Kiritbhai Jayantilal Kundalia (HUF) Vs ITO (Gujarat High Court)
The assessee filed an appeal under Section 260A of the Income-tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal (ITAT), which had upheld the orders of the Assessing Officer (AO) and the Commissioner of Income-tax (Appeals). The appeal raised questions regarding the legality of the AO’s reference to the Valuation Officer under Section 55A of the Act and the reliance placed on the valuation report for computing capital gains.
The assessee had filed its return for Assessment Year 2000-01 along with a valuation report prepared by a registered valuer. The original assessment under Section 143(3) was completed on 13.03.2003. Subsequently, the assessment was reopened through a notice under Section 148, and a reassessment order was passed on 31.03.2006 determining a higher taxable income.
The Commissioner (Appeals) upheld the reopening of the assessment, observing that the valuation report obtained subsequently revealed discrepancies relating to the cost of acquisition as on 01.04.1981. The Tribunal also confirmed the reopening, noting that the AO had referred the matter to the Valuation Cell and later received a report from the Departmental Valuation Officer (DVO) showing a significant difference between the value declared by the assessee’s registered valuer and the value determined by the DVO.
