative remedy before the Assessing Officer for objecting to the reassessment notice under section 148 has been considerably softened by the apex court in GKN Driveshafts (India) Ltd. 's case [2003J 259 ITR 19 in the year 2003. In my view, therefore, the GKN Driveshafts (India) Ltd.'s case [2003J 259 ITR 19 does not run counter to the Calcutta Discount Co. Ltd. case [1961]41 ITR 191 (SC) but it merely provides for challenge to the reassessment notice in two stages, that is, (i) Raising preliminary objections before the Assessing Officer and in case of failure before the Assessing Officer; (ii) Challenging the speaking order of the Assessing Officer under section 148 of the Act. II Honn'ble Gujrat High Court in the case of Arvind Mills Ltd. vs. ACW T [2004] 270 (Guj) while following the aforesaid decision concluded that once the Supreme Court stated that the AO was bound to dispose of the objections by passing a speaking order, it was not open to the authorities to contend that in the absence of any provision in the Act, the authorities could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Hon ble Gujarat High Court in the case of Arvind Mills Ltd. vs. ACWT (2004) 270 ITR 469 (Guj.) and has rightly observed that AO has not passed the speaking order in disposing of the assessee s objections against the notice u/s. 148 of the I.T. Act, before proceeding with the assessment, hence, he held that the subsequent assessment order is bad in law and deserving of being quashed. I also find that Ld. CIT(A) also observed that that reopening of the case has been held to be invalid as the same was done on the basis of the Valuation Report from the Valuation Officer which was obtained by an invalid reference and also since the AO proceeded with the assessment without disposing off the objections raised by the assessee to the notice u/s. 148 of the Act and accordingly he held that both the reopening of the case and the consequent assessment order are bad in law. In view of Ld. CIT(A) deleted the addition of ₹ 34,10,713/- u/s. 69A as alleged undisclosed investment is deleted. Therefore, I do not see any reason to interfere with the well reasoned finding of the Ld. CIT(A) on the issue in dispute, hence, I uphold the same. 7. In the result, the Appeal filed by the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
