HOTEL MOUNT VIEW Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The questions: In this appeal two questions have since been framed for being answered by this Court, viz. :

(2.) Dr. D. Pal, learned senior counsel, appearing on behalf of the appellant, submits that in this case the assessment for the relevant asst. yr. 1993-94 was complete under Section 143 of the IT Act, 1961. There was nothing on record to show that there was any defect in the books of account produced in connection with the said assessment proceedings under Section 143. The assessee had constructed a hotel building during 1991-92, 1992-93 and 1993-94. The cost of construction whereof incurred in the relevant assessment years were reflected in the return submitted for the concerned assessment years respectively. After lapse of four years, Section 147 was resorted to by the AO on the allegation that income for the asst. yr. 1993-94 had escaped assessment. Admittedly, this was done after expiry of four years from the end of the relevant assessment year. Therefore, Section 147 could be resorted to only if there was a finding that the assessee had failed to disclose truly and correctly the income.

(3.) Mr. Shome, learned senior counsel appearing for the Department, on the other hand, points out that the AO had found that except the cash book no other books of account were produced during the course of the proceedings under Section 143 but that was overlooked by the CIT(A), which was corrected by the learned Tribunal. As such the finding of fact were concluded with the observation of the learned Tribunal that the assessee had failed to disclose truly and correctly his income attracting the provisions of Section 147. He also drew our attention to the three versions disclosed by the assessee before three authorities. This itself was sufficient to hold that there was a case of escapement of income on account of non-disclosure of true and correct income by the assessee. He points out that a valuation report is admissible in evidence in view of Section 45 of the Evidence Act, Read with Section. 75 of the Code of Civil Procedure (CPC) and order 26, Rules. 9 and 11, respectively thereof. According to him, there being nothing to point out the defects in the valuation report, it was open to the IT authority to depend on the same and the evidentiary value of such a report cannot be brushed aside simply because there was another valuation report submitted by the assessee earlier and that the valuation report was made correctly on the basis of the acceptable CPWD standard. He also points out that this valuation report was done on the basis of the 1992 valuation and as such cannot be overlooked. He then contends that this finding accepting the valuation report is a finding of fact. In the absence of any perversity this Court cannot interfere with the same. According to him, Section 131(1)(d) empowers the AO to make a reference to obtain the valuation report in terms of order 26, Rules 9, CPC. Therefore, this Court should not interfere with the order appealed against.