Law:

Section:

Section 69 of the Income-tax Act, 1961 - Unexplained investment - Assessment year 1983-84 - Assessee had constructed a factory building - Assessing Officer referred case for valuation to Departmental Valuation Officer (DVO) - Since there was difference between cost of construction shown by assessee and cost of construction determined by the DVO, Assessing Officer made an addition of that amount to income of assessee as unexplained investment - Whether in view of decision in Smt. Amiya Bala Paul v. CIT [2003] 262 ITR 407/ 130 Taxman 511 (SC), Assessing Officer could not have obtained report of DVO for purpose of determining cost of construction - Held, yes CASE REFERRED TO Smt. Amiya Bala Paul v. CIT [2003] 262 ITR 407/ 130 Taxman 511 (SC) [Para 6]. Dr. N.L. Sharda for the Applicant. JUDGMENT N.K. Sud, J. - At the instance of the revenue, the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short 'the Tribunal') has referred the following questions of law arising out of its order dated 31-1-1994 relating to assessment year 1983-84 for the opinion of this Court :- "1. Whether on the facts and in the circumstances of the case, the ITAT was right in law in deleting the addition of Rs. 2,42,577 made on account of difference in the valuation of property arrived at by the Departmental Valuation Officer and that declared by the assessee in its books of account? 2. Whether on the facts and in the circumstances of the case, the ITAT was right in law in deleting the addition on technical ground that the books of the assessee were not rejected without discussing the merits of the valuation report? 3. Whether on the facts and in the circumstances of the case, the ITAT was right on facts and law in considering the irrelevant facts and ignoring the relevant facts of the case?" 2. Assessee has constructed the factory building during the financial years 1982-83 to 1985-86. The cost of construction as per books of account was as under : Financial year Rs. 1982-83 2,88,614.05 1983-84 712.50 1984-85 4,445.00 1985-86 15,500.00 3,09,271.55 3. The Assessing Officer had referred the case for valuation to the Departmental Valuation Officer, who valued the same at Rs.…

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