D.b. Income Tax Appeal v. D.b. Income Tax Appeal

D.B. INCOME TAX APPEAL NO.95/2007.Commissioner of Income Tax, AjmerVs. Smt. Meena Devi Mansinghka .. D.B. INCOME TAX APPEAL NO.96/2007.Commissioner of Income Tax, Ajmer Vs. Smt. Meena Devi Mansinghka .. D.B. INCOME TAX APPEAL NO.97/2007.Commissioner of Income Tax, Ajmer Vs. Smt. Meena Devi Mansinghka .. Date of Order :: 25[th] May 2007. HON'BLE MR. JUSTICE P.B. MAJMUDARHON'BLE MR. JUSTICE DINESH MAHESHWARI Mr. K.K. Bissa, for the appellant. ... These three appeals pertain to the assessment years1995-96, 1996-97 and 1998-99 relating to the same assesseeand have been filed against the common order dated19.08.2005 made by the Income Tax Appellate Tribunal,Jodhpur Bench, Jodhpur in the batch of appeals involvingcommon issues. While dealing with the assessment proceedings for theyear 1997-98, the Assessing Officer ('the AO') noticed that ahouse construction at Shastri Nagar, Bhilwara was completed by the assessee in the financial year 1997-98; the assesseedeclared total cost of construction at Rs. 8,00,000/- whereasaccording to the Departmental Valuation Officer's (DVO)Report its cost was Rs.18,13,100/-. On the basis of DVO'sReport, the AO added Rs.1,94,972/- in the assessment year1997-98 and initiated proceedings under Section 147/148 of theIncome Tax Act for the assessment years 1995-96, 1996-97and 1998-99 wherein the assessment order had already beencompleted. For the aforesaid three assessment years, the assesseechallenged the legality of the re-assessment under Section147/148 of the Act; and the Tribunal found that admittedlyreassessment was done only on the basis of DVO's Report.The Tribunal found proceedings based only on DVO's Report tobe invalid ab-initio relying on its earlier view that only on thebasis of DVO's Report particularly when the valuation was notreferred to by the AO during the relevant assessment years, itcannot be valid basis for formation of “reason to believe”. TheTribunal also noted that DVO's Report suffers from variousdefects or mistakes and relying on its earlier decision in thecase of Smt. Sohan Devi Sodhani decided on 07.02.2005, theTribunal quashed the reassessment proceedings. During the course of submissions, it is noticed that thesaid decision of the Tribunal in Smt. Sohan Devi Sodhani case has since been affirmed by a Division Bench of this Court inD.B. Income Tax Appeal No.130/2005. We have requisitionedthe record of the said IT Appeal No.130/2005 wherein this Courthas held,- “The Tribunal has clearly found that onlybasis for reopening the assessment forassessment year 1993-94 and 1996-97 was thereport of the Valuation Officer obtained during theassessment year 1997-98. It has also found thatDepartmental Valuation Officer has valued theconstruction raised by the assessee on the basisof B.S.R. Rates of 1998. On this premise, theTribunal has further found that since entireconstruction was not made in 1998 proposingeven number of years from financial year but wasmade in 1992-93 onwards the BSR rates of 1998of the cannot form basis of estimate of investmentshown in books of accounts by the Assessee forperiod prior to 1998. There being no othermaterial on the basis of which Assessing Officercould have reason to believe that the assesseehas under-disclosed the cost during the relevantassessment years, the formation of belief wasfounded on no material. This finding in our opinion, is a finding offact based on material available with the Tribunaland does not give rise to a question of law. It isobvious that B.S.R. Rates of 1998 can have norelevant bearing on assessment of investmentmade for financial year relevant to theassessment year 1996-97 and earlier years. This finding in our opinion, is a finding offact based on material available with the Tribunaland does not give rise to a question of law. It isobvious that B.S.R. Rates of 1998 can have norelevant bearing on assessment of investmentmade for financial year relevant to theassessment year 1996-97 and earlier years. In these circumstances, the formation ofbelief by the Assessing Officer about the underdisclosure of investment in construction of housebeing founded on no material, the Tribunal wasright in holding that the initiation of reassessmentproceedings were without jurisdiction.” Mohan/ In the present case too, the Tribunal has found thatmerely DVO's Report cannot be a ground for formation ofreasons to believe for the purpose of re-assessment and theTribunal has also pointed out that the DVO's Report suffersfrom various defects and mistakes. There being no materialavailable on record, the Tribunal cannot be said to have erred infinding re-assessment proceedings to be invalid ab-initio. In the facts and circumstances of the case, we aresatisfied with the correctness of the order passed by the learnedTribunal and find no substantial question of law being involvedin these appeals. The appeals are, therefore, dismissed summarily. (DINESH MAHESHWARI), J. (P.B. MAJMUDAR), J.