Case Law Details
ITO Vs Pritham and Prathik Hospitals Pvt. Limited (ITAT Hyderabad)
ITAT Hyderabad held that prior to 01.10.2014 it was essential for the Assessing Officer to reject the books of accounts of the assessee before referring the matter to the Valuation Officer for determining different entries and the expenditure incurred by the assessee.
Facts- A survey u/s 133A of the Income-tax Act, 1961 was conducted at business premises of the assessee and during the survey proceedings, certain documents/loose sheets found at the business premises were impounded. Assessee company did not file its Return of Income for the A.Y.2014-15. Subsequently, the case was selected for compulsory scrutiny. A notice under section 142(1) of the I.T.Act was served on the assessee calling for return of income. The assessee company filed Return of Income on 31/07/2015 admitting total income as Nil. Thereafter, AO completed the assessment on 31.12.2016 by making an addition of Rs.64,10,599/- u/s 143(3) of the Act on account of difference in Cost of Construction as per valuation Report u/s 69 of the I.T.Act,1961 and also added Rs.1,29,10,000/- as unexplained share capital money appearing in the balance sheet as on 31.03.2014 assessed u/s.68 of the I.T.Act after reducing initial Share Application Money invested during the F.Y.2012-13.
Feeling aggrieved with the order of Assessing Officer, assessee carried the matter before ld.CIT(A), who allowed the appeal in favour of the assessee. Feeling aggrieved with the order of ld.CIT(A), Revenue is now in appeal before us.
Conclusion- Hon’ble Supreme Court in the case of Sargam Cinema vs. Commissioner of Income Tax, reported it was held that without rejecting the books of accounts, it is not open for the Assessing Officer to refer the matter to Valuation Cell, Income Tax Department for determining different entries and the expenditure incurred by the assessee.
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