TMI Blog2013 (1) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... . AJAY KUMAR MITTAL AND MR. GURMEET SINGH SANDHAWALIA JJ. Present: Mr. Rajesh Katoch, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1. This order shall dispose of ITA Nos.80 and 81 of 2008 as according to the learned counsel for the revenue, identical question of law and facts are involved in both the cases. However, the facts are being extracted from ITA No.80 of 2008. 2. ITA No.80 of 2008 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 31.5.2006, Annexure A.III passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh in ITA No.377/CHANDI/2004 and ITA No.716/CHANDI/2004 for the assessment year 1993-94, claiming following sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the addition made on the basis of DVO's report on account of unexplained cost of construction. He, however, confirmed the action of the Assessing Officer in reopening of assessment proceedings as valid and dismissed the appeal of the assessee on this ground. The revenue filed appeal before the Tribunal against the order of CIT(A) on the issue of deletion of addition amounting to Rs. 4,75,383/- made on account of unexplained cost of construction on 'Kismat' Complex whereas the assessee filed appeal before the Tribunal on the issue of reopening of assessment under Sections 147/148 of the Act. Vide order dated 31.5.2006, Annexure A.III, the Tribunal treated the reopening of assessment on the basis of DVO's report as invalid and dismissed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopened the assessment on the basis of report of the V.O. The reasons recorded by the Assessing Officer for issuing the notice under Section 148 were following: 'The Assistant Director of Income Tax (Inv.-I) Ludhiana vide his letter No.ADIT (Inv.-I)/Ludhiana/94-95/1560 dated 4.4.95 has passed on the information to its office that the above named company has constructed commercial property No.101 known as 'Kismat Complex' at GT Road, Miller Ganj, Ludhiana and the cost of construction has been estimated at Rs. 60,71,138/- upto the Financial year 1994-95. The company has shown cost of construction in its books at Rs. 15,33,816/- as against the total cost estimated at Rs. 20,09,199 for the Assessment year 1993-94. The assessment for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction. Therefore, solely on the basis of DVO's report one cannot come to the conclusion that the income had escaped assessment until and unless any other related evidence is brought on record to substantiate that the assessee incurred more expenses on account of cost of construction than those which had been declared/disclosed by him. However, in the present case apart from the report of the DVO nothing has been brought on record to substantiate that the assessee invested more money than the investment declared by it. 5.2 Similarly the Hon'ble Jurisdictional High Court in the case of CIT v. Smt.Usha Mathur (2001) 252 ITR 179 had held - 'that when the assessment was made under section 143(1)(a), reopening on the basis of valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, simply relying on the valuation report of the DVO, the reopening cannot be held to be valid. 8. Further, it was not disputed by the counsel for the revenue that the books of account produced by the assessee were never rejected. The Apex Court in Sargam Cinema v. Commissioner of Income Tax, (2010) 328 ITR 513 held that the assessing authority could not have referred the matter to the DVO when there was no rejection of books of account maintained by the assessee. It was observed as under:- In the present case, we find that the Tribunal decided the matter rightly in favour of the assessee inasmuch as the Tribunal came to the conclusion that the assessing authority could not have referred the matter to the Departmental Valua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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