TMI Blog2014 (2) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... imply gave no reasons in the order - No independent reasons, either flowing from the file or even in the form of an affidavit assuming the same would be permissible, are brought to notice – the Assessing Officer merely acted under the directives of the superior and did not, on his own application of mind, desire to call for the report – thus, in absence of any valid reasons for making a reference the order cannot be sustained – Decided in favour of Assessee. - Special Civil Application No. 7543 of 2005 - - - Dated:- 12-2-2014 - Akil Kueshi And Sonia Gokani,JJ. For the Appellants : Mr. J. P. Shah with Mr. Manish J. Shah, Adv. For the Respondent : Mr. Sudhir M. Mehta, Adv. JUDGMENT (Per : Honourable Mr. Justice Akil Kureshi) 1. Petitioner has challenged reference order dated 30.3.2005 made by respondent no.1 Assessing Officer to Valuation Officer, Baroda calling for the valuation of investment made by the petitioner in the construction/renovation of the property mentioned in the order, namely, hospital building situated on the third floor of Jalnidhi complex, Surat. 2. Petition arises in the following factual background:- 2.1 The petitioner is a partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which Valuation is required F.Y.2001-02 9 Grounds on which the opinion of the assessing officer is based N.A. 2(a) It is certified that the assessment for the period relevant to the above mention valuation period have been finalized. But, the Addl.CIT Range-6 has directed to refer the building to Valuation Cell. (b) The Assessment is getting time barred on 31/3/2005 for A.Y.2002-03. You are requested to submit the report on or before 30/4/2005 so that case can be reopened, if any variation is found preferably by 30/04/2005. In order to elucidate the correctness of the cost of investment, I require and authorize you u/s.142(A) of the Income Tax Act, 1961 to inspect the property and to make such investigation and seek clarification and material from the assessee and other concerned persons as are considered necessary and take such measures as are deemed fit for determining the true and correct cost of investment of the said property. You are requested to send your Valuation report to me in duplicate urgently and preferably by 30/4/2005. Yours faithfully, (SANJAY PUNGLIA) Asst. Commissioner of Income-tax Circle-6, Surat." 3. On 31.3.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce order was passed. In any case the petitioner had filed appeal against such order of assessment. The appeal would be continuation of the assessment proceedings and that therefore, the Assessing Officer was within his right to call for the report of DVO. In this context, counsel relied on the decision of Uttarakhand High Court in the case of Commissioner of Income-tax vs. Rajendra Aggarwal reported in [2012] 22 taxmann.com 40 (Uttarakhand) in which the petitioner s challenge to the order of reference under section 142A of the Act made by the Assessing Officer was rejected. The Court observed that the Assessing Officer was well within his power under section 142A to take up the issue of valuation of investment in the petitioner s plant for reassessment, if necessary. 8. From the record, it emerges that the order of reference was passed on 30.3.2005. Though loosely mentioned in the said order but explained in the affidavit-in-reply filed before the Court, the assessment was not yet over on the day on which the said reference order was passed. Admittedly, the order of assessment was passed only on 31.3.2005. As held by this Court in the case of Commissioner of Income-Tax vs. Umiya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the Valuation Officer, the Assessing Officer may, after giving the assessee an opportunity of being heard, take into account such report in making such assessment or reassessment: Provided that nothing contained in this section shall apply in respect of an assessment made on or before the 30th day of September, 2004, and where such assessment has become final and conclusive on or before that date, except in cases where a reassessment is required to be made in accordance with the provisions of section 153A." Explanation: In this section, "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957(27 of 1957)" 10. Power of the Assessing Officer for making a reference to the Valuation Officer seeking the estimate flows from sub-section (1) of section 142A. It provides that for the purposes of making assessment or reassessment under the 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 69B or fair market value of any property referred to in sub-section (2) of section 56 is required to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, unexplained money or investment not fully disclosed to be deemed income of the assessee. These provisions start with an essential requirement that the assessee has made such investments or that the assessee is found to be the owner of such money, bullion, jewellery etc. or where assessee has made investment or is found to be the owner of bullion, jewellery etc. which are not recored in the books of account and the assessee offers no explanation about the nature and source of such investment or expenditure or the explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory. Common thread which runs through all these three provisions is that the assessee has made certain investments or expenditure or is found to be the owner of any billion, jewellery etc. and the same are not recorded in the books of account. 16. The Valuer s report under section 142A of the Act is for the purpose of estimating value of such 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 69B of the Act. Unless, therefore, there is prima facie application of sections 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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