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TMI Blog1997 (12) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... the notices issued under section 17(1)(a) for reopening the assessments for the years 1978-79 to 1982-83. The details of the values that were returned originally by the assessee and the values assessed in the relevant years and the values adopted in the reopened assessments for the years 1978-79 to 1982-83 are as follows: ----------------------------------------------------- Asst. Value Value Value Year shown assessed assessed in the in the in the return original reopened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a report obtained by the assessee from the registered valuer. For the assessment year 1972-73, the assessee returned the same value as in the earlier years but the matter was referred to the DVO and on the basis of his report the value was determined at Rs. 4,05,000. The assessee disclosed the value at reduced figure in the assessment years 1973-74 to 1980-81 and in the assessment year 1980-81 the value shown was Nil. The value returned in the assessment year 1975-76 was again on the basis of the report of the registered valuer and the same was repeated by the assessee in the subsequent assessment years upto 1979-80. The Assessing Officer adopted the value of the land at Rs. 4,05,000 for all the assessment years i.e., 1972-73 to 1981-82 which is on the basis of a report obtained from the DVO. The assessee obtained a third report from the registered valuer for the assessment year 1982-83 and on this basis he returned the value of the land at Rs. 4,90,000 which was accepted by the Assessing Officer. Subsequently, the assessee sold the land vide the sale deed mentioned hereinabove for a sum of Rs. 16 lakhs and the Assessing Officer came to know of this sale deed when the assessee ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(a) is invalid in law. Taking a clue from a query of the Bench as to how the valuation report obtained by the assessee in respect of the market value of the land as on 1-1-1964, which apparently is dated 6-1-1984, was available with the Assessing Officer with application under section 230A, which admittedly was filed on 31-5-1983, the ld. counsel also sought to argue that he had filed the said report only on 25-1-1985 alongwith the income tax return for the assessment year 1984-85 and so, there is an apparent discrepancy in the reasons recorded by the Assessing Officer in this regard and as such the reasons recorded must be regarded as both incorrect and invalid in law. He has also sought to explain that even though he had valued the land in question at the maximum of Rs. 4,90,000 for the assessment year 1982-83 and for the earlier years at lesser figure, his claim that the market value of the land as on 1-1-1964 was as high as Rs. 11,75,500, was not false because the value of the land is subject to fluctuations and depends inter alia upon the municipal regulations which have a bearing on the value of the land. Till the assessment year 1966 the land was in a residential zone and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 984-85. He filed before us the relevant order-sheet entries recorded by the Assessing Officer in the context of the issue of the certificate under section 230A and also in the context of referring the property to the Valuation Officer for ascertaining its market value as on 1-1-1964. The entry made in the context of the issue of the certificate under section 230A is dated 18-8-1983 and reads as follow: "The Executors and Trustees of the Estate of late Shri Ratanchand Hirachand; Mr. Rajas R. Doshi & Arvind R. Doshi have applied for as certificate under section 230A of the IT act 1961 for executing sale deed of the property situated at Chaturshringi Hill, Survey No. 87/A-1/17/87/A-1/3 and 87-B Village Aundh Ta. Pune-16. The above land admeasuring total area of 103 Acres and 21 Guntas is to be transferred to M/s. Walchandnagar Industries Ltd. by means of sale deed by the above Executors at Sub-Registrar's of assurance old customs house Bombay for A total consideration of Rs. 16,00,000. The above land has been reflected in the assessee's W.T. Return. There are income-tax demands outstanding in respect of late Shri Ratanchand Hirachand as detailed below: (1) I.T. demand assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 3-3-1983 showing the consideration at Rs. 16 lakhs on the date he recorded the reasons for opening the assessments for all the years under appeal. He, however, could not produce before us the reasons recorded for the two assessment years i.e., 1978-79 and 1979-80. He mentioned that with the lapse of time, the reasons recorded for these two years are not traceable in the files. He pleaded that there is a big difference between the value declared by the assessee for the assessment years involved and the sale consideration shown in the sale deed dated 3-3-1983. Adverting to the argument of the ld. counsel for the assessee that the assessments could not be reopened simply on the basis of a consideration paid by a speculative buyer, he pleaded that it is unimaginable that even a speculative buyer would pay an amount which is more than three times the disclosed market value for the assessment year 1982-83. The ld. Departmental Representative claimed that where there is a substantial discrepancy between the disclosed value and the sale consideration received, the issue of notice under section 17(1)(a) is entirely valid and in this context he relied upon the ratio of the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dar Adam cited are distinguishable. In the case of Tulsidas Kilachand cited, the Hon'ble Bombay High Court held that there is no sufficient material for reopening of the assessment under section 17(1)(a) simply because a subsequent valuer has valued the property at a higher figure than the former. In the present case, the reopening is made on the basis of the value disclosed in a registered sale deed and not on the basis of the valuer's report. So, the case is distinguishable. In the case of M.V. Kibe cited, the Hon'ble Madhya Pradesh High Court only held that the first appellate authority could not force the Assessing Officer to refer an asset for valuation by the Valuation Officer but the issue involved in the present case is totally different. In the case of Rajan P. Shah cited, the Hon'ble Gujarat High Court held that when all the primary facts were disclosed, the reopening of the assessment on the ground of understatement of investment, is not valid. In this case there is no reference to any circumstance like the subsequent sale deed showing disproportionately higher value. In the case of Pat Ramaswamy Chettiar cited, the assessment was reopened on the basis of the higher valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be open to the assessee, in proceedings pursuant to the notice, to contest the same on all such grounds as he might be advised. The writ petition was dismissed." We are of the view that the issue raised in this appeal is squarely covered by the above decision of the jurisdictional High Court. Even in the present case the assessment is not reopened because of debatable material like an audit objection or valuer's report. There is controvertible evidence of the market value as contained in the sale deed and on this basis the Assessing Officer had reason to believe that the values disclosed by the assessee for the earlier years were grossly understated. We may also mention that there is no objective factor like a change in the municipal regulations which explains the increase in market value after 1981. According to the contention made out before us, the land in question had a higher value till it was marked as a 'Naked Hill Zone' in 1966 because construction was prohibited after 1966. To a query from the Bench, the learned counsel for the assessee explained that no construction was permitted even after it was marked as 'Hill top Hill Slopes Zone' in 1981. If that was so, we fail t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessments should be remade after referring the valuation of the land mentioned hereinabove to the Valuation Officer under section 16A. No arguments have been advanced by the ld. counsel for the assessee in support of this contention. Further, we do not find any merit in this contention because the earlier assessments had been completed on the basis of the report given by the DVO for the assessment year 1972-73 and because of the distance in time such a valuation has no particular relevance for the assessment years 1980-81 to 1982-83; we are of the view that the Dy. CIT (Appeals) was quite justified in directing the Assessing Officer to refer the matter once again to the Valuation Officer for a fresh valuation as on the relevant dates. Even the decision of the Hon'ble Madhya Pradesh High Court in the case of M.V. Kibe cited, which held that the first appellate authority cannot force the Assessing Officer to refer a matter to the Valuation Officer, is distinguishable inasmuch as in the present case the assessments had been completed on the basis of the report of the Valuation Officer and so the direction of the Dy. CIT (Appeals) in the present does not tantamount to usurpat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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