Law:

Section:

Section 69, read with section 147, of the Income-tax Act, 1961 - Unexplained investments - Assessment years 1987-88 and 1988-89 - Assessing Officer relying upon report of DVO, initiated proceedings under section 147 against assessee for assessing unexplained investment in construction of cinema building owned by assessee and accordingly made additions - Commissioner (Appeals) in view of his findings in assessment years 1989-90 and 1990-91 that report of registered valuer filed by assessee being comprehensive and scientific was preferable to report of DVO, deleted additions - Tribunal upheld order of Commissioner (Appeals) - Whether in view of settled law that no reference can be made by Assessing Officer to Valuation Officer for estimating cost of construction of house property under A ct, report of DVO was without jurisdiction and, therefore, very foundation for initiation of proceedings under section 147 and for making addition on account of unexplained investment disappeared - Held, yes - Whether since Commissioner (Appeals) as well as Tribunal in their earlier orders in assessment years 1989-90 and 1990-91 had given detailed reasons for rejecting estimate of cost of construction made by Assessing Officer and for accepting report of registered valuer and those findings were pure findings of fact, there was no legal or factual infirmity in their orders warranting interference - Held, yes FACTS During the course of assessment proceedings, relating to assessment years 1987-88 and 1988-89, the Assessing Officer referred the matter of valuation of cinema building owned by the assessee to the DVO. Thereafter, on the basis of the DVO's report, the Assessing Officer initiated proceedings under section 147 for assessing the unexplained investment and also issued notices under section 148 to the assessee. In response to the said notices, the assessee filed returns of income declaring 'nil' income as it had no business during the relevant assessment years. The Assessing Officer, relying on the report of the DVO, determined the unexplained investment in the constructions of the cinema building and accordingly, made additions. On appeal, the Commissioner (Appeals) held…

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