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REFERENCE BY ASSESSING OFFICER TO DEPARTMENTAL VALUATION OFFICER

Income Tax - Direct Tax Code - DTC - By: - Mr. M. GOVINDARAJAN - Dated:- 7-4-2015 - At times in the process of completion of the assessment of a taxpayer or for any other purpose, the tax authorities need to ascertain the value of any capital asset. In such a case, the tax authorities can make a reference to the valuation officer for ascertaining the value of the capital asset. section 55A contains the provision relating to the power of the tax authorities for making a reference to the valuation .....

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he is satisfied about the correctness or completeness of the accounts of the taxpayer. The Valuation Officer, on a reference made by the Assessing Officer, shall, for the purpose of estimating the value of the asset, property or investment, have all the powers that he has under section 38A of the Wealth-tax Act, 1957. The Valuation Officer shall, estimate the value of the asset, property or investment after taking into account such evidence as the taxpayer may produce and any other evidence in .....

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eipt of the report from the Valuation Officer, and after giving the taxpayer an opportunity of being heard, take into account such report in making the assessment or re-assessment. In K.K. Seshaiyer V. Commissioner of Income Tax - 1998 (7) TMI 6 - MADRAS High Court the Madras Division Bench held that when the actual cost of construction was duly recorded by the assessee and that cost also was set out in the agreement with the contractor, specifying the rates and which rates had been accepted by .....

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assessee, In Sargam Cinema V. Commissioner of Income Tax - 2009 (10) TMI 569 - Supreme Court of India the Supreme Court held that the assessing authority could not have referred the matter to the Departmental Valuation Officer without the books of account being rejected. In Commissioner of Income Tax V. Bajrang Lal Bansal - 2010 (8) TMI 65 - DELHI HIGH COURT the High Court held that the primary burden to prove understatement or concealment of income was on the Revenue and it was only when such .....

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ring the assessment years 1994-95, 1995-96 and 1996-97. The appellant submitted the total cost of construction as ₹ 41,49,070. The Assessing Officer and the Departmental Valuation Officer estimated the cost of construction at ₹ 58,09,000/-. The appellant made objections against the valuation of DVO. The Assessing Officer considered the objections raised by the assessee. The assessment order was passed treating the difference as income for the three financial years. Accordingly a sum .....

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The Tribunal held that it is an admitted fact that the Assessing Officer could not find out anything over and above the payments made to the contractors as the cost of construction as per the bills raised by them. The assessee has accounted for the entire amount paid to the contractor. Further the Assessing Officer could not find out any defect in respect of the cost accounted for in the books of account and the Departmental Valuation Officer has valued the property at plinth area rates. The DVO .....

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