TMI Blog2012 (11) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... books of account regularly maintained by the assessee - order of the CIT(A) is set aside by deleting the addition sustained by the CIT(A) - in favour of assessee. - IT Appeal No. 137 (Agr.) of 2012 - - - Dated:- 21-9-2012 - Bhavnesh Saini And A.L. Gehlot, JJ. S.K. Chaturvedi and S.N. Bansal for the Appellant. Waseem Arshad for the Respondent. ORDER A.L. Gehlot, Accountant Member - This is an appeal filed by the assessee against the order dated 14.09.2011 passed by the ld. CIT(A)-I, Agra for the A.Y. 2004-05 on the following grounds :- "1. Because in the circumstances of the case and law on the subject the Ld. Commissioner of Income (Appeals) has erred in estimating the cost of construction of the factory building at Rs. 16,17,040/- as against Rs. 13,29,552/- declared by the appellant as per account books and thus, sustaining addition to the extent of Rs. 2,87,468/- for unexplained investment in the factory building. 2. Because in the circumstances of the case the reference to the valuation officer was not justified, proper and legal in as much as the cost of construction was duly supported by the Account Books, bills and vouchers in which nothing wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction declared by him in the books of account, therefore, he got it valued by two different registered valuers adopting two different valuation methods. 3. The ld. Authorised Representative with reference to A.O.'s order submitted that the A.O. made addition without rejecting the books of account of the assessee. Ld. Authorised Representative submitted that the assessee has categorically submitted before the A.O. that the assessee has invested in construction of factory building. The expenditure based on materials purchased and services obtained from reputed companies backed by their invoices and there is no element of concealed expenditure on construction of factory building. Ld. Authorised Representative submitted that as regards the measurements taken by the assessee and by the D.V.O. there is no dispute regarding the quantity of materials consumed in the construction of factory building. The only difference in major items given in the report are with regard to the rates applied by the D.V.O. which are too much and at higher side in view of the current market conditions and ground realities. The D.V.O. has taken higher rate of 3 years ago which is not correct. Ld. Authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , with retrospective effect from November 15, 1972, to confer power on the Assessing Officer to refer the matter to the Valuation Officer which earlier had not been conferred. Earlier, there was a provision being section 55A to ascertain the fair market value of a capital asset for the purposes of Chapter IV. The issue as whether the Valuation Officer under section 55A of the Act could be appointed for valuation of an asset if in the opinion of the Assessing Officer the amount expected in making the investment exceeds the amount recorded on the books. The issue of referring to the Valuation Officer, came up for consideration before the Supreme Court in the case of Smt. Amiya Bala Paul v. CIT [2003] 262 ITR 407. The Supreme Court, after considering the scope and ambit of section 55A of the Act, held that it would not apply to proceedings under section 69B of the Act. Apparently, it appears that section 142A of the Act was introduced to cover this omission. 7. Now question to be seen under what circumstances the A.O. can refer the matter to the D.V.O. under section 142A of the Act. The issue came before the Hon'ble Uttarakhand High Court in the case of CIT v. Bhawani Shankar Vyas [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of account. All the amounts were vouched except some amount which was not supported by vouchers. The Tribunal held that if the books of account do not show any serious infirmity that should be accepted. Though the said judgment is in respect of reference under section 55A but the relevant finding required to be considered is whether on account of some of the amount which are not supported by vouchers can be said to be a serious infirmity in the books of account maintained by the assessee. The court held that such are not serious infirmity and books of account cannot be rejected. 9. In the light of above discussions, if we consider the facts of the case under consideration, we noticed that the A.O. did not reject the books of account regularly maintained by the assessee by invoking section 145(3) of the Act. The assessee raised the ground before the CIT(A) that reference under section 142A to the D.V.O. is without jurisdiction as the A.O. did not reject the books of account. The CIT (A) rejected the assessee's contention with general observation without pointing out serious infirmity in the books of account maintained by the assessee. The CIT (A) on general presumption stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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