COMMISSIONER OF INCOME TAX Vs. PRAKASH CHITRA

JUDGEMENT

(1.) THIS is an application under s. 256(2) of the IT Act, 1961, on the instance of the CIT, Bikaner, seeking direction to the Tribunal, Jaipur, to make reference of the following question for the opinion of this Court :

(2.) THE instant application pertains to the asst. yr. 1993-94. THE respondent-assessee during the assessment proceedings noticed that Departmental Valuer as well as registered valuer of the assessee determined the cost of construction in the cinema building at Rs. 7,91,000 and Rs. 5,52,800 respectively. THE AO declared the cost of the construction during the year amounting to Rs. 4,07,452 with a lump sum addition of Rs. 25,000 only, thereby taking the cost of construction during the year at Rs. 4,32,452 without bringing any material on record for differing by such margin from the expert valuation resulting in under- assessment. In view of this, the CIT, Bikaner, found the order of the AO prejudicial to the interest of the Revenue and as such, a notice under s. 263 was issued to the assessee. After hearing the parties, the CIT(A), Bikaner, arrived at the conclusion that the AO had not properly appreciated the material placed before him by the assessee. He also found that the assessee by its conduct accepted that the books of account were not reliable and correct. In view of this, he allowed the appeal and direct the AO to hold proper inquiry. THE CIT, also arrived at the conclusion that the AO was not making proper inquiries and without sufficient material on record to differ from the valuation report, as such, he cancelled the assessment order passed by the AO and remitted the matter for a fresh assessment by order dt. 23rd Feb., 1998.