- (1.) We have heard Sri D.D. Chopra for the appellant and Sri S.K. Garg, Senior Advocate, appearing on behalf of the respondent. In the relevant assessment year, the assessee was engaged in real estate development and construction activities. In the course of assessment proceedings for the assessment year 1998-99, the assessing officer made a reference under Section 131(1)(d) of the Act to the District Valuation Officer on 7.2.2001 to estimate the cost of construction of properties constructed by the assessee named as Golf Link Apartments, Park Road, Lucknow and Coronation Farms at Kursi Road, Lucknow. The District Valuation Officer has submitted his report on 26.02.2002, estimating the cost of construction at Rs.7,67,47,000/- as against the cost of Rs.5,77,02,689 disclosed by the assessee. The difference of the cost amounting to Rs.30,55,436/- was added by the assessing officer but the addition was deleted by the Commissioner, Income Tax (Appeal), on appeal being preferred by the assessee.
(2.) The Commissioner, Income Tax (Appeal) came to the conclusion that the assessing officer was having no jurisdiction to refer the matter to the Valuation Officer for valuing the property. The appellant went in appeal before the Income Tax Appellate Tribunal and the Income Tax Appellate Tribunal again dismissed the appeal after holding that the issue in question was squarely covered in favour of the assessee by the decision of the Apex Court in the case of Smt. Amiya Bala Paul Versus C.I.T. (262 ITR 407), wherein it has been held that in an assessment of the assessee to income tax, the assessing officer cannot refer to the Valuation Officer the question of the cost of construction of house property built by the assessee. It was also held that Section 55(A) of the Income Tax Act, 1961 have no application to such a matter and that the power of the assessing officer under Section 131(1) and 133(b) is distinct from and does not include the power to refer a matter to the Valuation Officer under Section 55A.
(3.) The view taken by the Income Tax Appellate Tribunal is not in accordance with law as it ignores the provisions of Section 142(A) introduced by the Finance (No.2) Act, 2004, with retrospective effect from 15.11.1972. Section 142 (A) of the Income Tax Act reads as under :- "142A (1) For the purposes of making an assessment or reassessment under this Act, where an estimate of the value of any investment referred to in section 69 or section 69B or the value of any bullion, jewellery or other valuable article referred to in section 69A or Section 69B is 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 (2) The Valuation Officer to whom a reference is made under sub-section (1) shall, for the purposes of dealing with such reference, have all the powers that he has under Section 38A of the Wealth-tax Act, 1957 (27 of 1957). (3) On receipt of the report from the Valuation Officer, the Assessing Officer may, after giving the assessee an opportunity of being heard, take into account such report in making such assessment or reassessment: Provided that nothing contained in this section shall apply in respect of an assessment made on or before the 30th day of September, 2004, and where such assessment has become final and conclusive on or before that date, except in cases where a reassessment is required to be made in accordance with the provisions of section 153A.";