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2019 (1) TMI 956 - HC - Income TaxReopening of assessment - deduction u/s 80IB(10) denied - AO seeks to reopen the assessment on the basis of the report furnished by the District Valuation Officer estimating the cost of construction - non rejection of books of accounts - invoking of section 142A - Held that:- Section 142A of the Act as it stood at the relevant time provided that where an estimate of the value of any investment referred to in section 69 or section 69B of the Act is required to be made for the purpose of making assessment or reassessment under the Act, the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. For the purpose of invoking section 142A of the Act, the Assessing Officer has to first come to the conclusion that the assessee has made investments which are not recorded in the books of account, in which case, he would reject the books of account under sub-section (3) of section 145 of the Act and make an assessment in the manner provided in section 144. Assessing Officer sought to provisionally assess the petitioner which is not contemplated under the Income Tax Act, 1961. The Assessing Officer, while framing the assessment, may either accept the cost as given by the assessee or reject the same and make a best judgment assessment, but, there is no provision under the Act which permits the Assessing Officer to make a provisional assessment subject to the report of the District Valuation Officer. Once the Assessing Officer accepts the books of account and frames assessment, reopening the assessment solely on the basis of the report of the District Valuation Officer without any other material coming to his notice, would amount to mere change of opinion. In the facts of the present case, it is an admitted position that before making the reference to the District Valuation Officer, the Assessing Officer did not reject the books of account and on the contrary, framed the assessment on the basis of the cost of construction as reflected in the books of account. Under the circumstances, in the first place, no reference under section 142A of the Act as it stood at the relevant time could have been made without rejecting the books of account. Moreover, merely on the basis of the DVO's report, without any other material indicating escapement of income for the year under consideration, the Assessing Officer was not justified in reopening the assessment for the year under consideration. The Supreme Court, in the case of Dhariya Construction Co. [2010 (2) TMI 612 - SUPREME COURT OF INDIA] has held that, opinion given by the DVO is not per se information for the purpose of the reopening an assessment under section 147 of the Act - Decided in favour of assessee.
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