TMI Blog2001 (10) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... o business activities. He, however, found that the three lands in question have been purchased in this year by three concerns, for the purpose of construction activities in future, i.e., under the name of Anuneha Construction, the assessee had purchased land admeasuring 52,657 sq. yards at Goregaon from M/s. Textile Processing Corporation for Rs. 18 lakhs at the rate of Rs. 34.18 per sq. yard. According to the Assessing Officer, the rate shown by the assessee was too low. Therefore, he made a reference to the District Valuation Officer (DVO for short) for finding out the fair market value of the land. However, pending receipt of the valuation report, the Assessing Officer made an ad hoc addition of Rs. 10 lakhs to the value of this land, and mentioned that as and when the valuation report is received, the value will be substituted. Under the name of Siddivinayaka Construction Co. the assessee purchased a land admeasuring 32,515 sq. ft. at Village Valani, Malad from M/s. Sree Ram Construction for Rs. 22,31,887 at the rate of Rs. 42.50 per sq. ft. Here also the Assessing Officer referred the matter to the DVO as in his opinion the price shown by the assessee was too low. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the reasons stated there, the addition made here also is directed to be deleted." 3. After the receipt of the valuation report of the DVO, the assessment was reopened under section 147 of the Act on the basis that the DVO has valued the properties in question at higher figures, viz., the Malad property at Rs. 48.35 lakhs as against Rs. 22,31,887 shown by the assessee; the property at Jogeshwari at Rs. 51.48 lakhs as against Rs. 49,54,200 shown by the assessee and the property at Goregaon at Rs. 98.02 lakhs as against Rs. 18 lakhs shown by the assessee. So far as the reason for reopening is concerned, the Assessing Officer mentions "The valuation reports now received is considered as evidence regarding the undervaluation of the properties in question by the assessee." In response to the notice issued under section 148 of the Act, the assessee filed her return declaring an income of Rs. 75,413. Notices under sections 143(2) and 142(1) of the Act were also issued and at the time of assessment the assessee was given copies of the valuation reports of the DVO in respect of the three properties and she was asked to file the objections, if any, against them. The assessee filed h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstead of the rate of Rs. 110 per sq. ft. adopted by the D.V.O. the C.I.T.(A) adopted the rate of Rs. 60 per sq. ft. as against the approximate rate of Rs. 55 shown by the assessee. Thus he sustained an addition of Rs. 3,51,593 and in respect of the Jogeshwari property he was of the view that there was only a negligible difference of Rs. 1,93,800 between the price shown by the assessee and that shown by the DVO. Therefore, in view of the smallness of the difference, the C.I.T.(A) directed the Assessing Officer to accept the purchase value shown by the assessee and accordingly deleted the addition of Rs. 1,93,800. That is how both the assessee as well as the department are aggrieved. 4. As stated above, the main grievance of the assessee in her appeal is against the reopening of the assessment under section 147 of the Act. The learned counsel for the assessee submitted that the reasons recorded by the Assessing Officer for reopening the assessment were the receipt of the valuation reports later on as an evidence for undervaluation of the properties. He pointed out that in the case of the Jogeshwari property, as per the DVO s own letter the reference was made on 29-3-1989. Simila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT [1998] 234 ITR 170 for the the proposition that if the assessee has fully and truly disclosed all material facts necessary for his assessment, unless new information has been received the assessment cannot be reopened, it will amount to change of opinion which does not give jurisdiction to initiate proceedings under section 147 of the Act. Further, reliance was placed on the Bombay High Court decision in the case of Smt. Bella Cajeton Travasso v. Third WTO [1987] 166 ITR 49 for the proposition that under the Wealth-tax Act, a plain reading of section 16A(1) makes it clear that reference to the Valuation Officer is permissible for the purpose of making an assessment, but such a reference cannot be made in respect of an assessment which had already been completed and such a reference would be illegal and without jurisdiction. It was also pointed out that the assessee had produced Form No. 37EE, which is equivalent to Form No. 37-I of the present procedure, at the time when these properties were purchased and no action was taken against the assessee. Thus it was submitted that the reopening of the assessment is without jurisdiction. As regards the applicability of section 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reliance was also placed on the decision of the Bombay High Court in the case of Dr. Keki Hormusji Gharda v. B.H. Raisinghani, WTO [1982] 135 ITR 386 for the same proposition. Further reliance was placed on the decision of the Rajasthan High Court in the case of Smt. Amar Kumari v. CIT [1979] 120 ITR 747 for the proposition that interpretation of sections 55A and 69B of the Act was held to be a question of law. Reliance was also placed on the decision of the Rajasthan High Court in the case of Smt. Amar Kumari Surana v. CIT [1997] 226 ITR 344. On merits, the learned Departmental Representative relied on the order of the Assessing Officer. 6. We have considered the rival submissions and have gone through the material available on record. In this case, the assessee has challenged the reopening of the assessment under section 147 of the Act. The original assessment under section 143(3) of the Act was completed on 31-3-1989. The Assessing Officer made this reference to the DVO for the valuation of the Malad and Goregaon properties on 20-6-1989, much after the completion of the original assessment and in respect of the Jogeshwari property, the reference was made on 29- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the Jogeshwari property, the valuation report, as per this decision, cannot be a basis for reopening. Similar view was expressed by the Calcutta High Court in the case of Shirinbai Abdullabhai ( supra ) wherein it was held that the valuation report or the Inspector s report received subsequently cannot be made the basis for reopening and it cannot be said that the assessee has not disclosed his income truly and fully. The Bombay High Court has also opined in the case of Smt. Bella Cajeton Travasso ( supra ) that a reference to the Valuation Officer is permissible for the purpose of making an assessment, but such reference cannot be made in respect of an assessment which had already been finalised. Besides, the Calcutta Bench of the Tribunal as taken similar view in the case of Roof Tower Construction (P.) Ltd. ( surpa ) and opined as under : "The scope and effect of the section 147, as substituted with effect from 1st April, 1989, is much wider. If the Assessing Officer simply has reason to believe that income has escaped assessment, it confers upon him the jurisdiction to reopen the assessment. However, a completed assessment cannot be reopened on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Smt. Amar Kumari ( supra ), but if we go through this decision of the High Court it will be seen that the High Court has held that "although merely on the basis of the valuation report and the fair market value no addition can be made. . . ." This decision also goes against the department which says that valuation report cannot be made the basis for making any addition. So far as the other decision of the Rajasthan High Court in the case of Smt. Amar Kumari ( supra ) is concerned, that decision only opines about the referable question of law. No opinion is expressed on the issue whether a reference made after the completion of assessment is valid to reopen the assessment. So far as the decision of the Karnataka High Court in the case of Amrut Talkies [1984] 150 ITR 386 and the decision of the Gujarat High Court in the case of Chhatrashal Sinhji D. Zala ( supra ) are concerned, they are distinguishable on facts. In the latter decision, the Hon ble Gujarat High Court has opined that the valuation report is a material which can justify the reopening of the assessment. But this decision is not applicable to the facts of the present case because in that case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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