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TMI Blog2003 (6) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... aining full information in respect of the income or loss of any person, the Income-tax Officer may make such enquiry as he considers necessary." – Thus, Assessing Officer was well within his power to gather information regarding the cost of construction by making a reference to the Executive Engineer, Valuation Cell. - - - - - Dated:- 17-6-2003 - Judge(s) : G. SIVARAJAN., J. M. JAMES. JUDGMENT The judgment of the court was delivered by G. Sivarajan J. - The Income-tax Appellate Tribunal, Cochin Bench, has referred the following question of law under section 256(2) of the Income-tax Act, 1961 (for short "the Act"), at the instance of the assessee, pursuant to the direction issued by this court in the judgment dated July 14,1994, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, after considering the valuation report and the objections taken by the assessee, adopted the cost of construction at Rs. 3,15,498. Based on the said valuation, the difference came to only Rs. 1,06,400. The Assessing Officer treated the said amount as the assessee's unexplained investment and brought the same to tax. Being aggrieved by the said assessment, the assessee filed appeal before the Appellate Assistant Commissioner b of Income-tax, Thiruvananthapuram. A contention was taken in the appeal that the reference of the question of cost of construction of the building by the Assessing Officer to the Executive Engineer, Valuation Cell, Thiruvananthapuram, was without jurisdiction. The first appellate authority considered the said quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the applicant, and Shri George K. George, learned standing counsel, Government of India (Taxes), appearing for the respondent. Counsel for the applicant submitted that the provisions of section 55A of the Act, which provides for reference of the question of valuation by the Assessing Officer to the Departmental Valuer arises only for arriving at the fair market value of the property for the purpose of capital gains tax and that there is no question of using the said provision for any other purpose. Counsel, in support of the said contention, relied on the decision of this court in CIT v. Dr. C. Ashokan Nambiar [2000] 245 ITR 37. Counsel further submitted that there is no provision in the Act enabling the Assessing Officer to refer the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and the decision of the Andhra Pradesh High Court in Daulatram v. ITO [1990] 181 ITR 119. Standing counsel also relied on the decision of a Full Bench of the Punjab and Haryana High Court in Jindal Strips Ltd. v. ITO [1979] 116 ITR 825 as also the decision of the Guwahati High Court in ITO v. Gita Rani Banik [2001] 251 ITR 712. As already noted, the only question that arises for consideration in this case is as to whether the Assessing Officer in the instant case had jurisdiction under the Act to refer the question of cost of construction of a building constructed by the assessee to the Departmental Valuation Officer. According to the assessee, the Assessing Officer has no such jurisdiction, since there is no statutory provision enabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost of construction of a building constructed by the assessee, and to call for a report on the valuation of the cost of construction from the Valuation Officer under section 55A of the Act. However, since this court has taken the view that section 55A of the Act is not available for purposes other than capital gains tax, we are bound by the said decision. We also notice that the Guwahati High Court decision mentioned above relies on the provisions of sections 131, 133(6) and 142(2) of the Act, enabling the Assessing Officer to make such enquiry, which will take in the power to collect materials in the form of valuation report from the Departmental Valuer. The Andhra Pradesh High Court in Daulatram's case [1990] 181 ITR 119 also reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee for her objection. As already noted, the assessee had submitted her objections and, after consideration of the materials, the Assessing Officer has estimated the cost of construction. As already noted, section 142(2) enables the Assessing Officer to conduct such enquiry as he considers necessary for obtaining full information in respect of the income or loss of any person. Certainly, the cost of construction of the building was a relevant matter in respect of the income or loss of the assessee. Necessarily, therefore, the Assessing Officer has to conduct an enquiry. As already noted, since the Assessing Officer did not have the expertise in the matter of valuation of the building, he had chosen to obtain a report from the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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