TMI Blog2021 (10) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. A person who is registered as a Registered Valuer cannot be a Valuation Officer. Section 16A of the Wealth Tax Act empowers the assessing officer to make a reference to a Valuation Officer, in a case, where the assessing officer is of the opinion that the fair market value of the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in that behalf or in any case, where having regard to the nature of the asset and other relevant circumstances, the assessing officer deems it necessary to do so. In the present case, the facts of the case reveal that the appellant has disclosed the closing stock of iron ore at ₹ 5,96,74,794/- as against the valuation of ₹ 11,10,01,980/- obtained by the authorized officer. The same fact could have led the assessing officer to believe that the appellant has suppressed the value of the asset in the return of income filed by him and the proper course of action would have been to get a valuation report done by the aforesaid Valuation Officers. If the stock in trade comes under the purview of Section 142(2A) of the Act of 1961, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act of 1961). The order was passed on 30.12.2009. 5. The appellant, being aggrieved by the assessment order, has preferred an appeal before the Commissioner of Income Tax (Appeals) and the Commissioner of Income Tax (Appeals) partly allowed the appeal of the appellant by an order dated 24/25.9.2013. The appellant thereafter preferred an appeal before the Income tax Appellate Tribunal (hereinafter referred to as the Tribunal) and the Tribunal by an order dated 22.9.2017 has dismissed the appeal. The appellant being aggrieved by the order passed by the Tribunal, has preferred the present appeal. 6. The learned counsel for the appellant has stated before this Court that the appellant's premises was searched in connection with the search in respect of Fiza Group cases on 7.2.2008. However, no search warrant was issued in the name of the appellant. The search was carried out under Section 133A in respect of the business place of the appellant. It has been further stated that there was a search in the residential premises of the appellant purported to be under the warrant of authorization in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal was justified in law in not holding that the reference to the valuation officer under the provisions of Section 142A of the Act by the search officer as regard to the estimation of cost of extraction of ore is Ultra Vires the provision of Section 142A of the Act and further without prejudice not ignoring such valuation report as having material errors and is made in violation of the principles of natural justice on the facts and circumstances of the case? 9. The undisputed facts of the case reveal that the appellant is a mining contractor and was operating the mines belonging to one Balaji Produce Company Group, a registered partnership firm, over the mines taken on lease from the Government of Karnataka. The appellant was excavating the mines for over two years and collected the excavated iron ore and as he was not able to sell the iron ore extracted for want of necessary permits either from the lease holders or from the Government, the mined ore was stocked in the mining area and in the valleys of the mining area. The ore was stored in hilly terrain and there was large extent of erosion of the oared mine on account of rains. 10. During the course of search, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port as the correct value of the stock as on 31.3.2008 to assess the income of the appellant. 13. The assessing officer also relied upon the statement given by the appellant under Section 131, dated 31.3.2008, wherein the appellant confirms the statement given under Section 132(4) on 14.3.2008 and accepted the valuation of ₹ 11,10,01,980/- as per the valuation report. 14. The appellant has objected to the assessing officer adopting the valuation given in the report of the Registered Valuer for the purposes of assessing the income of the appellant. 15. A Specific question of law has been framed by this Court in respect of the aforesaid issue i.e., substantial question law No.6 and specific grounds have also been raised in the memo of appeal in respect of the aforesaid issue. 16. The basic question, which arises before this Court is, whether the assessment order passed on a valuation report is opposed to the provisions of the Act of 1961, if the same has not been obtained by the assessing officer under Section 142A of the Act of 1961. 17. The undisputed facts of the case makes it very clear that the authorized officer, who is not the assessing officer, during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not satisfied with the accounts provided by an assesssee. As per Explanation to Section 142A, the 'Valuation Officer' has the same meaning as defined in clause (r) of Section 2 of the Wealth Tax Act, 1957 (hereinafter referred to as 'Wealth Tax Act'). 23. In the present case, the moot question that arises for consideration before this Court is, whether the person, who has valued the stock in trade i.e., stock of iron ore, was a person, who is a Valuation Officer, as defined under clause (r) of Section 2 of the Wealth Tax Act. 24. As per definition in Section 2(r) of the Wealth Tax Act, 'Valuation Officer' means, a person appointed as a Valuation Officer under Section 12A of the Wealth Tax Act and includes a Regional Valuation Officer, a District Valuation Officer, and an Assistant Valuation Officer. In other words, all these four categories of persons, namely Regional Valuation Officers, District Valuation Officers, Valuation Officers and Assistant Valuations Officer, would come under the definition of a Valuation Officer, provided, they are appointed as per Section 12A of the Wealth Tax Act. 25. Section 12A of the Wealth Tax Act reads as under; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee under section 14 or section 15 exceeds ₹ 10 lakhs but does not exceed ₹ 50 lakhs or if the asset is not disclosed or the value of the asset is not declared in such return or no such return has been made and the value of the asset, in the opinion of the Assessing Officer, falls within the aforesaid limits, the functions shall be performed by the Valuation Officer; and (iii) if the value of the asset as declared in the return made by the assessee under section 14 or section 15 does not exceed ₹ 10 lakhs, or if the asset is not disclosed or the value of the asset is not declared in such return or no such return has been made and the value of the asset, in the opinion of the Assessing Officer, does not exceed the aforesaid amount, the functions shall be performed by the Assistant Valuation Officer : Provided that the District Valuation Officer referred to in clause (i) having jurisdiction in respect of the area may, if he considers it necessary or expedient so to do for the purpose of proper and efficient management of the work of valuation, himself perform such functions in relation to any asset referred to in clause (ii) : Provided further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a Registered Valuer cannot be a Valuation Officer. 30. Section 16A of the Wealth Tax Act empowers the assessing officer to make a reference to a Valuation Officer, in a case, where the assessing officer is of the opinion that the fair market value of the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in that behalf or in any case, where having regard to the nature of the asset and other relevant circumstances, the assessing officer deems it necessary to do so. 31. In the present case, the facts of the case reveal that the appellant has disclosed the closing stock of iron ore at ₹ 5,96,74,794/- as against the valuation of ₹ 11,10,01,980/- obtained by the authorized officer. The same fact could have led the assessing officer to believe that the appellant has suppressed the value of the asset in the return of income filed by him and the proper course of action would have been to get a valuation report done by the aforesaid Valuation Officers. If the stock in trade comes under the purview of Section 142(2A) of the Act of 1961, the aforesaid Valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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