TMI Blog2015 (5) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the additions made by the AO who never rejected the books of account before referring the matter to the DVO and on the basis of her report, the re-assessment proceedings could not have been initiated, the present appeals are dismissed. - Decided in favour of assessee. - ITA No.212 of 2013, ITA No.210 of 2013, ITA No.211 of 2013, ITA No.213 of 2013 - - - Dated:- 23-4-2015 - S. J. Vazifdar, Acting Chief Justice And G. S. Sandhawalia,JJ. For the Appellant : Mr.Denesh Goyal, Advocate For the Respondent : Mr. S. K. Garg Narwana, Sr.Advocate with Mr.Karan Garg, Advocate ORDER G.S.Sandhawalia J. This judgment shall dispose of ITA Nos.212, 213, 210 211 of 2013, pertaining to assessment years 2004-05, 2005-06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account of the assessee before referring the matter to the DVO. Whereas the AO had referred the matter to the DVO after considering the valuation as per the report of the approved valuer submitted by the assessee to be on the lower side. 3. The facts of the case show that during the course of assessment for the year 2007-08, it was noticed that the assessee had been raising construction of the factory building from the year 2003-04 to the year 2008-09. The matter was referred to the valuation cell by the Assessment Officer (for short, the 'AO') and on account of the difference of ₹ 4,12,136/- in the construction of the factory building, notice under Section 148 of the Income Tax Act, 1961 (for short, the 'Act') ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent opportunities had been given to the assessee and the AO was well within her jurisdiction to make the additions and there was vast variation between the cost of construction valued, by the DVO and in the books of account of the assessee. By the determination of the value, there was implied and underlined rejection of the books of account under Section 145(3) of the Act, which were suffering from various discrepancies and variations, as available on the assessment records. 5. As noticed, the appeals have been allowed by the Tribunal by placing reliance upon the judgment of the Apex Court in the case of Sargam Cinema (supra) and by holding that the case of the assessee could not be reopened solely on the basis of the report of the DVO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Wherever the books of account are maintained with respect to the cost of construction, the matter can be referred to the DVO after the books of account are rejected by the revenue on some legal or justified basis. In the absence of the same, the reference to the DVO cannot be upheld. In view of the above, we do not find any substance in the appeal. No question of law arises in this appeal for consideration of this Court. Dismissed. Thereafter, in Nirpal Singh Vs. Commissioner of Income Tax [2013] 359 ITR 398, the said view was followed. 9. Subsequently, in Dr.Raghuvendra Singh Vs. Commissioner of Income Tax (2014) 267 CTR (P H) 376, the provisions of Section 142A of the Act were taken into consideration, including the circular No.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport of the DVO would be dealt with by the Assessing Officer under sub section (3) of Section 142A of the Act. There is logic and reasoning for adopting the aforesaid view. There appears to be no occasion for the revenue not to accept the valuation of the cost of construction of an asset without rejecting the books of account maintained by the assessee. It would not only be unfair but against the public policy as well to assume that the assessee is dishonest and he must have submitted an incorrect account of expenses/investment. 10. However, an exception was carved out in that case that since it was a case of search and seizure and disclosure of concealed income was made by way of surrender, in the said circumstances, the cost of const ..... X X X X Extracts X X X X X X X X Extracts X X X X
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