Legend Estates Privat Ltd.,, Hyderabad v. DCIT, Hyderabad

ITA 1542/HYD/2010 | 2007-2008
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 154222514 RSA 2010
Assessee PAN AAACL9640A
Bench Hyderabad
Appeal Number ITA 1542/HYD/2010
Duration Of Justice 1 year(s) 3 month(s) 20 day(s)
Appellant Legend Estates Privat Ltd.,, Hyderabad
Respondent DCIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-03-2012
Date Of Final Hearing 04-05-2011
Next Hearing Date 04-05-2011
Assessment Year 2007-2008
Appeal Filed On 10-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A' HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER I.T.A. NO. 1542/HYD/2010 ASSESSMENT YEAR : 2007-08 M/S. LEGEND ESTATES PVT. LTD. HYDERABAD PAN: AAACL9640A V S. DY. COMMISSIONER OF INCOME - TAX CIRCLE-16(1) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI A.V.RAGHU RAM RESPONDENT BY: SHRI V. SRINIVAS DATE OF HEARING: 08 . 02 .201 2 DATE OF PRONOUNCEMENT: 30.03.2012 O R D E R PER CHANDRA POOJARI AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-V HYDERABAD DATED 13.10.2010 FOR ASSESS MENT YEAR 2007-08. 2. THE ASSESSEE RAISED THE FOLLOWING REVISED GROUNDS O F APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) DISMISSING THE APPEAL OF THE APPELLANT IS PERVERSE ILLEGAL AND UNSUSTAINABLE IN LAW. 2. THE LD. CIT(A) FAILED TO APPRECIATE THAT AT THE VER Y THRESHOLD REFERENCE TO DVO BY THE AO U/S. 142A OF THE INCOME-TAX ACT IS WITHOUT JURISDICTION AND CONTRARY TO THE RATIO LAID DOWN BY SUPREME COURT IN THE CASE OF AMIYA BALA PAUL AND CONSEQUENTLY THE ADDITION MADE BY THE AO OF RS. 6 51 05 016 BASED ON SUCH REPORT OF THE DVO IS ILLEGAL AND UNSUSTAINABLE IN LAW AS HELD BY SUPREME COURT AND THEREBY ERRED IN CONFIRMING THE ADDITION HOLDING THE REFERENCE TO VALUATION CELL TO BE VALID . 3. WITHOUT PREJUDICE THE LD. CIT(A) FAILED TO APPRECIATE THAT WHEREAS THE COST OF FLATS SUBMITTED BY THE APPELLANT PERTAINED TO MATERIALS COST THE I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 2 COST DETERMINED BY THE DVO IS INCLUSIVE OF ADMINISTRATIVE AND SUPERVISORY CHARGES. THE LD. CIT(A) THEREFORE OUGHT TO HAVE DIRECTED EITHER TO INCLUDE ADMINISTRATIVE AND SUPERVISORY CHARGES TO THE COST SUBMITTED BY THE APPELLANT OR SHOULD HAVE DIRECTED THE DELETION OF ADMINISTRATIVE AND SUPERVISORY CHARGES FROM THE VALUE ARRIVED AT BY THE DVO. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE SINCE THE DIFFERENCE IN COST ARRIVED AT BY THE DVO AND THAT OF THE COST SUBMITTED BY THE APPELLANT (AFTER TAKING INTO ACCOUNT ADMINISTRATIVE AND SUPERVISORY CHARGES) IS BELOW 10% OF THE TOTAL COST DETERMINED THE LD. CIT(A) OUGHT TO HAVE DIRECTED FOR DELETION OF THE ADDITION MADE BY THE AO. 5. THE LEARNED CIT(A) FURTHER FAILED TO APPRECIATE THE FACT THAT IN THE EARLIER YEARS THE ASSESSMENTS WERE MADE AFTER SCRUTINY AND REFERENCE TO VALUATION CELL TO ESTIMATE THE EXPENDITURE OF EARLIER YEAR BY REFERENCE TO VALUATION CELL TANTAMOUNT TO INTERFERING WITH THE CONCLUDED ASSESSMENTS FOR WHICH HE HAS NO JURISDICTION TO DO. 6. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ADMISSION OF ADDITIONAL INCOME BY THE ASSESSEE TOWARDS DAY TO DAY EXPENSES WITHOUT APPRECIATING THE FACT THAT SUCH HUGE AMOUNT COULD NOT BE FOR DAY TO DAY EXPENSES AND FOR A BUILDER THE DAY TO DAY EXPENSES COULD BE ONLY TOWARDS HIS BUSINESS ACTIVITY AND NOT OTHERWISE AND THEREBY ERRED IN NOT CONSIDERING SET OFF OF SUCH DISCLOSED AMOUNT FROM THE ADDITION THAT IS MADE. 3. THE ASSESSEE RAISED THE GROUND WITH REGARD TO SUSTA INING OF ADDITION MADE BY THE ASSESSING OFFICER U/S. 69C OF THE INCOME-TAX ACT 1961 BEING THE DIFFERENCE BETWEEN COST OF CON STRUCTION OF FLAT AS PER BOOKS OF ACCOUNT OF THE ASSESSEE AND THAT OF VALUATION MADE BY THE DVO AS PER REFERENCE MADE U/S. 142A OF THE A CT THOUGH THE ASSESSING OFFICER HAD NO SUCH POWER IN CASE OF ADDITIONS MADE U/S. 69C OF THE ACT. 4. BRIEF FACTS OF THE CASE ARE THAT FOR THE A.Y. 2007- 08 THE ASSESSEE FILE A REVISED RETURN OF INCOME ON 1.12.20 07 DECLARING I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 3 TOTAL TAXABLE INCOME AT RS. 1 78 23 580 WHICH WAS P ROCESSED U/S. 143(1) OF THE INCOME-TAX ACT 1961 ON 6.2.2009. IT IS ALSO ON RECORD THAT THERE WAS A SURVEY U/S. 133A OF THE ACT AT THE PREMISES OF THE ASSESSEE ON 23.8.2006. DURING THE COURSE OF SURVEY IT WAS FOUND THAT THERE WERE CERTAIN CASH PA YMENTS TOWARDS CONSTRUCTION MATERIALS LIKE SAND BRICKS ETC. AND OTHER ITEMS WHOSE EXPENDITURE WAS NOT FULLY VERIFIABLE. THE ASSESSEE HAS NOT MAINTAINED DAY TO DAY STOCK REGISTER. THE QUANTIFICATION OF LABOUR CHARGES IS ALSO NOT AVAILABLE. KEEPING I N VIEW ALL THE DISCREPANCIES FOUND DURING THE COURSE OF SURVEY TH E MATTER WAS REFERRED BY THE ASSESSING OFFICER U/S. 142A OF THE ACT TO THE DVO. THE DVO FURNISHED THE VALUATION REPORT OF CONSTRUCT ION AT RS. 55 83 06 733. ACCORDING TO THE ASSESSEE'S BOOKS OF ACCOUNT THE COST OF CONSTRUCTION WAS RS. 38 58 53 602. THE DIF FERENCE IS WORKED OUT AT RS. 17 24 53 131. THE DIFFERENCE WAS APPORTIONED AMONG THE A.YS. 2004-05 TO 2008-09 AND THE AMOUNT A TTRIBUTABLE TO THE ASSESSMENT YEAR UNDER CONSIDERATION IS AT RS . 6 51 01 056. ADDITION WAS MADE U/S. 69C OF THE ACT. AGAINST THI S ADDITION THE ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER IS HAVING NO P OWER TO REFER THE MATTER TO THE DVO. HE SUBMITTED THAT U/S 142A OF THE ACT ONLY INVESTMENT REFERRED TO IN SECTIONS 69 69A 69 B CAN BE REFERRED TO DVO AND NOT THE INVESTMENT REFERRED IN SECTION 69C OF THE ACT FOR THIS PURPOSE HE RELIED ON THE FOLLOWI NG JUDGEMENTS: A) CIT VS. AAR PEE APARTMENTS (P) LTD. 319 ITR 276 (D EL) B) RAJ HANS BUILDERS VS. DCIT 41 SOT 331 (AHD) 6. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE T HE INVESTMENT MADE BY THE ASSESSEE IN CONSTRUCTION HAS BEEN SHOWN AS CURRENT ASSET AND IT IS NOT AN INVESTMENT REFERR ED TO IN SECTION 69 69A AND 69B OF THE ACT. HE DREW OUR ATTENTION TO THE I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 4 DICTIONARY MEANING OF THE WORD 'INVESTMENT' AS PER LAW LEXICON 'WHICH MEANS IN ECONOMIC TERMS CAPITAL EXPENDITURE ON PHYSICAL PRODUCTIVE ASSETS FOR EXAMPLE MACHINERY FACTORY BUILDING ROADS PROJECTS HOUSES AND OR STOCKS.' INVESTMENT IS AN EXPENDITURE TO ACQUIRE PROPERTY OR OTHER ASSETS. IN ORDER TO PROD UCE REVENUE THE ASSETS WERE ACQUIRED. PLACING OF CAPITAL OR LAYING OUT OF MONEY IS INTENDED TO SECURE INCOME OR PROFITS FROM ITS EMPLO YMENT. 7. ON THE OTHER HAND THE LEARNED DR SUBMITTED THAT TH E ADDITION IN THIS CASE WAS MADE U/S. 69C OF THE ACT AND THERE IS NO MENTION IN THE ASSESSMENT ORDER AND EVEN IF IT IS M ADE U/S. 69C IT IS NOT FATAL. THE PROVISIONS OF SECTION 292BB TAK E CARE OF SUCH KIND OF MISTAKES AND IT DOES NOT MAKE THE ASSESSMEN T ORDER NULL AND VOID BEING IT IS A CURABLE MISTAKE. THERE IS N O DIFFERENCE BETWEEN THE INVESTMENT AND CURRENT ASSETS FOR THE P URPOSE OF APPLICATION OF SECTION 142A. WHEN THE SECTION REQU IRES TO MAKE ANY MENTION IT IS SPECIFICALLY MADE IN THAT SECTION . HE DREW OUR ATTENTION TO THE PROVISIONS OF SECTION 55A OF THE A CT WHEREIN THE SECTION IS RESTRICTED TO CAPITAL ASSETS ONLY. ACCO RDING TO THE HIM SECTION 69C REFERS TO UNRECORDED INVESTMENT. SECTI ON 69B IS APPLICABLE TO UNDER VALUATION OF INVESTMENT AND IN THIS CASE THERE IS NO UNDER VALUATION OF RECORDED INVESTMENT. HE D ISTINGUISHED THE JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF 31 9 ITR 276 (SUPRA). IN COUNTERING THE ARGUMENT OF THE ASSESSE E'S COUNSEL HE RELIED ON THE DECISIONS IN THE CASE OF DCIT VS. ABD UL LATIF (53 DTR 250) SMT. KIRAN LATA VS. ITAT (177 TAXMAN 420) AD DL. CIT VS. PINNACLE PROJECT & INFRASTRUCTURE (P) LTD. (104 ITD 122) AND ACIT VS. NALANDA HOUSING DEV LTD. (98 TTJ 518). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. FIRST OF ALL WE HAVE TO GO THROUGH THE PROVISION OF SEC. 142A OF THE ACT TO CO NSIDER THE ISSUE IN HAND. I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 5 THE RELEVANT PROVISION SUB-SECTION-1 OF SEC.142A READS AS UNDER:- 142A (1) FOR THE PURPOSES OF MAKING AN ASSESSMENT OR REASSESSMENT UNDER THIS ACT WHERE AN ESTIMATE OF T HE VALUE OF ANY INVESTMENT REFERRED TO IN SECTION 69 O R SECTION 69B OR THE VALUE OF ANY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE REFERRED TO IN SECTION 69A OR SECTION 69B I S REQUIRED TO BE MADE THE ASSESSING OFFICER MAY REQUIRE THE VALUATION OFFICER TO MAKE AN ESTIMATE OF SUCH VALUE AND REPORT THE SAME TO HIM. 9. WE FIND FROM THE FACTS OF THE CASE THAT THERE WAS A SURVEY U/S 133A OF THE INCOME TAX ACT ON 23-08-2006. DURIN G COURSE OF SURVEY IT WAS FOUND THAT THERE WERE CERTAIN CASH P AYMENTS TOWARDS CONSTRUCTION MATERIAL LIKE SAND BRICKS ETC AND OTHER ITEMS WHOSE EXPENDITURE WAS NOT FULLY VERIFIABLE. THE ASSESSEE HAS NOT MAINTAINED DAY TO DAY STOCK REGISTERS. THE QUANTIFICATION OF LABOUR PAYMENTS WAS ALSO NOT AVAILABLE. SINCE T HE EXPENDITURE INCURRED BY THE ASSESSEE WAS NOT FULLY SUPPORTED BY VOUCHERS AND PROPER EVIDENCE THE ASSESSEE OFFERED ADDITIONAL IN COME TO THE TUNE OF RS. 1.60 CRORES. IN MEAN TIME THE ASSESSING OFF ICER MADE REFERENCE TO THE DISTRICT VALUATION OFFICER ON 04-0 9-2006 AND THE DVO SUBMITTED THE VALUATION REPORT ON 14-09-2009 AS PER WHICH THE COST OF CONSTRUCTION OF THE 22 PROPERTIES WAS A RRIVED AT RS55 83 05 733/-. THE ASSESSEE HAS DISCLOSED THE C OST OF CONSTRUCTION OF THESE PROPERTIES IN ITS BOOKS AT RS .38 58 53 602. THE DIFFERENCE BETWEEN THESE TWO WAS WORKED AT RS. 17 24 53 131/- WHICH WAS SPREAD OVER TO 5 ASSESSMEN T YEARS. THE UNEXPLAINED EXPENDITURE RELATING TO THIS ASSESSMENT YEAR 2007-08 WAS WORKED OUT AT RS. 6 51 01 056/-. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THERE IS NO REFERENCE TO ANY MATERIAL/EVIDENCE/INFORMATION ON THE BASIS OF WHICH IT COULD BE SAID THAT THE COST OF CONSTRUCTION WAS SHOWN BY ASS ESSEE WAS UNDERSTATED OR ANYTHING ABOVE WHAT WAS DISCLOSED BY ASSESSEE IN THE BOOKS OF ACCOUNT. IT IS A CLEAR CUT CASE THAT T HE ASSESSEE HAS I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 6 PRODUCED THE BOOKS OF ACCOUNT BUT THE ASSESSING OFF ICER HAS NOT REJECTED OR NO DEFECT WAS POINTED OUT IN THE BOOKS OF ACCOUNT REGARDING COST OF CONSTRUCTION OF THE PROJECT BEFOR E REFERENCE TO THE DVO. WE FURTHER FIND FROM THE CASE RECORDS THAT EVE N BEFORE VERIFYING THE BOOKS OF ACCOUNT REGULARLY MAINTAINED AND WITHOUT POINTING OUT ANY DEFECTS IN THE BOOKS THE COST OF C ONSTRUCTION WAS REFERRED TO DVO. WE ARE OF THE VIEW ON THE BASIS O F EVIDENCES PRODUCED BEFORE US THAT THE ASSESSEE HAS REGULARLY MAINTAINED BOOKS OF ACCOUNT AND VARIOUS RECORDS ALONG WITH SUP PORTING EVIDENCES OF VARIOUS RAW MATERIALS LIKE CEMENT STE EL BRICKS SAND WOOD LABOUR COST SANITARY WARES ETC. BUT THE AO H AS NOT FOUND OUT ANY DEFECT IN THE BOOKS/RECORDS/BILLS ETC. AND HAS NOT REJECTED BOOKS OF ACCOUNT. WITHOUT CAUSING ANY DEFECTS IN BO OKS REGULARLY MAINTAINED AND WITHOUT REJECTING THE BOOKS U/S.145 OF THE ACT THERE IS NO REASON TO ADD ANY AMOUNT ON THE PRESUMP TION THAT THE COST/INVESTMENT IN CONSTRUCTION IS LOW. THUS WITHO UT REJECTING THE BOOKS OF ACCOUNT REGULARLY MAINTAINED THE ADDITION CANNOT BE MADE ONLY ON THE BASIS OF THE DVOS REPORT. WE FURT HER FIND THAT THE ASSESSEE HAS SUPPLIED REQUISITE INFORMATION TO DVO AND ALSO PRODUCED BEFORE ASSESSING OFFICER WHICH HE HAS SEEN AND VERIFIED BUT HAS NO COMMENTED ON THE GENUINENESS OF THE BILL S AND NOT POINTED OUT ANY DEFECTS IN THE BILLS AND HENCE NOT REJECTED THE RECORDS MAINTAINED AND PRODUCED BY ASSESSEE. 10. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES THE P ROVISION OF SEC.142A OF THE ACT WE ARE OF THE VIEW THAT NO PROCEEDINGS WERE PENDING AT THE TIME OF REFERENCE MADE TO THE DVO I. E 04.09.2006 ON REGARDING ASCERTAINMENT OF COST OF CONSTRUCTION OF THE PROJECT AS THE RETURN OF INCOME IN THIS CASE IS FILED ONLY ON 01.12.2007. WE FIND FROM THE STARTING WORDS OF THE SECTION THAT FOR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT UNDER THIS ACT ONCE THE PROCESS OF ASSESSMENT IS INITIATED THE WORD MAKIN G SHOULD BE PRESUMED TO BE ASSOCIATED WITH BOTH ASSESSMENT OR I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 7 REASSESSMENT THE REFERENCE U/S. 142A OF THE ACT CAN BE MADE. WHEN THERE IS PROCESS OF ASSESSMENT WHICH IS INITI ATED AFTER FILING OF THE RETURN OF INCOME OR ISSUANCE OF NOTICE U/S. 142(1) AND SIMILARLY THE PROCESS OF REASSESSMENT COULD BE INI TIATED ONLY AFTER ISSUANCE OF NOTICE U/S.148(1) AFTER DULY FULFILLING THE FORMALITIES MENTIONED THEREIN THE REFERENCE U/S.142A OF THE AC T CAN BE MADE. IT CLEARLY SHOWS THAT THE INVOKING OF SEC. 142A IS A PROCESS AFTER THE INITIATION OF THE ASSESSMENT PROCEEDINGS. FURTH ER IT IS MENTIONED IN THIS SECTION THAT WHERE ESTIMATE OF T HE VALUE OF ANY INVESTMENT REFERRED TO IN SEC. 69 IS REQUIRED TO BE MADE. THIS ALSO SHOWS THAT A REFERENCE TO DVO U/S. 142A CAN BE MADE ONLY WHEN A REQUIREMENT IS FELT BY THE AO FOR MAKING SUCH REF ERENCE. REQUIREMENT WOULD ARISE OR COULD BE FELT ONLY WHEN THERE IS SOME MATERIAL WITH THE AO TO SHOW THAT WHATEVER ESTIMATE ASSESSEE HAS SHOWN IS NOT CORRECT OR NOT RELIABLE. THE USE OF WO RD REQUIRE IS NOT SUPERFLUOUS BUT SIGNIFIES A DEFINITE MEANING WHEREB Y SOME PRELIMINARY FORMATION OF MIND BY THE AO IS NECESSAR Y WHICH REQUIRES HIM TO MAKE A REFERENCE TO THE DVO U/S142A . IT CAN ONLY BE DURING THE COURSE OF PENDENCY OF ASSESSMENT OR R EASSESSMENT THAT THE AO FRAME HIS MIND TO REFER THE PROPERTY TO VALUATION CELL OF THE DEPARTMENT. SUCH MIND CAN BE FRAMED IF THERE IS A BASIS TO THINK THAT THE ASSESSEE MAY HAVE UNDERSTATED THE CO ST OF CONSTRUCTION OR WHATEVER IS DECLARED BY HIM IN THIS REGARD IS NOT BELIEVABLE. THEREFORE IT IS QUITE APPARENT THAT RE FERENCE TO VALUATION CELL U/S.142A CAN BE MADE DURING THE COUR SE OF ASSESSMENT AND REASSESSMENT AND NOT FOR THE PURPOSE FOR INITIATING ASSESSMENT. THIS VIEW IS CLEARLY SUPPORT ED BY THE DECISION OF AHMEDABAD BENCH IN THE CASE OF UMIYA CO -OPERATIVE HOUSING SOCIETY LTD. V ITO (2005) 94 TTJ 392 (AHD) WHEREIN IT IS HELD AS UNDER:- 7. FROM THE ABOVE IT IS EVIDENT THAT S.142A EMPOW ERS THE AO TO REQUIRE THE VALUATION OFFICER FOR MAKING THE ESTIMATE OF THE VALUE OF ANY ASSET PROVIDED THE AO REQUIRED THE SAME FOR THE PURPOSE OF MAKING THE I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 8 ASSESSMENT OR REASSESSMENT. HE ABOVE PROVISION DOES NOT EMPOWER THE AO TO REFER THE MATTER TO THE DVO F OR GATHERING INFORMATION FOR REOPENING OF ASSESSMENT. MAKING THE REASSESSMENT AND REOPENING OF ASSESSMENT ARE TWO DIFFERENT THINGS. 8. WHEN THE PROCESS OF REOPENING OF ASSESSMENT ENDS AND THE ASSESSMENT IS VALIDLY REOPENED THEREAFTER T HE PROCESS OF MAKING REASSESSMENT STARTS. THEREFORE EV EN AFTER THE INSERTION OF S.142A THE AO SHOULD HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AS PROVIDED UNDER S. 147 AND THEREAFTER ONLY THE NOTICE FOR REASSESSMENT CAN BE ISSUED UNDER S. 148. EVEN AFTER THE INSERTION OF S. 142A THERE IS NO AMENDMENT IN THE LANGUAGE OF S. 147. THEREFORE THE CONDITION PRESCRIBED UNDER S. 147 FO R REOPENING OF ASSESSMENT STILL EXITS. THE HONBLE GAUHATI HIGH COURT IN THE CASE OF BHOLA NATH MAJUMDAR AND THE TRIBUNAL JODHPUR BENCH IN THE CASE OF VIJAY KUMAR (SUPRA) HAVE TAKEN THE VIEW THA T THE VALUATION REPORT IS ONLY AN OPINION OF THE VALU ER AND AN OPINION OF A THIRD PARTY CANNOT BE A REASON TO B ELIEVE OF THE ITO. THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF JAMNADAS MADHAVJI & CO. (SUPRA) HAS HELD THAT TH E AO CANNOT ISSUE SUMMONS UNDER S. 131 FOR THE PURPOS E OF MAKING INVESTIGATION FOR REOPENING OF THE ASSESSMENT. 11. THE ABOVE DECISION OF THE TRIBUNAL HAS BEEN CONFIR MED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT V. UMIYA CO-OPERATIVE HOUSING SOCIETY LTD. IN TAX APPEALS NO .1496 TO 1498 OF 2005 DATED 12-07-2006 WHEREIN IT IS HELD AS UND ER:- THE SHORT CONTROVERSY INVOLVED IN THESE APPEALS WHETHER THE ASSESSING OFFICER CAN REFER ANY MATTER FOR VALUATION OF THE PROPERTY OF AN ASSESSEE THOUGH ASSESSMENT AND / OR REASSESSMENT PROCEEDINGS ARE NO T PENDING. THE TRIBUNAL IS OF THE VIEW THAT WHEN THE ASSESSMENT PROCEEDINGS ARE NOT PENDING THE ASSESSIN G OFFICER HAS NO JURISDICTION AND IS NOT EMPOWERED TO REFER ANY PROPERTY FOR VALUATION TO THE VALUATION OFFICER. THE TRIBUNAL HAS DISCUSSED THIS ISSUE AS U NDER: 8. WHEN THE PROCESS OF REOPENING OF ASSESSMENT ENDS AND THE ASSESSMENT IS VALIDLY REOPENED THEREAFTER THE PROCESS OF MAKING REASSESSMENT STARTS. THEREFORE E VEN AFTER THE INSERTION OF SECTION 142A THE ASSESSING I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 9 OFFICER SHOULD HAVE REASON TO BELIEVE THAT ANY INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AS PROVIDE D U/S.147 AND THEREAFTER ONLY THE NOTICE FOR REASSESSMENT CAN BE ISSUED U/S.148. EVEN AFTER THE INSERTION OF SECTION 142A THERE IS NO AMENDMENT IN THE LANGUAGE OF SECTION 147. THEREFORE THE CONDITION PRESCRIBED U/S.147 FOR REOPENING OF ASSESSMENT STIL L EXISTS. THE HONBLE GAUHATI HIGH COURT IN THE CASE OF BHOLA NATH MAJUMDAR AND THE ITAT JODHPUR BENCH IN THE CASE OF VIJAY KUMAR (SUPRA) HAVE TAKEN THE VIEW THAT THE VALUATION REPORT IS ONLY AN OPINION OF THE VALUER AND AN OPINION OF A THIRD PARTY CANNOT BE A REASON TO BELIEVE OF THE ITO. THE HONBLE BOMBAY HIGH COURT I N THE CASE OF JAMNADAS MADHAVJI AND CO.(SUPRA) HAVE HELD THAT THE ASSESSING OFFICER CANNOT ISSUE SUMMON S U/S. 131 FOR THE PURPOSE OF MAKING INVESTIGATION FO R REOPENING OF THE ASSESSMENT. 9. IN VIEW OF THE ABOVE WE ARE OF THE OPINION THAT THE ISSUE OF NOTICES U/S.148 IN ALL THREE YEARS UNDER CONSIDERATION WAS NOT IN ACCORDANCE WITH LAW. WE THEREFORE QUASH THE NOTICES ISSUED U/S.148 AND CONSEQUENTLY THE ASSESSMENTS COMPLETED IN PURSUANCE TO NOTICES U/S. 148 ARE ALSO QUASHED. SINCE THE ASSESSMENT ITSELF HAS BEEN QUASHED THE GROUNDS RAISED BY BOTH THE PARTIES WITH REGARD TO THE MERIT S OF THE ADDITIONS FOR UNDISCLOSED INVESTMENTS IN THE HO USE PROPERTY NEED NO ADJUDICATION AT THIS STAGE BECAUSE ONCE THE ASSESSMENT IS CANCELLED THE ADDITION DOES NOT SURVIVED. MR. BHATT HAS MAINLY EMPHASIZED ON SECTION 142A OF THE ACT. HE SUBMITS THAT THE ASSESSING OFFICER AT A NY TIME CAN MAKE REFERENCE TO THE VALUATION OFFICER FO R VALUING THE PROPERTY FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT WHERE THE VALUE OF ANY INVESTMENT REFERRED TO IN SECTION 69 OR SECTION 69B OR SECTION S 69A & 69B IS REQUIRED TO BE MADE. WHETHER ANY INCOME CA N BE TAXED BY DEEMING THE VALUE OF INVESTMENT NOT DISCLOSED ARE ISSUES WHERE SUCH TYPES OF QUESTIONS ARISE WHILE SOME PROCEEDINGS ARE PENDING FOR ASSESSMENT. IN ABSENCE OF SUCH PROCEEDINGS THE ASSESSING OFFICER CANNOT REFER ANY PROPERTY FOR VALUATION TO VALUATION OFFICER. IN OPENING PART OF SECTION 142A THE WORDS USED ARE FOR THE PURPOSES OF MAKING AN ASSESSMENT OR REASSESSMENT UNDER THE ACT. THE INTENT OF THE LEGISLATION IS THAT THE MATTER CAN BE REFERRED TO T HE I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 10 VALUATION OFFICER ONLY WHEN THE PROCEEDINGS OF ASSESSMENT OR REASSESSMENT ARE PENDING BEFORE THE ASSESSING OFFICER. WHEN NO SUCH PROCEEDINGS ARE PENDING THE ASSESSING OFFICER HAS NO JURISDICTION TO REFER ANY PROPERTY FOR ASSESSMENT. WHEN THE NOTICE U/S.148 HAS BEEN ISSUED AND ADDITI ON HAS BEEN MADE BY ADOPTING THE VALUE ESTIMATED BY TH E VALUATION OFFICER AND WHEN WE FOND THAT THE ASSESS ING OFFICER IS NOT EMPOWERED TO REFER ANY PROPERTY FOR VALUATION IN A CASE WHERE NO ASSESSMENT PROCEEDINGS OR REASSESSMENT PROCEEDINGS OF THE ASSESSEE IS PENDING BEFORE HIM WE SEE NO JUSTIFICATION TO MAKE ANY ADDITION IN SUCH CASES. EVEN THE HONBLE APEX COURT HAS ALSO DISMISSED THE SLP OF THE REVENUE IN THIS CASE AND AFFIRMED THE JUDGMENT OF HONBLE HIGH COURT IN SLP NO. CC 187 OF 2007 DATED 07-03-2007. AS THE ISSUE IN THESE APPEAL S OF THE PRESENT ASSESSEE BEFORE US IS EXACTLY IDENTI CAL WHAT WAS BEFORE THE HONBLE HIGH COURT IN THE CASE OF UMIYA COOPERATIVE HOUSING SOCIETY LTD.(SUPRA) RESPECTFULLY FOLLOWING THE SAME WE ARE OF THE CONSIDERED OPINION THAT THE REFERENCE U/S.142A OF T HE ACT CAN BE MADE ONLY WHEN THE PROCEEDINGS UNDER THI S ACT IS PENDING AND NOT OTHERWISE. ACCORDINGLY THIS LEGAL ISSUE WE DECIDE IN FAVOUR OF THE ASSESSEE AN D AGAINST THE REVENUE. 12. WE FURTHER FIND FROM THE CASE RECORDS THAT EVEN IF A REFERENCE U/S. 142A IS MADE BY THE ASSESSING OFFICER ON CERTA IN CONSIDERATION SUCH AS ANYTHING FIND DURING THE COUR SE OF SURVEY U/S 133A OF THE ACT OR ON THE BASIS OF A TAX EVASIO N PETITION OR A REFERENCE IS REQUIRED TO BE MADE DURING THE COURSE OF OTHER PROCEEDINGS OR A REPORT OF THE DVO IS AVAILABLE TO THE AO BEFORE MAKING AN ASSESSMENT OR REASSESSMENT THEN SAME CAN BE UTILIZED ONLY IN ACCORDANCE WITH SUB-SEC.(3) OF SEC. 142A I. E. THE ASSESSEE HAS TO BE GIVEN AN OPPORTUNITY OF BEING HEARD BEFOR E SUCH A REPORT IS UTILIZED AND IN ACCORDANCE WITH SEC.145 WHERE BO OKS OF ACCOUNT ARE REQUIRED TO BE REJECTED BY POINTING OUT SOME AP PARENT DEFECTS. IN OUR CONSIDERED VIEW THE PROVISIONS OF SEC. 142A CANNOT BE READ IN ISOLATION TO SEC.145. IN OTHER WORDS IF BOOKS O F ACCOUNT ARE I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 11 FOUND TO BE CORRECT AND COMPLETE IN ALL RESPECT AND NO DEFECT IS POINTED OUT THEREIN AND COST OF CONSTRUCTION OF BUI LDING IS RECORDED THEREIN THEN THE ADDITION ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION COULD NOT BE MADE EVEN IF A REPORT IS OBTAINED WITHIN HE MEANING OF SEC.142A FROM THE DVO. IT IS BECAUSE THE USE OF THE REPORT OF THE DVO OBTAINED U/S.142A IS NOT MANDATOR Y BUT IS DISCRETIONARY AS THE WORD USED IS MAY THEREIN. AC CORDINGLY WE ARE OF THE CONSIDERED VIEW THAT IN THE PRESENT CASE WHEN AO HAS NOT REJECTED THE BOOKS OF ACCOUNT BY POINTING OUT A NY DEFECTS REFERENCE TO THE DVO WILL NOT BE VALID AND THEREFO RE DVOS REPORT COULD NOT BE UTILIZED FOR FRAMING ASSESSMENT EVEN I F SUCH A REPORT IS CONSIDERED TO BE OBTAINED U/S.142A. SINCE REFERE NCE TO DVO BEING HELD AS INVALID THE ASSESSMENT/ REASSESSMENT FRAMED THEREAFTER WOULD ALSO BE INVALID. EVEN OTHERWISE T HE ISSUE OF UNEXPLAINED EXPENDITURE U/S.69C OF THE ACT IS NOT C OVERED UNDER THE POWERS OF SEC.142A OF THE ACT AND THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF AAR PEE APARTMENTS (P) LTD. (SUPRA). THE HONBLE DELHI HIGH COURT HELD AS UNDER:- 6. BEFORE WE ADVERT TO THE INTERPRETATION TO THE AFORESAID PROVISION WE DEEM IT PROPER TO REPRODUCE THE FOLLOWING DISCUSSIONS DETAINED IN THE ORDER OF TRIB UNAL ON THIS ASPECT:- THE NEXT POINT TO BE DETERMINED IS WHETHER THE AO IS JUSTIFIED IN REFERRING TO THE DVO FOR COMPUTING COS T OF CONSTRUCTION CLAIMED AS REVENUE EXPENDITURE. PRIOR TO INSERTION OF SEC. 142A BY FINANCE (NO.2) ACT 2004 WITH RETROSPECTIVE EFFECT FROM 15TH NOV. 1972 THE REFER ENCE TO DVO IN ASSESSMENT PROCEEDINGS OTHER THAN AS PERMISSIBLE UNDER S. 55A WAS HELD TO BE INVALID AS HELD BY HONBLE SUPREME COURT IN THE CASE OFF SMT. AMIYA BALA PAUL VS. CIT (2003) 182 CTR (SC) 489 : (2003) 262 ITR 407 (SC). SEC. 142A WAS INSERTED WITH RETROSPECTIVE EFFECT FROM 15TH NOV. 1972 HOWEVER EVEN UNDER S. 142A A REFERENCE CAN BE MADE FOR ASSESSMENT OR REASSESSMENT WHERE AN ESTIMATE OF VALUE OF ANY INVESTMENT REFERRED TO IN S. 69 OR S. 69B OR I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 12 THE VALUE OF ANY BULLION JEWELLERY OR OTHER VALUAB LE ARTICLES REFERRED IN S. 69A OR 69B IS REQUIRED TO B E MADE. THE AO MAY REQUIRE THE VALUATION OFFICER TO MAKE AN ESTIMATE OF SUCH VALUE AND REPORT UNDER S. 142A(1) FOR THE PURPOSE OF MAKING AS ASSESSMENT UNDER ACT WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTMENT REFERRED TO IN S. 69A OR S. 69B OR THE V ALUE OF ANY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE REFERRED TO IN S. 69A OR S.69B IS REQUIRED TO BE MA DE THE ASSESSING OFFICER MAY REQUIRE THE VALUATION OFF ICER TO MAKE AN ESTIMATE OF SUCH VALUE AND REPORT THE SA ME TO HIM. THUS THE POWER AVAILABLE UNDER S. 142(1) IS REQUIRING THE VALUATION OFFICER TO VALUE ANY INVEST MENT OR BULLION JEWELLERY OR OTHER VALUABLE ARTICLE REF ERRED IN S.69 S 69A OR S.69B OF THE ACT . THESE POWERS DO N OT EXTEND TO ESTIMATE THE AMOUNT OF UNEXPLAINED EXPENDITURE REFERRED IN S. 69C OF THE ACT. ADMITTED LY IN THE PRESENT CASE THE EXPENDITURE ON CONSTRUCTION AR E CLAIMED AND ALLOWED AS REVENUE EXPENDITURE AND CANNOT BE CONSIDERED AS AN INVESTMENT OR BULLION JEWELLERY ETC. REFERRED IN S. 69 S. 69A OR S.69B OF THE ACT. WE ACCORDINGLY HOLD THAT THE REFERENCE TO DVO IS NOT IN ACCORDANCE WITH THE PROVISIONS OF S. 142A. H ENCE THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F SMT. AMIYA BALA PAUL (SUPRA) WILL STILL APPLY TO HO LD THAT NO ADDITION CAN BE MADE MERELY RELYING UPON TH E VALUE ARRIVED AT BY DVO. IN VIEW OF THE ABOVE DISCUSSION ADDITION OF RS.19 69 881 IS DIRECTED TO BE DELETED. 7. WE ARE IN AGREEMENT WITH THE AFORESAID INTERPRETATION GIVEN BY THE TRIBUNAL TO SEC. 142(A) OF THE ACT. OUR DISCUSSION ON THIS ASPECT PROCEEDS AS UNDE R: 8. SEC. 142(A) IS TO THE FOLLOWING EFFECT:- 142A. FOR THE PURPOSES OF MAKING AN ASSESSMENT OF REASSESSMENT UNDER THIS ACT WHERE AN ESTIMATE OF T HE VALUE OF ANY INVESTMENT REFERRED TO IN S 69 OR S. 6 9B OR THE VALUE OF ANY BULLION JEWELLERY OR OTHER VALUAB LE ARTICLE REFERRED TO IN S. 69A OR S. 69B IS REQUIRED TO BE MADE THE AO MAY REQUIRE THE VALUATION OFFICER TO MAKE AN ESTIMATE OF SUCH VALUE AND REPORT THE SAME TO B HIM. 9. IT IS CLEAR FROM THE READING OF SUB-S.(1) OF THI S PROVISION THAT IT ENABLES THE AO TO GET THE VALUATI ON DONE FROM THE VALUATION OFFICER IN CERTAIN SPECIFIC TYPES OF CASES. THESE WOULD BE THE CASES WHEREIN AN I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 13 ESTIMATE OF THE VALUE OF ANY INVESTMENT REFERRED TO IN S. 69 OR S. 69B OR THE VALUE OF ANY BULLION JEWELLERY OR OTHER VALUABLE ARTICLES REFERRED TO IN S. 69A OR 69 B IS REQUIRED. THERE IS NO MENTION ABOUT S. 69C OF THE A CT. AS IS CLEAR FROM THE ABOVE S 69A DEALS WITH UNEXPLAINED MONEY. SEC. 69B LIKEWISE RELATES TO THE AMOUNT OF INVESTMENT ETC. NOT FULLY DISCLOSED IN BO OKS OF ACCOUNTS. ON THE OTHER HAND THE PROVISION RELATES TO UNEXPLAINED EXPENDITURE IS IN S. 69C. 10. IN THE PRESENT CASE THE AO HAD DOUBTS ABOUT THE EXPENDITURE INCURRED ON THE PROJECT. AS POINTED OUT ABOVE THE ASSESSEE HAD SHOWN THE EXPENDITURE ON THE AT RS. 38 58 53 602. SINCE AO HAD DOUBTED THIS EXPENDITURE HE REFERRED THE MATTER TO DVO FOR THE PURPOSE OF DETERMINING THE COST OF CONSTRUCTION OF SAID PROJECT. HOWEVER AS POINTED OUT ABOVE FOR THE PUR POSE OF GETTING HIMSELF SATISFIED ABOUT THE PURPORTED UNEXPLAINED EXPENDITURE UNDER S. 69C POWERS UNDER S . 1142A COULD NOT BE INVOKED. 11. LEARNED COUNSEL FOR REVENUE SUBMITTED THAT SUCH A POWER COULD BE TRACED TO S. 69B OF THE ACT WHICH RE LATES TO AMOUNT OF INVESTMENT ETC. NOT FULL DISCLOSED IN THE BOOKS OF ACCOUNTS. 12. HER SUBMISSION WAS THAT THE EXPENDITURE INCURR ED SHOULD BE CONSIDERED AS COMING WITHIN THE EXPRESSIO N INVESTMENT.13. WE CANNOT AGREE WITH THIS SUBMISSI ON OF LEARNED COUNSEL FOR REVENUE. IF INVESTMENTS COUL D INCLUDE WITHIN ITS FOLD HE EXPENDITURE AS WELL WHIC H IS INCURRED BY A BUSINESSMAN DURING THE COURSE OF HIS BUSINESS THERE WAS NO NECESSITY OF HAVING A SEPARA TE PROVISION UNDER S. 69C OF THE ACT WHICH DEALS WITH UNEXPLAINED EXPENDITURE AND READS AS UNDER: 69C. WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATI ON ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREO F OR THE EXPLANATION IF ANY OFFERED BY HIM IS NOT IN THE OPINION OF HE AO SATISFACTORY THE AMOUNT COVERED B Y SUCH EXPENDITURE OR PART THEREOF AS THE CASE MAY B E MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. 14. THE SCOPE AND AMBIT OF SS. 69B AND 69C ARE ALTOGETHER DIFFERENT. THE CONNOTATION TO THE INVEST MENT APPEARING IN S. 69B HAS TO BE IN THE CONTEXT OF INVESTMENTS MADE IN SOME PROPERTY OR ANY OTHER TYPE OF I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 14 INVESTMENT AND IT COULD NOT BE THE BUSINESS EXPENDITURE. THE WORD INVESTMENT CONTAINED IN S. 69B DEALS WITH INVESTMENT IN BULLION JEWELLERY OR OTHE R VALUABLE ARTICLES ETC. IF THE CONTENTION OF LEARNE D COUNSEL FOR REVENUE IS ACCEPTED AND THE IS GIVEN W IDER MEANING AS SOUGHT TO BE MADE OUT THE PROVISIONS OF S. 69C SHALL BE RENDERED OTIOSE. 15. THE LEARNED COUNSEL FOR REVENUE HOWEVER TOOK ANOTHER PLEA TO BUTTRESS HER SUBMISSION. HE SUBMITT ED THAT HAVING REGARD TO THE CIRCUMSTANCES UNDER WHICH S. 142A WAS INSERTED BY THE FINANCE ACT 2004 IT BE DEEMED THAT THE INTENTION OF LEGISLATURE WAS TO INC LUDE EVEN THOSE UN-EXPLAINED EXPENDITURE STIPULATED IN S . 69C. NO DOUBT THE NEED BEHIND INSERTING S. 142A WAS TO EMPOWER THE AO TO MAKE A REFERENCE TO THE VALUAT ION OFFICER AS THERE WAS NO SUCH SPECIFIC POWERS AND EXISTING PROVISION CONTAINED IN S. 131 WERE INADEQU ATE. HOWEVER EVEN THIS STATEMENT OF OBJECT AND REASON CLEARLY CONFINED AND LIMITED THE REFERENCE TO HOLD A SCIENTIFIC TECHNICAL AND EXPERT INVESTIGATION ETC. LEARNED COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO CBDT CIRCULAR ISSUED BY IT EXPLAINING THE FINANCE BILL 2004 WHICH SPECIFICALLY OMITS THE WOR D EXPENDITURE AS WELL AS S. 69C. IT IS ON THIS BASI S THAT THE S. 142A WAS INSERTED IN THE FORM AS IT APPEARS ON THE STATUTE BOOK NOW. IF THE INTENTION WAS TO INCLU DE UNEXPLAINED EXPENDITURE AS CONTEMPLATED IN S. 69C O F THE ACT AS WELL THIS PROVISION SHOULD HAVE BEEN SPECIFICALLY MENTIONED IN S. 142A OF THE ACT. 16. FROM THE READING OF SUB-S.(1) OF S. 142A IT IS CLEAR THAT THE LEGISLATURE REFERRED TO THE PROVISIONS OF SS. 69 69A AND 69B BUT SPECIFICALLY EXCLUDED 69C. THE PRINCIPLE OF CASUS OMISSUS BECOMES APPLICABLE IN A SITUATION LIKE THIS. WHAT IS NOT INCLUDED BY THE LEGISLATURE AND RATHER SPECIFICALLY EXCLUDED CANNO T BE INCORPORATED BY THE COURT THROUGH THE PROCESS OF INTERPRETATION. THE ONLY REMEDY IS TO AMEND THE PROVISIONS. IT IS NOT THE FUNCTION OF THE COURT TO LEGISLATE OR TO PLUG THE LOOPHOLES IN THE LAW. 17. IN THE PRESENT CASE EXCEPT THE REPORT OF DVO ON WHICH THE AO RELIED UPON THERE WAS NOTHING ON RECO RD TO SUGGEST THAT THERE WAS ANY OF THE EVIDENCE TO DISBELIEVE THE EXPENDITURE SHOWN BY THE ASSESSEE. I N FACT DURING THE COURSE OF ARGUMENTS LEARNED COUNSE L FOR THE ASSESSEE PRODUCED THE ASSESSMENT ORDER WHICH CLEARLY DEMONSTRATES THAT THE EXPENDITURE SHOWN BY THE I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 15 ASSESSEE FROM THE TIME WHEN IT WAS AN ON-GOING PROJECT WAS EXAMINED AND ACCEPTED BY THE AO 13. IN VIEW OF THE ABOVE FACTS AND THE JUDGMENT OF HON BLE DELHI HIGH COURT IN THE CASE OF AAR PEE APARTMENTS PVT. L TD. (SUPRA) WE ARE OF THE CONSIDERED VIEW THAT THE LEGISLATURE HAS NOT INCLUDED UNEXPLAINED EXPENDITURE STIPULATED IN SEC.69C OF TH E ACT FOR INVOCATION OF PROVISIONS OF SEC.142A OF THE ACT. WE FURTHER FIND THAT EVEN THE CBDT CIRCULAR ISSUED BY IT EXPLAININ G THE FINANCE BILL 2004 SPECIFICALLY OMITTED THE WORD EXPENDIT URE AS WELL AS SEC.69 FROM THE AMBIT OF SEC.142A OF THE ACT AS INS ERTED IN THE FORM AS IT APPEARS ON THE STATUE BOOK. IF THE INTEN TION OF THE LEGISLATURE TO INCLUDE UNEXPLAINED EXPENDITURE AS C ONTEMPLATED IN SEC.69C OF THE PROVISION OF SEC.142A SHOULD HAVE BE EN SPECIFICALLY MENTIONING THE SAME. FURTHER THE COST OF FLAT BEIN G SHOWN BY THE ASSESSEE AS CURRENT ASSETS NOT AS AN INVESTMENT IT CANNOT BE SUBJECT MATTER OF REFERENCE U/S. 142A. EVEN OTHER WISE THE ASSESSING OFFICER REFERRING THE MATTER TO THE DVO F OR VALUATION OF CURRENT ASSETS IN ONE ASSESSMENT YEAR HE CANNOT DI STURB THE CONCLUDED ASSESSMENTS OF OTHER ASSESSMENT YEARS. ACCORDINGLY WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 14. IN VIEW OF THE ABOVE DECISION ON BOTH THE LEGAL IS SUES WE DECIDE THIS APPEAL OF THE ASSESSEE IN FAVOUR OF THE ASSESSEE AND THE ISSUES ON MERITS HAVE BECOME ACADEMIC AND NEEDS NO ADJUDICATION. 15. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH 2012. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD DATED THE 30 TH MARCH 2012 I.T.A. NO. 1542/HYD/2010 M/S. LEGEND ESTATES PVT. LTD. ======================= 16 COPY FORWARDED TO: 1. M/S. LEGEND ESTATES PVT. LTD. C/O. M/S. K. RAGHUNA TH & CO. CHARTERED ACCOUNTANTS 3-6-102/A/B & C 1 ST FLOOR NEAR OLD VIJAYA DIAGNOSTIC CENTRE HIMAYATNAGAR ST . NO. 25 HYDERABAD-500 029. 2. THE DEPUTY COMMISSIONER OF INCOME - TAX CIRCLE - 16(1) AAYAKAR BHAVAN HYDERABAD. 3. THE CIT(A) - V HYDERABAD. 4. THE CIT - IV HYDERABAD. 5 . THE DR A BENCH ITAT HYDERABAD TPRAO