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TMI Blog2011 (3) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... red to be made means satisfaction to be recorded by the Assessing Officer by assigning reason before referring a property to the valuer and in the absence of any recorded satisfaction or reason', the reference to the valuer shall not be sustainable ?" 3. Income-tax Appeal No. 136 of 2007, which relates to the assessment year 2003-04, was admitted by order dated December 3, 2007, on the following substantial question of law : "The Income-tax Appellate Tribunal further erred in law in not correctly appreciating the provisions of section 142A of the Act introduced with retrospective effect from November 15, 1972, correctly as there are no pre-conditions stipulated in this section, e.g., that the Assessing Officer has to invoke the provisions of section 145 of the Act for a reference to be made to the Valuation Officer. 4. In Income-tax Appeal No. 93 of 2008, which relates to the assessment year 2004-05, the following substantial question of law arises for consideration : "Whether the hon'ble Tribunal has erred in law in holding that for a reference to the Valuation Officer under section 142A to be valid, it is necessary that the Assessing Officer must f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is submitted that it is not necessary for the Assessing Officer to reject the valuation report as submitted by the assessee before resorting to section 142A of the Act. Section 142A of the Act, it is submitted, confers power of the Assessing Officer, if he is (not ?) satisfied with the valuation done in terms of the books of account submitted by the assessee, to direct the valuation of the assets to be done as set out in section 142A of the Act. 7. On the other hand, on behalf of the assessee, it is submitted that the Tribunal was right in holding that without rejecting the books of account, it would not be open to the Assessing Officer to have ordered the Valuation Officer to value the property in terms of section 142A of the Act. 8. To correctly appreciate the issue, we may gainfully reproduce section 142A of the Act, which reads as under : "142A. Estimate by Valuation Officer in certain cases.-(1) For the purposes of making an assessment or reassessment under this Act, where an estimate of the value of any investment referred to in section 69 or section 69B or the value of any bullion, jewellery or other valuable article referred to in section 69A or section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Assessing Officer cannot resort to estimation. Reference has been made to some authorities, which we shall now refer to. 12. In K. K. Seshaiyer v. CIT [2000] 246 ITR 351 (Mad), the case before the Madras High Court was in respect of the assessment year 1978-79 before section 142A was introduced. The issue referred for consideration was whether the Tribunal was right in ignoring the valuation of the house property submitted by the assessee and instead adopting a sum as the valuation of the property by calling for a report of the District Valuation Officer ? The learned Madras High Court held that in the absence of the Tribunal recording that the books of account maintained by the assessee are not credible, it would not be open to call for a report of the District Valuation Officer. 13.In CIT v. Star Builders [2007] 294 ITR 338 (Guj), the question before the Gujarat High Court was whether the Tribunal was right in deleting the addition made under section 69A of the Act based on the report of the Valuation Officer ? Reliance was placed on the judgment of the Supreme Court in Smt. Amiya Bala Paul [2003] 262 ITR 407 (SC) to hold that reference can be made to the Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer to refer to the Departmental Valuation Officer for valuation of the asset. The court then proceeded to hold that a reference to the Departmental Valuation Officer would arise only in a case where the Assessing Officer was not satisfied with the accounts of construction produced by the assessee or where such account was kept and the assessee relied on the valuation report of the registered valuer. 15.Now, we come to a judgment of the Uttarakhand High Court in the case of the CIT v. Bhawani Shankar Vyas [2009] 311 ITR 8 (Uttarakhand). The question before the High Court was whether the Income-tax Appellate Tribunal was justified in holding that without rejecting the books of account, the Assessing Officer was not justified in making reference to the Departmental Valuation Officer, ignoring the retrospective effect of the provisions of section 142A of the Act ? Section 142A was inserted by the Finance Act, 2004, with retrospective effect from November 15, 1972. The High Court, after considering various judgments, was of the view that the Income-tax Appellate Tribunal was not justified in holding that without rejecting the books of account, the Assessing Officer was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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