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2021 (10) TMI 574 - HC - Income TaxEstimation of cost of extraction of ore - reference to the valuation officer under the provisions of Section 142A of the Act by the search officer - addition of income, which was added based upon the valuation report of the Registered Valuer - whether the person, who has valued the stock in trade i.e., stock of iron ore, was a person, who is a Valuation Officer, as defined under clause (r) of Section 2 of the Wealth Tax Act? - HELD THAT:- Regional Valuation Officers, District Valuation Officers, Valuation Officers and Assistant Valuation Officers are all officers appointed by the Central Government. A Registered Valuation Officer is not an officer appointed by the Central Government and would come under the category of a Valuation Officer or even an Assistant Valuation Officer. A Valuer, who is registered under Section 34AB of the Wealth Tax Act shall be called as a Registered Valuer. A Registered Valuer can appear on behalf of an assessee before the assessing officer under the provisions of Section 34AB of the Wealth Tax Act. A person who is registered as a Registered Valuer cannot be a Valuation Officer. Section 16A of the Wealth Tax Act empowers the assessing officer to make a reference to a Valuation Officer, in a case, where the assessing officer is of the opinion that the fair market value of the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in that behalf or in any case, where having regard to the nature of the asset and other relevant circumstances, the assessing officer deems it necessary to do so. In the present case, the facts of the case reveal that the appellant has disclosed the closing stock of iron ore at ₹ 5,96,74,794/- as against the valuation of ₹ 11,10,01,980/- obtained by the authorized officer. The same fact could have led the assessing officer to believe that the appellant has suppressed the value of the asset in the return of income filed by him and the proper course of action would have been to get a valuation report done by the aforesaid Valuation Officers. If the stock in trade comes under the purview of Section 142(2A) of the Act of 1961, the aforesaid Valuation Officer is the person authorized to value the same and by no stretch of imagination, the assessing officer could have relied upon the Valuation Report furnished by a Registered Valuer to the authorized officer for the purpose of framing the assessment. AO gravely erred in relying upon the valuation report submitted by a Registered Valuer while assessing the income of the appellant, as such a report being invalid in law. Keeping in view the statutory provisions governing the filed, he should have sought a valuation by the District Valuation Officer and could have relied upon his report to assess the income of the appellant. The provisions of the Wealth Tax Act and the Rules applicable for the assessment year 2008-2009 are governing the field and therefore, substantial question of law to be answered in favour of the appellant and against the respondent/revenue by deleting the addition of income, which was added based upon the valuation report of the Registered Valuer.
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