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2006 (7) TMI 157 - HC - Income TaxReopening of the assessment u/s 147 - difference in cost of construction disclosed and the cost determined by the Valuation Officer - Whether, the Tribunal is right in holding that the reopening of the assessment u/s 147 on the basis of the valuation report is not proper? - HELD THTA:- A single judge Court, in Tara Chand Mundhra v. UOI [1998 (10) TMI 18 - RAJASTHAN HIGH COURT], has held that once the books of account were held to be reliable, as in the instant case where the Assessing Officer already accepted vide in his assessment orders, the value of the construction of the kalyana mandapam as disclosed by the assessee, the valuation report could not be made the basis for reopening the assessment and therefore, the only ground available for the Department for reopening the assessment was the report of the official valuer for issuing notice u/s 148 which is bad and without foundation and therefore, liable to be quashed. A Division Bench, in CIT v. Vinod Danchand Ghodawat [2000 (6) TMI 13 - BOMBAY HIGH COURT] where during the search, it was found that the assessee had constructed a bungalow and had incurred an expense of Rs. 4.16 lakhs for the same and the Assessing Officer, thereafter, referred the matter to the Departmental Valuer, who valued the property at Rs. 6.66 lakhs and the difference between the said valuation was added as an undisclosed income, it was held that no addition could be made on the basis of the report of the Departmental Valuer, which was obtained subsequent to the order of the regular assessment. In view of the above settled proposition of law, we do not find any force in the contention of the Revenue for raising the first question of law. In view of our conclusion with regard to the first question of law, we also do not find any force in the second question of law. That apart, we do not hesitate to hold that the report of the Departmental Valuation Officer cannot be a basis because the valuation cannot be an arithmetical appreciation of the materials used for the construction nor the expenses incurred by the assessee in that regard, as variations are bound to be there, as fairly conceded by learned counsel appearing for the Revenue that there is variation in the value of the construction between the Central PWD rates and the State PWD rates themselves. Hence, finding no merit in these appeals, the same are dismissed. Consequently, connected T.C.M. Ps. are also dismissed.
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