TMI Blog1986 (1) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... n satisfied. The reasons which have been recorded are identical for all the years which are to the following effect : " The assessee constructed a H.P. at 48-D, Muktaram Babu Street, Calcutta-7, during the accounting years 1964 to 1967 corresponding to the assessment years 1965-66 to 1968-69. The case was referred to the Executive Engineer (Valuation), Unit-II, Calcutta, and report of valuation since received. The total cost of construction up to the assessment year 1969-70 has been shown by the assessee at Rs. 4,20,000 including lift whereas the estimated value as per valuer is Rs. 5,06,900 including lift. There appears to have been no construction during the calendar year 1968. Thus, there is a difference of Rs. 86,864 (Rs. 5,06,864 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings for the year 1967-68, summons under section 131 of the Income-tax Act, 1961, was issued on February 21, 1972, and the assessee filed the valuation report and sanction plan of the house property on February 25, 1972. The assessee filed the original valuation report made by M/s. R. N. Seal and Associates, 5, Russel Street, Calcutta, showing valuation of the house property at Rs. 6,34,646 including the value of the land and old structures. (e) Being not satisfied with the valuation report, the predecessor-in interest in office sent an Inspector attached to the Officer, who was entrusted with the valuation of the property and the Inspector furnished the report on March 16, 1972, showing the valuation at Rs. 7,86,058. As there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for initiation of the proceeding is annexed herewith and marked with the letter 'X' collectively. " It is contended on behalf of the assessee that there is absolutely no material before the Income-tax Officer to hold that the assessee failed to disclose fully or truly all material facts necessary for her assessment for the said assessment year. It is also contended that on the basis of the estimated valuation, no charge of omission can be made against the assessee. On the other hand, the Revenue has attempted to justify the reopening on the basis of the facts stated in the affidavit-in-opposition read with recorded reasons as set out hereinabove. I have considered the rival contentions. The assessee constructed house property at No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction and such details were furnished. The assessee filed the valuation report of the house property during the course of assessment proceedings for the year 1967-68. The Income-tax Officer was not satisfied with the report and an Inspector was sent to estimate the valuation. There was difference in the valuation and the matter was referred to the Executive Engineer for valuation on March 17, 1972. It has been alleged that as the valuation report was a time-consuming factor, the Executive Engineer requested the Income-tax Officer to complete the time-barring assessments for the assessment years 1967-68, 1968-69 and 1969-70 without waiting for the valuation report as the preparation of the valuation report was not possible without inspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he did not accept the assessee's valuation report pointing out the infirmities, if any, in the said valuation report. He did not adopt the said course. In a case like this, it was expected that the Income-tax Officer who made the original assessment should affirm an affidavit dealing with the allegations made by the petitioner that there was no omission or failure on her part to disclose fully and truly all material facts necessary for her assessments for the said assessment years. Where the primary facts have been disclosed by the assessee before the Income-tax Officer, as regards the construction of the house property it was for the Income-tax Officer to investigate into the facts and to find out whether the cost of construction as discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, the Appellate Assistant Commissioner deleted the said addition made as undisclosed income. The Appellate Assistant Commissioner held that the cost of construction disclosed by the appellant is not lower compared to the cost estimated by the Income-tax Officer and as such no addition was called for. The addition was, therefore, deleted. The Income-tax Officer in the original assessment had investigated into the facts and treated what, according to him, was undisclosed investment There is no new fact and the Income-tax Officer has proceeded mechanically without application of mind to the facts of this case. Thus there was no basis at all for initiating the proceedings in this case. In any event, valuation is always a question of opini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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