2019 (5) TMI 1537 - ITAT COCHIN

Revision u/s 263 - conclusion of the CIT that rejection of books of account is not a pre-requisite for referring the valuation of asset u/s 142A - HELD THAT:- The law on the date of referring the case to the Valuation Officer u/s 142A has to be applied. In this case, the AO referred for valuation u/s 142A of the I.T. Act on 06.12.2004. The law that is applicable as on 06.12.2004 is a provision prior to its insertion of section 142A with effect from 01.10.2014.

Therefore, going by the judgment of the Apex Court in the case of Sargam Cinema [2009 (10) TMI 569 - SC ORDER] which was in force at the relevant time states that it is mandatory that the books of account need to be rejected prior to referring the case for valuation u/s 142A . Further, we rely on the decision of the ITAT, Delhi Bench in the case of Jithendra Singh Chaddha [2019 (1) TMI 272 - ITAT DELHI] wherein it was held that reference of matter to the DVO by the AO for valuation of property is not mandatory.

In our opinion, the provisions of section 142A provides that the AO may refer the matter to the DVO for the purpose of estimation of the value of the asset, property or investment and get a copy of the report from the DVO. The word ‘may’ makes it discretionary to refer the matter to the DVO. It cannot be said by any stretch of imagination that it is mandatory. Therefore, we are of the view that CIT is not justified in exercising jurisdiction u/s. 263 of the Act. Accordingly, we quash the order passed by CIT u/s. 263 of the Act. Since we have quashed the order of CIT passed u/s. 263 of the Act, we refrain from going into other grounds of appeal of the assessee. The appeal of the assessee allowed.

Condonation of delay of 201 days - change of chartered Accountants - HELD THAT:- We have heard the rival submissions and perused the affidavit. Originally the assessee’s appeals were handled by the Chartered Accountant, Shri S. Sivaramakrishnan aged 70. Later, the assessee changed the chartered accountant by a new person. Hence, there was a delay of 201 days in filing the appeals before the Tribunal. We find that the reason explained by the assessee is bona fide and there is sufficient cause for filing the appeals belatedly by 201 days. Accordingly, we condone the delay and admit the appeals for adjudication.

AY 2012-13 - CIT observed that there was difference in valuation for ascertaining the cost of construction of one of the properties - HELD THAT:- In the present case, the Assessing Officer being satisfied about the value of the construction of the property declared by the assessee in its books of account, cannot refer the matter to the DVO. Therefore, it could be said that the Assessing Officer has taken one possible view in this case. Thus, it cannot be said that the assessment order passed was erroneous and prejudicial to the interests of the Revenue. In view of the ratio laid down by the Supreme Court in the case of CIT vs. Greenworld Corporation [2009 (5) TMI 14 - SUPREME COURT] we find that the Assessing Officer has passed the assessment order after application of mind and considered the value of the property declared in the books of account of the assessee as correct, therefore, the CIT was not justified in interfering with the assessment order on the basis of the valuation report received after the assessment order was framed. Accordingly, we quash the order passed by the CIT u/s 263 of the Act for all the assessment years. - Decided in favour of assessee