TMI Blog2007 (5) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... Submission of the ld AR that the assessment order in the present case has reached its finality before 30-9-2004 as per the provisions of section 142A of the Act is concerned, we do not agree with him, because under the wordings of proviso to section 142A inserted by the Finance (No. 2) Act, 2004 with retrospective effect 15-11-1972 is very much clear. We find substance in the submission of the ld AR that without pointing out specific defects in the books of account or rejecting the books of account, reference could not be made by the Assessing Officer to the DVO for determination of cost of construction. Even otherwise, we find that there were certain defects in the report of the DVO, which have been observed by the learned CIT(A) in the first appellate order. He has noted that his predecessor had made an attempt to verify the plinth area of the spot and found that DVO had adopted higher plinth area than measured on the spot by his predecessor. Even the Assessing Officer had not accepted the valuation of the property at Rs. 62,85,000 determined by the DVO and after considering several objections of the assessee to the report, he had arrived at the figure of Rs. 56,39,509. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he difference, the Assessing Officer made addition of Rs. 30,71,854 as income of the assessee from undisclosed sources. The learned CIT(A), vide order dated 25-2-1999, had set aside the assessment to frame the assessment order de novo after allowing adequate opportunity to the assessee. He also directed to re-examine the issue of spread over of estimated cost and to consider all objections of the assessee to DVO's report. The Assessing Officer, vide order dated 29-3-2001, has completed the assessment under section 143(3)/250 of the Act making addition of Rs. 24,26,363 on the basis of DVO's report. The assessee again went in first appeal. The learned CIT(A), vide order dated 4-6-2004, has deleted the addition, against which the Revenue is in appeal before the Tribunal. 4. In support of the grounds, the learned Departmental Representative submitted that the Assessing Officer had rightly referred the matter to the DVO for estimation of cost of construction of the building in question and, in view of decision of Hon'ble Supreme Court in the case of Pooran Mal v. Director of Inspection (Inv.) [1974] 93 ITR 505, there was no prohibition on Assessing Officer to use the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary, 1994 vide letter No. 702, whereas the assessment for assessment year 1991-92 stood completed in December, 1993. The proceedings for assessment year 1992-93 under consideration were firstly completed under section 143(1)(a) on 27-7-1993. The action under section 148 was taken long thereafter vide notice dated 6-7-1995. Thus, as on the day when the reference was made to the DVO, there were no proceedings at all pending before the Assessing Officer so as to issue commission under section 131(1)(d) of the Act. The learned Authorised Representative submitted that prescribed time-limit for issuance of notice under section 143(2) for scrutiny was expired on 30-12-1993, whereas reference was issued in January, 1994. He placed reliance on the following decisions : (1) Punjab Tractors Ltd. v. Jt. CIT [2002] 254 ITR 242 (Punj. Har.); (2) Vipan Khanna v. CIT [2002] 255 ITR 220 (Punj. Har.); (3) CIT v. Krishan Lal Dua [2005] 277 ITR 477 (P H); (4) Smt. Amiya Bala Paul v. CIT [2003] 262 ITR 407 (SC). (5) Brig. B. Lall v. WTO [1981] 127 ITR 308 (Raj). 7. On merits, the learned Authorised Representative submitted that when books of accounts were maintained, no specific defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 16A of the With-tax Act, wherein also the similar expression for the purpose of making an assessment for valuation is there has held that the very reference and the valuation report also were non est as there was no purpose of making reference once the assessment was already completed. The Hon'ble Rajasthan High Court has again expressed the similar view in the case of CWT v. R.L. Kasliwal [1995] 211 ITR 153. The Hon'ble Madhya Pradesh High Court in the case of Prakash Chand v. Dy. CIT [2004] 269 ITR 260 held that reference made to the Valuation Officer after the completion of assessment was invalid. We, thus, concur with the view of the learned CIT(A) in this regard that when assessment proceedings were not pending for the year in the present case, the Assessing Officer was not justified in making reference to the DVO to determine the cost of construction, hence the reference was invalid and, thus, the report furnished by the DVO. The first appellate order in this regard is, thus, upheld. 9. So far as the other submission of the learned Authorised Representative that the assessment order in the present case has reached its finality before 30-9-2004 as per the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e DVO for determination of cost of construction. Even otherwise, we find that there were certain defects in the report of the DVO, which have been observed by the learned CIT(A) in para No. 8.2 of the first appellate order. He has noted that his predecessor had made an attempt to verify the plinth area of the spot and found that DVO had adopted higher plinth area than measured on the spot by his predecessor. Even the Assessing Officer had not accepted the valuation of the property at Rs. 62,85,000 determined by the DVO and after considering several objections of the assessee to the report, he had arrived at the figure of Rs. 56,39,509. In view of the decision of Hon'ble Rajasthan High Court in the case of CIT v. Pratapsingh Amrosingh Rajendra Singh v. Deepak Kumar [1993] 200 ITR 788 (Raj.) and the decisions of Jaipur Bench of the Tribunal in the cases of Smt. Rekha Devi v. Asstt. CIT [1994] 49 TTJ (Jp.) 530 and Bhanwar Lal Solanki IT Appeal No. 669 (Jp.) of 1994 dated 21-6-1996, the learned CIT(A) has taken the view that the local PWD rates should be applied as against CPWD rates while working out the value of the property in question. Thus, even on the merits of the case, the ..... 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