Itta/467/2011 Of The Commissioner Of Income Tax (Central) v. Sri M.s.raju

THE HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKURANDTHE HON’BLE SHRI JUSTICE SANJAY KUMAR ITTA No. 467 OF 2011 DATED:27-01-2012 Between:The Commissioner of Income Tax (Central),Hyderabad. … Appellant And M/s. M.S. Raju, Hyderabad. …. Respondent THE HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKURANDTHE HON’BLE SHRI JUSTICE SANJAY KUMAR I.T.T.A. No. 467 OF 2011 JUDGMENT:(per the Hon’ble the Chief Justice Shri Madan B. Lokur) 1. The Revenue is aggrieved by an order dated 26.2.2008 passed bythe Income Tax Appellate Tribunal, Hyderabad in I.T.A. No. 737/Hyd/06,relevant for the assessment year 2003-04. 2. The assessee had purchased four (4) built up properties throughregistered documents. The properties were registered at the ratesprescribed by the Sub-Registrar’s Office. 3. When the assessee filed his returns, the Assessing Officer decidedto refer the valuation of the properties to the Valuation Cell. 4. The Valuation Cell assessed the properties and came to theconclusion that the total under-valuation of the properties was to theextent of Rs.41.35 lakhs. On this basis, the Assessing Officer, came tothe conclusion that the assessee had some undisclosed income and thatwas accordingly taxed. 5. Feeling aggrieved, the assessee preferred an appeal, which wasallowed by the Commissioner of Income Tax (Appeals). TheCommissioner of Income Tax (Appeals) was of the view that theingredients of Section 142-A of the Income Tax Act, 1961 (for short ‘theAct’) had not been made out for making a reference to the Valuation Cell. For this, reliance was placed on several decisions of the Tribunal fromacross the country. On the basis of the view taken by the Tribunal in allthese cases, the Commissioner of Income Tax (Appeals) came to theconclusion that the addition of Rs.41.35 lakhs to the income of the assessee on account of unexplained investment was not justified andit was accordingly deleted. 6. Feeling aggrieved, the Revenue preferred an appeal, which cameto be dismissed by the Tribunal. 7. In our opinion, the Tribunal rightly held that there was absolutelyno material available for the Assessing Officer to come to the conclusionthat there was under-valuation of the properties. There was nothing tosuggest that the books of accounts maintained by the assessee were notin order nor was there any hint of a suggestion that the books of accountswere rejected. There was also no information with the Assessing Officerthat some “on money” was paid by the assessee. In the absence of anymaterial to refer the case to the Valuation Cell, the provisions of Section142-A of the Act would not apply. 8. In our opinion, there was no error in the view that has been takenby the Tribunal. The Assessing Officer could not refer the matter to theValuation Cell merely because he had the power to do so. There must bea reason for referring the matter to the Valuation Cell and there is no suchreason discernible from the records of the case. 9. In our opinion, no substantial question of law arises forconsideration in this appeal. 10. The appeal is accordingly dismissed. MADAN B. LOKUR, CJ 27-01-2012 SANJAY KUMAR, J pnb