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2019 (3) TMI 1978 - ITAT COCHINReference made to the DVO u/s 142A - Addition u/s 69B - HELD THAT:- Admittedly, section 142A of the I.T.Act is a procedural provision and applies to pending assessments. In the instant case, the reference u/s 142A of the I.T.Act to the DVO was made on 06.12.2004 and the assessment was completed only vide order dated 30.03.2005. The assessment so completed vide order dated 30.03.2005 has not become final and conclusive because the appeal was filed by the Revenue and the same is being considered by the Tribunal. Therefore,since the assessment has not attained finality, the amended provisions of section 142A of the I.T.Act (with effect from 01.10.2014) will have application to the facts of the instant case (since the above said provision is a procedural provision and not a substantive provision). The amended provisions, viz., section 142A(2) states that the Assessing Officer may make a reference to the DVO whether or not he is satisfied with the correctness and completeness of the accounts of the assessee. Further the amended provision requires the DVO to give opportunity of being heard to the assessee and send a copy of the report to the assessee. The amended provision of section 142A of the I.T.Act (w.e.f. 01.10.2014), going by the dictum laid down by the Hon’ble Apex Court in the case of Sunita Mansingha [2017 (4) TMI 303 - SUPREME COURT] has application to the facts of the instant case. Having held that the amended provision of section 142A of the I.T.Act has application to the facts of the case, we have to necessarily hold the rejection of books of account is not a pre-condition for reference to the DVO u/s 142A of the I.T.Act. Also we notice that in the instant case various discrepancies in the valuation report pointed out by the assessee was never addressed to by the DVO nor by the Assessing Officer. On the contrary, the Assessing Officer did not give proper opportunity of hearing to the assessee on account of the assessment becoming time barred and this is clear from para 5 of the assessment order, wherein it is mentioned “since the case is getting time barred by limitation on 30.01.2005, the contentions raised by the assessee could not be considered at this stage”. It was clear that there was no proper examination either by the DVO nor by the Assessing Officer with regard to the objections raised by the assessee in regard to the valuation report. A.O. had also stated that DVO’s report is binding on him. This statement of the A.O. is incorrect. The report of the DVO is only advisory in nature and not binding on A.O. Therefore, we deem it appropriate to restore the issue to the Assessing Officer to consider the objections of the assessee, so that the discrepancies / objections raised by the assessee to the valuation report could be addressed and a clear finding can be given on the discrepancies / objections of the assessee Therefore, the finding of the CIT(A) on this score is set aside.Revenue’s appeal is allowed for statistical purposes. AY 2002-03 - When the new Sec.142A was inserted by the Finance (No.2) Act, 2014, the proviso to Sec.142A(3) did not exist as it no longer served any purpose. The legislature was conscious of the fact that the substitution of Sec.142A by the Finance (No.2) Act, 2014 was made only for the purpose of overruling the legal position as interpreted by various High Courts and Supreme Court in the case of Sargam Cinemas [2009 (10) TMI 569 - SC ORDER] The legislature did not make the law retrospective in operation nor were pending proceedings saved as was done when Sec.142A was inserted by the Finance (No.2) Act, 2004 w.r.e.f. from 15.11.1972. It cannot also be said that Sec.142A as inserted by the Finance Act, 2014 has retrospective effect. Therefore, the reference to DVO in the present case is invalid because rejection of books of accounts is a pre-condition for making a reference to DVO and there was admittedly no such rejection of books of accounts.We also find that the value as declared by the Assessee in its books of accounts was much higher than the value as was estimated by the Registered Valuer in the report filed by the Assessee and therefore there was no occasion to draw any inference that investment in construction as recorded in the books of accounts was less calling for any addition u/s.69B of the Act.
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