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TMI Blog1987 (5) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... t day, the assessee made a gift of her half share in the said flat in favour of 3 sons of one Ramesh, who was another brother of the assessee's husband. On that day, Shri Jethanand also made a gift of his half share in the said flat in favour of those three very persons. The total investment of the assessee in the said flat persons. The total investment of the assessee in the said flat in respect of her half share therein up to that date was Rs. 1,14,121 as per the agreement for purchase entered into by her on 29-10-1971. This value of her investment up to that date was declared by her as fair market value of the gifted property in the gift-tax return. The Gift-tax Officer accepted the said value and completed the assessment on 21-3-1984. The Gift-tax Officer, who completed the assessment was the 10th Gift-tax Officer, Market Ward, Bombay. 3. Shri Jethanand had also filed gift-tax return in respect of the gift made by him relating to the other half share in the said flat. The Gift-tax Officer before whom he has filed the return was the 5th Gift-tax Officer, C-III ward, Bombay. The Gift-tax Officer did not accept the value returned by Shri Jethanand. He referred the valuation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Gift-tax has violated the principles of natural justice because copy of the valuation report relied on by him had not been supplied to the assessee. 6. After hearing the parties, we find that the order of the Commissioner of Gift-tax is not liable to be cancelled on this basis. The learned Commissioner of Gift-tax has not used this report in order to enhance the assessment to the prejudice to the assessee. He has used this report with a view to satisfy himself whether the Gift-tax Officer had properly applied his mind to the valuation of the gift-tax property while completing the original assessment. He has specifically directed the Gift-tax Officer to give opportunity to the assessee to raise objections about this report. He has merely set aside the assessment. Consequently, mere fact that copy of the report of the District Valuation Officer was not given to the assessee form proper basis for cancelling the order of the Commissioner of Gift-tax. The second ground raised in the memo of appeal is as follows : "The appellant submits that the fact the CGT has held in his order that the assessment made by the GTO required reconsideration on merit shows that the CGT has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Act, 1961 which is in pari materia with section 24(2) of the Gift-tax Act was involved. It was held therein that jurisdiction of the Commissioner was confined to record as it stood when the Income-tax Officer passed his order and that subsequent valuation report cannot be basis for revision proceedings and that revision proceedings started by the Commissioner on the basis of the Valuation Officer's report would be without jurisdiction and invalid. In the present case, the facts are distinguishable. It is true that the Commissioner of Gift-tax has relied on the valuation report which had come into existence subsequently and which was never part of the original record of assessment. However, the undisputed fact is that the assessee had valued the subject-matter of the gift at the actual investment also made by the assessee in the said flat. The question was whether this was a proper basis for valuation of subject-matter of gift. The assessee had agreed to purchase a flat on 29-10-1971. The date of gift is 29-3-1978. The investment made on the basis of agreement which took place on 29-10-1971. There was reasonable ground to come to the conclusion that the assessment order treati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the assessee had relied before the Commissioner of Gift-tax on the decision of the Madras High Court in CWT v. S. Venugopala Konar [1977] 109 ITR 52, for the proposition that the amount representing actual investment would represent fair market value of incomplete structure. That decision is clearly not applicable in this case. That was a case of wealth-tax assessment of the builder himself. The builder was maintaining account of amounts spent on construction. Consequently, the amounts spent up to the valuation date would represent fair market value of the incomplete construction. In the present case, we are not concerned with the person, who was building the flat. The assessee had not paid the amount which was actually incurred by the builder. He has prima facie paid the amount which was payable by her under the agreement which had taken place several years before the relevant date. Consequently her investment under an agreement which had taken place several years back would not represent the fair market value of the constructed portion. 9. Since the assessee has raised the question of jurisdiction of the Commissioner, we may examine that question in greater detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make further enquiries himself before cancelling the assessment order. The Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Income-tax Officer should have made further enquiries before accepting the statements made by the assessee in his return. This is now well established principle of law laid down in several decisions which need not be cited. It cannot be said in such cases, there has been a violation of principles of natural justice. Considering the facts of the case, the Commissioner is not bound to make an enquiry himself before making final order and it cannot be said, in substance, that any prejudice has been caused to the assessee when he directs the Income-tax Officer to make fresh enquiry [see Addl. CIT v. Mukur Corpn. [1978] 111 ITR 312 (Guj.)]. 11. While considering the revisional powers of the Commissioner, one basic fact regarding the position of the Income-tax Officer should be kept in view. Unlike the Civil Court which is neutral to give decision on the basis of evidence produced before it, an Income-tax Officer is not only an adjudicator but is also an investigator. He cannot remain passive in the face of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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