M/S.AYYAPPA ROLLER FLOUR MILLS LTD,COCHIN vs. THE DCIT, COCHIN

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ITA 634/COCH/2022Status: DisposedITAT Cochin19 December 2022AY 2011-20122 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a revised valuation report from the DVO at an administrative level does not affect the assessment once the original report was accepted by the Assessing Officer. The Assessing Officer is bound by the DVO's computation.

What were the facts?

The assessee's appeal for AY 2011-12 was against a PCIT order passed under Section 263. The PCIT had directed a fresh assessment, deeming the original assessment order erroneous and prejudicial to revenue.

What were the issues?

Whether a revised DVO report, issued after the AO accepted the original report, can be a basis for revision under Section 263. Whether the AO is bound by the DVO's valuation report.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Satbeer Singh Godara & Shri Manoj Kumar Aggarwal

For Respondent: Shri M. Rajasekhar, CIT-DR
Hearing: 09.11.2022Pronounced: 19.12.2022

This assessee’s appeal for A.Y. 2011-12 is against the PCIT-1, Kochi’s order dated 25.03.2022, involving proceedings under Section 263 of the Income Tax Act, 1961 (in short the Act).

2.

Case called twice. None appearsat assessee’s behest. It is accordingly proceeded ex-parte.

3.

It emerges at the outset that the instant assessee’s appeal hardly requires us to deal with the relevant factual matrix at length. Suffice to say, the learned PCIT’s revision directions herein holds the Assessing Officer’s corresponding assessment order dated 06.05.2020 as an erroneous one causing prejudice to the interest of revenue followed by his further direction to frame a fresh assessment. 2 Ayyappa Roller Flour Mills Ltd.

4.

Learned CIT-DR vehemently argued that although the Assessing Officer’s impugned assessment had been completed in light of this tribunal’s directions in ITA No. 548/Coch.2018 dated 09.05.2019 that the fair market value in issue ought to be computed as per the DVO’s report dated 06.12.2019, the latter’s report in issue stood revised by the departmental authoritiesand, therefore, the impugned assessment has been rightly subjected to section 263 jurisdiction.

5.

All these Revenue arguments fail to evoke our concurrence. We make it clear that once the DVO had submitted its valuation report which stood accepted by the Assessing Officer, its later revision at administrative/ departmental level would hardly have any adverse impact on assessment. Case law CIT vs. Dr. Indira Bhatnagar (2013) 30 taxmann.com 293 (Allahabad) holds that the DVO’s computation indeed binds the Assessing Officer. Faced with this situation we reverse the PCIT’s order in issue and restore the impugned assessment herein dated 06.05.2020 as the necessary corollary.

6.

This assessee’s appeal is allowed in above terms.

Dictated and pronounced in the open Court on 19th December, 2022.

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