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2016 (9) TMI 798 - AT - Income TaxUnexplained investment in immovable property - addition u/s 69 - reference made by the Assessing Officer to the DVO - Held that:- Assessing Officer has noted that “assessee has not maintained complete books of accounts as regard to the construction account of the subjected properties. So I do not have any other option other than taking view of expert of this field. So estimate made by assessee is here by rejected in absence of any documentary bills /vouchers”, which clearly spells out that the Assessing Officer is not satisfied with that part of the books maintained by the assessee in respect to the construction account of the subjected property whereas in our considered opinion, this partial satisfaction does not fulfill the condition precedent laid down in section 145(3) of the Act and so the aforesaid reason given by the AO cannot satisfy the requirement of law to reject the books of account of the assessee. AO, before referring the matter to DVO for valuation of the investment in the property, should have rejected the books of account of the assessee, that too after satisfying the conditions precedent as envisaged under section 145(3) of the Act and without doing so, as found by us, vitiates the reference made by the Assessing Officer to the DVO. In the case of Sargam Cinema vs. CIT (2009 (10) TMI 569 - Supreme Court of India ) wherein held that the reference made to the Valuation Officer under section 142A of the Act without rejecting the books of account for ascertaining the cost of investment is invalid and bad in law. Therefore, we are of the view that the Assessing Officer was not justified to make reference to the DVO for ascertaining the cost of investment without rejecting the books of account of the assessee. Moreover, this is a search case and it is an undisputed fact that no incriminating material was found and seized from the premises of the assessee. - Decided in favour of assessee.
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