COMMISSIONER OF INCOME TAX Vs. BASANA RANI SAHA

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Gauhati Bench, in compliance with the direction of this court in Civil Rule No. 25(M) of 1991, has referred the following' questions of law for decision of this court :

(2.) THE respondent, Smt. Basana Rani Saha, is the assessee. The matter pertains to the assessment years 1972 -73 and 1973 -74. The facts in brief are that the assessee during the accounting year 1971 -72 had constructed a building at Station Road, Karimganj Town, with plinth area of 5,875 sq, ft. The building in question is being used as a hotel, viz., Gouri Hotel. The disclosed cost of construction of the building was Rs. 1,28,290. The Income -tax Officer having found the cost of construction not satisfactory, referred the matter to the Departmental Valuation Officer for valuation. The Departmental Valuation Officer assessed the value thereof at Rs. 1,92,350. Thus a difference of Rs. 54,160 (Rs. 1,92,550 -Rs. 1,28,290) was segregated into two parts of Rs. 27,000 each and added to the income for the assessment years 1972 -73 and 1973 -74 under the provisions of Section 69 of the Income -tax Act, 1961.

(3.) THE Tribunal have, primarily, relying upon the decisions in Daulatram v. ITO : [1990]181ITR119(AP) of the Andhra Pradesh High Court and in CIT v. Roshan Lal Seth , held that the Departmental Valuation Officer cannot be asked to assess the cost of construction for the purpose of assessment proceeding. This view is founded on the conclusion that Section 55A of the Income -tax Act can be invoked for ascertaining the fair market value for the purpose of Chapter IV only and not for any other purpose under the Act.