TMI Blog1984 (5) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, is incorrect. The cost of construction was disclosed at ₹ 1,06,000 by the assessee. The assessee obtained three reports from two registered valuers: one from Shri Balraj Taneja and two from Shri K.N. Bhargava. Shri Taneja estimated cost of construction at ₹ 1,05,085 and Shri Bhargava at ₹ 1,11,741 and at ₹ 1,12,617 in his two reports, respectively. The ITO, however, referred the matter to the valuation cell which estimated the cost at ₹ 1,76,000 which was adopted by the ITO. This is how the latter made an addition of ₹ 70,000 (Rs. 1,76,000 - ₹ 1,06,000) representing unexplained investment. On appeal, the Commissioner (Appeals) rejected the legal objection of the assessee that a reference made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valid. His submission is that section 55A of the Income-tax Act, 1961 ( the Act ) whereunder reference was made to the valuation cell by the ITO, is wholly for other purposes and no valid reference to estimate the cost of construction can be made under the provision. Then he argues that there is no other provision under the Act, to make reference to the valuation cell for valuing the cost of construction. There being no provision in the Act to make reference for valuing the cost of construction, Shri Ranka says that no valid reference could be made to the valuation cell. On the other hand, Shri Saxena argued that section 55A is merely a wrong labelling on the part of the ITO and that the ITO is fully empowered under sub-section (6 ) of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction disclosed thereby. The right to rebut the reports of the registered valuers filed by the assessee to support the cost of construction disclosed thereby is the inherent right of the assessing authority. This being so, we do not agree with Shri Ranka that there must be a specific provision in the Act to enable the ITO to make a reference to the valuation cell. The ITO has jurisdiction to make the assessment and he also has inherent power to rebut the material filed by the assessee in that connection. When the ITO has the inherent power to controvert the material furnished by the assessee or to test the correctness of the report of the registered valuer, filed by the assessee to support the cost of construction as disclosed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at when the Government is having its own experts, then why should the ITO approach a registered valuer and spend the money of the Government unnecessarily for this purpose. Opinion of the expert is an admissible piece of evidence even under the Indian Evidence Act, 1872, which of course is not applicable in the fiscal matters. Though the Indian Evidence Act as such cannot be pressed into service herein, by the principles laid down thereunder, so long as they do not violate the specific provision of the fiscal Act, can very well be followed. An opinion of the expert being an admissible evidence, can be taken into aid by the ITO for testing the correctness of the report of the registered valuer by the assessee. There is nothing in the Act to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there must be a specific provision in the Act and without that no proceedings can be taken up. But the facts of the case in hand are entirely different as the report of the valuation cell was not obtained in this case by the ITO for acquiring the jurisdiction either to make the assessment or for any other purposes, but the report was obtained only to rebut the material furnished by the assessee or to test the correctness of the report of the registered valuers as filed by the assessee. We, having approached the legal objection raised by the assessee from a different angle, think it is unnecessary for us to deal with the argument of the revenue that jurisdiction of the ITO for making reference to the valuation cell lies in section 133(6). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty on those rates was much higher. Shri Ranka says that it is quite erroneous to say that on PWD rates the valuation of the property is either at ₹ 1,83,000 or higher than the one arrived at by the registered valuer, i.e., ₹ 1,12,617 (as given by Shri Bhargava, registered valuer, in his second report). Shri Ranka argues that this discrepancy would have been resolved had the opportunity been given to the assessee to confront the valuation cell. Shri Ranka also argues that already Jaipur Bench of the Tribunal has ruled down that for valuing the property situated within the territory of Rajasthan, Rajasthan PWD rates can more appositely be applied. That being so, Shri Ranka wants that only PWD rates should be pressed into serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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