- (1.) THE present appeal has been filed under section 260 -A of the Income Tax Act, 1961, hereinafter referred to as "the Act", against the order dt. 21 -11 -2008 passed by the Income Tax Appellate Tribunal. The Department has proposed the following substantial question of Law said to be arising out of the Tribunals order: 1.WHETHER on the facts and in the circumstances of the case, the Tribunal is justified in law in deleting the addition made by the assessing officer by invoking the provisions of section 69 -B of the Act on the ground that the books of account of the assessee had not been rejected by the assessing officer?
(2.) BRIEFLY stated the facts giving rise to the present appeal are as follows: - - The respondent assessee is a private limited Company and is running a cold storage. For the assessment year 1997 -98 the assessee has filed its return of Income declaring a loss of Rs. 7,49,700. The respondent company had shown cost of construction in its books of account at Rs. 40,60,000. In order to determine the correct cost of construction the matter was referred to the Valuation Cell by issuing commission under section 131(1)(d) of the Act. The valuation officer submitted his report dt. 25 -2 -2000 in which he assessed the cost during assessment year in question at Rs. 87,11,302. The report was sent to the respondent assessee to explain the difference. The objections were filed along with Government approved Valuers valuation report. The assessing officer sought for comments from the Valuation Cell on the objections and after receiving the comments on the objections, taking all aspects of the matter determined the cost of construction at Rs. 75,93,708 and accordingly made additions of the difference under Section 69B of the Act. Feeling aggrieved the respondent company preferred an appeal before the Commissioner (Appeals), Agra, who vide order dt. 31 -3 -2003 allowed the appeal and held that no addition is required. The Revenue has preferred an appeal against the order of the Commissioner (Appeals), Agra before the Tribunal, which appeal was dismissed.
(3.) WE have heard Sri Shambhu Chopra, learned Senior Standing Counsel. We find that the Apex Court in the case of Sargam Cinema v. CIT : (2010) 328 ITR 573 : (2011) 197 Taxman 203 has held that unless the books of account of Assessee are rejected, the assessing officer cannot refer the matter to Departmental valuation officer. In the present case we find that the books of account of the respondent -assessee has not been rejected and only certain expenditure has been disallowed and enhancement has been made in the cost of construction of the building on the basis of the valuation officer report. That being the position, we are of the considered opinion, that addition made on account of the report of the valuation officer was not at all warranted. The order of the Tribunal does not call for interference. The appeal fails and is dismissed.;