TMI Blog2016 (9) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... property whereas in our considered opinion, this partial satisfaction does not fulfill the condition precedent laid down in section 145(3) of the Act and so the aforesaid reason given by the AO cannot satisfy the requirement of law to reject the books of account of the assessee. AO, before referring the matter to DVO for valuation of the investment in the property, should have rejected the books of account of the assessee, that too after satisfying the conditions precedent as envisaged under section 145(3) of the Act and without doing so, as found by us, vitiates the reference made by the Assessing Officer to the DVO. In the case of Sargam Cinema vs. CIT (2009 (10) TMI 569 - Supreme Court of India ) wherein held that the reference made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.8.2012 and also made a note sheet entry on 27.8.2012. 3. The brief facts of the case are that the assessee is a manufacturer and retail trader of bakery items. The assessee has filed the return declaring a total income of ₹ 1,65,595/- plus agricultural income of ₹ 1,89,400/-. The assessment was completed on a total income of ₹ 60,83,530/- + ₹ 94,700/-. A search and seizure operation under section 132 of the Act was conducted on 14.9.2010 at the commercial and residential premises of Shyam Swaad Misthan and Mr Brown Bakery group based at Lucknow. Simultaneously survey proceedings under section 133A of the Act were also carried out at many premises belonging to the assessee group and its business associates. Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stimated the cost of property situated at B-35, Sector P, Aliganj at ₹ 57,97,229/- as against the declared cost in construction/investment by the assessee at ₹ 16,24,791/-. The Assessing Officer accordingly added the difference amount of ₹ 41,72,438/- to the income of the assessee as unexplained investment, thus totaling addition of ₹ 58,23,238/-. 6. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), who was pleased to delete the additions made by the Assessing Officer. 7. Aggrieved, the Revenue is in appeal before us and the ld. D.R. placed reliance upon the order of the Assessing Officer. The ld. D.R. further contended that the books of account of the assessee was duly rejected by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is reproduced as under to see whether the ld. D.R. s contention is correct or not:- M/s Shyam Bakers and Namkeen shop at Pandey Tola-P Aliganj, Lucknow, this Property was purchased in November 2006. Tanu Shree Gupta and Ramu Gupta are the owner of this property and property situated at B-35, Sector-P, Aliganj, Lucknow also jointly owned by both of the assessee. Vide notice u/s 142(1) dated 13.07.2012 assessee was asked to produce complete bills and vouchers for justification of the total investment made in these properties. But assessee could not produce supportive evidence on the basis of which actual cost of construction may be determined. Looking to the quality of construction which is of high quality the investment in shop an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO cannot satisfy the requirement of law to reject the books of account of the assessee. The Assessing Officer, before referring the matter to DVO for valuation of the investment in the property, should have rejected the books of account of the assessee, that too after satisfying the conditions precedent as envisaged under section 145(3) of the Act and without doing so, as found by us, vitiates the reference made by the Assessing Officer to the DVO. In the case of Sargam Cinema vs. CIT (2011) 197, Taxman 203 (SC), the Hon'ble Supreme Court has held that the reference made to the Valuation Officer under section 142A of the Act without rejecting the books of account for ascertaining the cost of investment is invalid and bad in law. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur v. ACIT [2013] 36 Taxmann.Com 523 (Raj) 11. CIT v. M/s. Murli Agro Products Ltd., order dated 29th October, 2010 in ITA No.36/2009 (Bombay). The Hon ble High Court held that in the absence of any incriminating material found/seized during the course of search, no addition can be made on non-abated/non-pending cases before the Assessing Officer. The ld. D.R. could not point out that any incriminating material was unearthed during search for the impugned assessment year under consideration or that the assessment for year under consideration was pending before the Assessing Officer on the date of search. 12. So in any angle we look into the matter, we do not find any infirmity in the order of the ld. CIT(A), so we confirm the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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