TMI Blog2011 (8) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... .w.s. 147 of the Income Tax Act, 1961(hereinafter referred to as the Act ) vide his separate orders dated 22.12.2008. For the sake of brevity and clarity, we dispose of both these appeals and cross objections by this consolidated order. 2. First, we will take up Cross Objections of assessee. In all these Cross Objections whereby assessee raised only common legal issue that without rejection of books of account, reference made by Assessing Officer to DVO for estimating cost of construction is vitiated by law. For this, the assessee has raised exactly identically worded and common ground, which is as under: That without rejection of the books of accounts by the Ld. A.O. reference to the DVO is not valid. 3. Brief facts leading t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lac for preliminary expenses being capital in nature and further made addition of small discrepancies of ₹ 284/- and ₹ 2880/- as found in details of cost of construction of factory building. Subsequent to completion of assessment, Assessing Officer received DVO s report on 28.7.2005 and on the basis of same, Assessing Officer reopened assessments for Assessment Year 2002-03, 2003-04 and 2005-06 in view of difference in investment declared by assessee in returns of income and cost of construction as estimated by DVO as under: Period Investment declared by the assessee Estimated cost of construction 2000-01 Rs.37,000.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely, if there is no challenge to the transaction represented by the entries or to the genuineness of the entries, then it is not open to the revenue or other side to contend that what is shown by the entries is not the real state of affairs. When a return is furnished and accounts are put in, in support of that return, the accounts should be taken as the basis for assessment. They should not be rejected because they are complicated. The procedure of the Assessing Officer is of a judicial nature and in making assessment he should proceed on judicial principles. If evidence is produced by the assessee in support of his return it should be accepted unless it is rebutted by other admissible evidence and not by mere hearsay. As the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. A clear finding to that effect, along with materials on which such finding is based, has to be made out and given by Assessing Officer. No assessment under the first proviso to section 145(1) of the Act or under section 145(2) of the Act can be sustained if the Assessing Officer (or the appellate authority, in cases of appeal) has not considered and recorded a finding against the assessee as to whether he has been regularly employing a method of accounting or whether his income, profits or gains can properly be deduced from his method of accounting if he has been regularly employing a method of accounting or whether the accounts are correct and complete, and the Assessing Officer s decision on these matters is not to be a subjective or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the figures shown therein have to be followed. The valuation report can be taken into consideration only when the books of account are not reliable or are not supported by proper vouchers or the Income-tax Officer is of the opinion that no reliance can be placed on such books of account. It is true that the Income-tax Officer has no option but to rely on the valuation report, which is a document prepared by an expert and is admissible, but there must be a finding by the Income-tax Officer that the books of account maintained by the assessee are defective or are not reliable. There may be a marginal difference in the actual investment and the report of the Valuation Officer for a number of reasons as the valuation report is prepared on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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