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TMI Blog2022 (5) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of section 142A whether or not he is satisfied about the correctness or completeness of the accounts of the assessee. Evidently, there was no analogous provision in the section prior to the amendment. In such facts and circumstances, the ld. CIT(A) has correctly held that the Assessing Officer was not justified in referring the matter to the DVO and adopting the valuation suggested by the DVO and making addition on the basis thereof. CIT(A) has correctly relied on CIT vs. Shivakami Company Pvt. Ltd. [ 2009 (10) TMI 569 - SC ORDER] K.P. Varghese vs. CIT [ 1981 (9) TMI 1 - SUPREME COURT] - The Hon ble Supreme Court has long since settled the law that unless there is evidence of excess consideration having been paid in the transaction of immovable property, no higher price can be taken in the computation of income. Department has failed to show as to how the decisions in Vijay Kumar Talwar vs. CIT [ 2010 (12) TMI 2 - SUPREME COURT] and Sudarshan Silk Sarees vs. CIT [ 2008 (4) TMI 5 - SUPREME COURT] sought to be relied on by the Department, stand violated. - Decided against revenue. - ITA No.292/LKW/2019 C.O. No.18/LKW/2019 [In ITA No.292/LKW/2019 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has erred in law and on facts, in not holding and in not giving a specific finding that the provisions of section 142A of the Income Tax Act, 1961 are not applicable at all, and the reference made by the Ld. Assessing Officer to the District Valuation Officer to elucidate the cost of land/fair market value in respect of both immovable properties viz. 126/27 and 126/28T Block, Govind Nag r, Kanpur, being a part of the inventory of the closing stock of the business of the assessee appellant, to be valued only under the provisions of section 145A of the Income Tax Act, 1961, are not tenable in law. 2. Without prejudice to the foregoing, the ld. CIT(A) 4, Kanpur has erred in law and on facts, in not holding and not giving a specific finding that the reference made by the ld. Assessing Officer to the District Valuation Officer to elucidate the cost of land/fair market value in respect of the immovable property No. 126/28 T Block, Govind Nagar, Kanpur, was wholly illegal, and not tenable in law, since the reference was made by the ld. Assessing Officer in respect of this property, in the case of Shri Narendra Kumar Srivastava (meant it to be individual), stated to be owned by S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse in the said premises was being used for marriage/parties etc.; that the ld. CIT(A) failed to allude to the relevant facts and circumstances and misread the provisions of section 142A of the I.T. Act, to arrive at the conclusion; and that therefore, the order of the CIT(A) suffers from perversity in view of the ratio laid down in the case of Vijay Kumar Talwar vs. CIT , 330 ITR 1(SC) and Sudarshan Silk Sarees vs. CIT , 300 ITR 205(SC). 6. On the other hand, supporting the impugned order, the ld. Counsel for the assessee has contended that the properties in question stand duly reflected consistently in the audited books of account of the assessee, as stock in trade; that since the properties had not been sold, the purchase value thereof had been declared in the balance sheet and the books of account; that the valuation of stock was to be done on cost or market value, whichever was lower; that in the case of the assessee, the stock had been valued at cost, since it was much lower than the market value; that this being so, there was no reason to estimate the fair market value; that as and when the stock is sold, the profit therefrom will be declared in the return of income; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies situated at house No. 126/27 and 126/28, T Block, Govind Nagar, Kanpur. In the assessment, the Assessing Officer referred the issue of valuation of the properties to the DVO. The difference between the valuation of the properties, as computed by the DVO and that disclosed in the books of the assessee, was added back by the Assessing Officer, as unexplained investment under section 69 of the Act. The ld. CIT(A) has deleted the addition. 8. The Department contends that the deletion of the addition made by the Assessing Officer is incorrect inasmuch as the ld. CIT(A) has failed to consider that as per the amended provisions of section 142A, the Assessing Officer could make reference to the DVO for valuation of the properties, whether or not he was satisfied about the correctness or completeness of the accounts of the assessee. 9. The present provisions of section 142A (2) were substituted for the old ones by the Finance (No.2) Act, 2014, w.e.f. 1.10.2014, as follows: 142A. (1) The Assessing Officer may, for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value, including fair market value, of any asset, property or inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value. No defect whatsoever was found by the Assessing Officer in the said method of accounting consistently followed by the assessee. As no defect could be found therein, the Assessing Officer did not reject the books of account of the assessee. This is entirely in keeping with the decision of the Hon'ble Supreme Court in the case of Sargam Cinema vs. CIT , 328 ITR 513 (SC), wherein, their Lordships held that where the books of account were not rejected by the Assessing Officer, no reference could validly be made to the DVO for valuation of the property and for making addition. Obviously, Sargam Cinema (supra) is applicable to the case of the assessee and the amendment brought in concerning the provisions of section 142A of the I.T. Act have no adverse effect inasmuch as the amended section has expressly been made applicable w.e.f. 1.10.2014. To reiterate, undisputedly, the year under consideration is Assessment Year 2013-14, due to which fact, the amended provisions, in absence of express direction to the contrary, cannot be made applicable to the year under consideration. To make it further clear, it would be appropriate to add that the present provisions of section 142A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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