Sargam Cinema v. CIT

328 ITR 513Supreme Court of India2010#561 most cited

What is Sargam Cinema v. CIT authority for?

For an Assessing Officer to make a valid reference to the Departmental Valuation Officer for the estimation of the cost of construction, the books of accounts must first be rejected under Section 145(3) of the Income-tax Act.

172

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2012 to 2026.

Also referred to as

Sargam Cinema · CIT v Sargam Cinema · Section 145(3) · Section 142A · DVO reference · cost of construction estimation · rejection of books of accounts · Assessing Officer powers · valuation · assessment procedure · 328 ITR 513

Also reported as

197 Taxmann 203

Sections most often in play

Section 143(3)Section 132Section 153ASection 69BSection 292CSection 115BBESection 132(4)Section 153C

Issues it is cited on

section 142asection 131(1)(d)section 38surrender of incomesection 55asection 150mat creditsection 69baccumulated profitssection 158bdsection 131(1)retracted statement

Judgments citing Sargam Cinema v. CIT

DCIT vs. Parmarth Iron Pvt. Ltd

In the result, the appeal filed by the assessee is allowed for statistical purposes as indicated above and both the appeals filed by the Revenue are dismissed

ITA 3211/DEL/2008[2004-2005]Status: DisposedITAT Delhi21 Feb 2019AY 2004-2005

Bench: Shri R.K. Panda & Ms Suchitra Kamble

For Appellant: Dr. Rakesh Gupta, &For Respondent: Shri Surender Pal, Sr. DR
Section 131Section 142ASection 154Section 68

…o call for a report of the Valuation Officer, the books of accounts must be rejected. 19. The judgment in Bhawani Shankar Vyas (supra) also came up for consideration before the Supreme Court in the case of Sargam Cinema Vs. Commissioner of Income -Tax, [2010] 328 ITR 513 (SC)], wherein the Supreme Court has held that the Assessing Authority cannot refer the matter to the Departmental Valuation Officer without first rejecting the books of account. Once that be the law as declared by the Supreme Court, it is not possible for us to consider the contention advanced on behalf of the revenue. 20. For the aforesaid reas…

DCIT vs. Parmarth Iron Pvt. Ltd

In the result, the appeal filed by the assessee is allowed for statistical purposes as indicated above and both the appeals filed by the Revenue are dismissed

ITA 2370/DEL/2008[2004-2005]Status: DisposedITAT Delhi21 Feb 2019AY 2004-2005

Bench: Shri R.K. Panda & Ms Suchitra Kamble

For Appellant: Dr. Rakesh Gupta, &For Respondent: Shri Surender Pal, Sr. DR
Section 131Section 142ASection 154Section 68

…o call for a report of the Valuation Officer, the books of accounts must be rejected. 19. The judgment in Bhawani Shankar Vyas (supra) also came up for consideration before the Supreme Court in the case of Sargam Cinema Vs. Commissioner of Income -Tax, [2010] 328 ITR 513 (SC)], wherein the Supreme Court has held that the Assessing Authority cannot refer the matter to the Departmental Valuation Officer without first rejecting the books of account. Once that be the law as declared by the Supreme Court, it is not possible for us to consider the contention advanced on behalf of the revenue. 20. For the aforesaid reas…

Parmarth Iron (P) Ltd vs. ACIT

In the result, the appeal filed by the assessee is allowed for statistical purposes as indicated above and both the appeals filed by the Revenue are dismissed

ITA 1992/DEL/2008[2004-2005]Status: DisposedITAT Delhi21 Feb 2019AY 2004-2005

Bench: Shri R.K. Panda & Ms Suchitra Kamble

For Appellant: Dr. Rakesh Gupta, &For Respondent: Shri Surender Pal, Sr. DR
Section 131Section 142ASection 154Section 68

…o call for a report of the Valuation Officer, the books of accounts must be rejected. 19. The judgment in Bhawani Shankar Vyas (supra) also came up for consideration before the Supreme Court in the case of Sargam Cinema Vs. Commissioner of Income -Tax, [2010] 328 ITR 513 (SC)], wherein the Supreme Court has held that the Assessing Authority cannot refer the matter to the Departmental Valuation Officer without first rejecting the books of account. Once that be the law as declared by the Supreme Court, it is not possible for us to consider the contention advanced on behalf of the revenue. 20. For the aforesaid reas…

Common Wealth Developers Pvt. Ltd., Mumbai vs. Deputy Commissioner of Income-Tax

In the result, appeal of assessee is allowed

ITA 977/PUN/2015[2010-11]Status: DisposedITAT Pune10 Sept 2018AY 2010-11

Bench: Ms. Sushma Chowla, Jm & Shri D. Karunakara Rao, Am आयकर अपीऱ सं. / Ita No.977/Pun/2015 यििाारण वषा / Assessment Year :2010-11

For Appellant: Shri Suhas P BoraFor Respondent: Shri Achal Sharma
Section 131(1)(d)Section 132Section 143(3)Section 44A

…ount which were audited, then no addition could be made only on the basis of valuation report of the Government Approved Valuer. In this regard, he placed reliance on the ratio laid down by the Hon'ble Supreme Court in the case of Sargam Cinema Vs. CIT (2010) 328 ITR 513 (SC) and the Pune Bench of Tribunal in the case of Dr. Shivaji Ramchandra Kolekar Vs. ITO (2014) 8 TaxCorp (A.T.) 35190 (Pune). The learned Authorized Representative for the assessee further pointed out that the books of account were not rejected by the Assessing Officer and in the absence of the same, no addition was warranted in the hands of as…

ACIT, Madurai vs. S.Jayaraman, Madurai

In the result, the appeal filed by the Revenue in ITA

ITA 1073/CHNY/2017[2011-12]Status: DisposedITAT Chennai01 Mar 2018AY 2011-12

Bench: Shri Abraham P.George & Shri George Mathanआयकर अपील सं./Ita No.1073/Chny/2017 $नधा!रण वष! /Assessment Year: 2011-12

For Appellant: Mr.T.Vasudevan, Adv

…sion that the cost of construction was clearly recorded in the books of the assessee and books of accounts of the assessee had not been rejected and consequently, in view of the decision of the Hon’ble Supreme Court in the case of Sargam Cinemas reported in 328 ITR 513 (SC), no addition can be made. It was a further submission that Madurai was not covered by the CPWD rates in so far as it was not a Metro City. It was a submission that in the Cross Objection, the assessee has challenged the additions sustained by the Ld.CIT(A). It was a prayer that the additions on account of the unexplained investment was liab…

Sh. Sanjeev Parashar, Aligarh vs. I.T.O., Ward-1, Aligarh

In the result, the appeal is allowed

ITA 230/AGR/2016[2011-12]Status: DisposedITAT Agra07 Dec 2017AY 2011-12

Bench: Shri A. D. Jain & Dr. Mitha Lal Meenashri Sanjeev Parashar Vs..Ito, Ward -1, A-6, Mahavir Park, Extension, Aligarh. Aligarh. Panno.Ajopp3902F (Assessee) (Revenue)

Section 142ASection 69Section 69ASection 69B

…elf and the reference was made solely to examine the veracity of the assessee’s claim of investment in construction. That being so, the matter stands squarely covered in favour of the assessee by ‘Goodluck Automobile’ (supra), wherein ‘Sargam Cinema vs. CIT’, 328 ITR 513 (SC) has been followed. 14. Therefore, it is held that the reference made by the AO u/s 142A of the Act without rejection of the assessee’s books of account is invalid. The Additional Grounds are are, accordingly, accepted. This issue was raised by the assessee before the ld. CIT(A) by way of written submissions, as reproduced in the impugned or…

M/S.Pathi Investments (Pvt) Ltd., Bangalore vs. Income Tax Officer, Bangalore

In the result, the appeal of assessee is dismissed

ITA 2126/BANG/2016[2013-14]Status: DisposedITAT Bangalore04 Aug 2017AY 2013-14

Bench: Shri Sunil Kumar Yadav & Shri Inturi Rama Raoassessment Year : 2013-14

For Appellant: Dr. Vishnu Bharath, CAFor Respondent: Smt. Padma Meenakshi, Jt.CIT(DR)(ITAT)
Section 145Section 154Section 234

…ced on the following case laws: 1. Sakthi Tourist Home vs. CIT [2009] 308 ITR 228 (Ker) 2. Smt. Amiya Bala Paul vs. CIT [2003] 262 ITR 407 (SC) 3. CIT vs. Star Builders [2007] 294 ITR 338 (Guj.) Now the Department is in appeal. 4. Sargam Cinema vs. CIT [2010] 328 ITR 513 (SC) 7. Appellant maintained books of account which were produced before the Assessing Officer who test checked those books, however, could not point out any discrepancy in those books of account. The books of accounts therefore not rejected u/s 145, Officer simply relied on the Agreements, while making the impugned addition is not justified. 8.…

C.R.Selvaraju, Salem vs. ITO, Namakkal

In the result, the appeal of the assessee in ITA

ITA 1012/CHNY/2017[2010-11]Status: DisposedITAT Chennai12 Jul 2017AY 2010-11

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddyआयकर अपील सं./Ita No. 1012/Mds/2017 "नधा"रण वष" /Assessment Year : 2010-11 Shri C.R. Selvaraju The Income-Tax Officer, Nsr Mall, D.No.195, Salem V. Ward-(1), Road, Namakkal Post, Namakkal. Namakkal Dt. 637 001. Pan Bsjps 7393 N (""यथ"/Respondent) (अपीलाथ"/Appellant)

For Appellant: Shri T.S.Lakshmivenkataraman, FCAFor Respondent: Mrs. R. Ilavarasi, JCIT,D.R

…ed by following precedents:- (i) DCIT vs. Satish Cold Storage 36 ITR (Tribunal) 435 (Lucknow) wherein held that Assessing Officer could not refer the matter to DVO without books of account being rejected. 16 - - ITA 1012/Mds/17 (ii) Sargam Cinema vs. CIT (328 ITR 513)(SC) wherein held that reference to DVO was made without rejecting the books of account, the reference to the D.V.O. itself is bad in law. Accordingly, we are inclined to allow the appeal of the assessee. 14. In the result, the appeal of the assessee in ITA No.100/Mds/2015 is allowed. 8. We find that the AO also in this assessment year relied…

Hotel Surya Vilas Palace, Bharatpur vs. ACIT-Circle, Bharatpur

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 738/JPR/2015[2011-12]Status: DisposedITAT Jaipur14 Jun 2017AY 2011-12
For Appellant: Shri Rajendra Agrawal (C.A.)For Respondent: Smt.Roshanta Meena (Addl.CIT)
Section 142Section 142ASection 142A(1)Section 145(3)Section 56(2)Section 69Section 69B

…Act, 1961. 2.2 In support, reliance was placed on the judgment of Jodhpur bench of ITAT in the case of Prithavi Raj Bohra v. ITO (2012) 150 TTJ 0057 wherein after considering the judgment of the Hon’ble Supreme Court in the case of Sargam Cinema v. CIT (2010) 328 ITR 513 (SC) “that the tribunal decided the matter rightly in favour of the assessee in as much as the tribunal came to the conclusion that the assessing authority could not have referred the matter to the DVO without the books of account being rejected”. M/s Hotel Surya Vilas Palace Vs. ACIT, Alwar. 2.3 It was submitted that the ld. CIT(A) leaving asid…

DCIT, New Delhi vs. Sh.Smt. Deepti Talla, New Delhi

In the result, the appeal of the Revenue is allowed for statistical purposes

ITA 1563/DEL/2014[2009-10]Status: DisposedITAT Delhi11 May 2017AY 2009-10

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

Section 142ASection 143(2)Section 148

…In the Income-Tax Appellate Tribunal, Delhi Bench ‘B’, New Delhi Before : Shri I.C. Sudhir, Judicial Member And Shri L.P. Sahu, Accountant Member ITA No. 1563/Del./2014 Assessment Year: 2009-10 D.C.I.T., Circle 25(1), vs. Smt. Deepti Talla, New Delhi. B-5, Near Durga Mandir, Moti Nagar, New Delhi. PAN – AABPW 2357 F (Appellant) (Respondent) Appellant by Sh. Anil Kumar Sharma, Sr. DR Respondent by Sh. Nagesh Kumar, CA Date of Hearing 02.05.2017 Date of Pronouncement 11.05.2017 ORDER Per L.P. Sahu, A.M.: This is an appeal filed by the Revenue against the order of learned CIT(A)-XXIV, New Delhi dated 11.12.2013…

ITO, Rishikesh vs. M/S. M.L. Creations, Dehradun

In the result, the Appeal filed by the Revenue stands dismissed

ITA 4009/DEL/2016[2009-10]Status: DisposedITAT Delhi26 Dec 2016AY 2009-10

Bench: Shri H.S. Sidhu

For Appellant: Sh. R.K. Gupta, CA & Sh. P.SFor Respondent: Sh. F.R. MEENA, SR. DR
Section 143(1)Section 143(3)Section 69A

…ni Shankar Vyas (2009) . 311 ITR 8 (Uttarakhand) in support of the proposition that the reference could be made without rejecting the books of accounts. However, it is observed that the Hon'ble Supreme Court in the case of Sargam Cinema Ltd. Vs. CIT (2010) 328 ITR 513 (SC) considered the judgment of the Hon'ble Uttarakhand High Court in the case of Bhawani Shankar Vyas (supra). and held that the assessing authority cannot refer the matter to the departmental valuation officer without first rejecting the books of accounts. The Hon'ble Allahabad High Court in the case of CIT Vs. Lucknow Public Educational So…

M/S. D.S. Doors (P) Ltd., New Delhi vs. ACIT, Faridabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 38/DEL/2014[2007-08]Status: DisposedITAT Delhi16 Dec 2016AY 2007-08

Bench: Smt Diva Singh & Sh.Anadi Nath Mishra

Section 143(3)Section 153Section 153ASection 271(1)(c)Section 69B

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’ NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.ANADI NATH MISHRA, ACCOUNTANT MEMBER I.T.A .No.-38/Del/2014 (ASSESSMENT YEAR-2007-08) D.S.Doors P.ltd., Vs ACIT, C/o-M/s.RRA Taxindia, Central Circle-1, D-28, South Extension, Part-I, Faridabad. New Delhi-110049. PAN-AAACD5805B (APPELLANT) (RESPONDENT) Assessee by Sh.Saubhagya Aggarwal, Adv. Revenue by Sh.Anil Kr.Sharma, Sr.DR Date of Hearing 03.10.2016 Date of Pronouncement 16.12.2016 ORDER PER DIVA SINGH, J.M. : The present appeal has been filed by the assessee assailing the correctness of the or…

R.Jayakumar, Chennai vs. ACIT, Trichy

In the result, the appeals of the assessee for both years are 15

ITA 1130/CHNY/2013[2009-10]Status: DisposedITAT Chennai25 Nov 2016AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri Abraham P. George]

For Respondent: Shri. R. Durai Pandian, IRS, JCIT
Section 132(4)Section 153A

…very meagre and insignificant. According to him, fixing the value of the building was done on estimates and therefore small variations could always be there. Reliance was placed on the judgment of Hon’ble Supreme Court in the case of Sargam Cinema vs. CIT, 328 ITR 513. Per contra, ld. Departmental Representative strongly 13. supported the orders of the authorities below. We have considered the rival contentions and perused the 14. orders of the authorities below. Assessee himself had admitted the cost of construction as "52,25,450/- and this was recorded in the notebook found during the search. When a referen…

R.Jayakumar, Chennai vs. ACIT, Trichy

In the result, the appeals of the assessee for both years are 15

ITA 1129/CHNY/2013[2005-06]Status: DisposedITAT Chennai25 Nov 2016AY 2005-06

Bench: Shri N.R.S. Ganesan & Shri Abraham P. George]

For Respondent: Shri. R. Durai Pandian, IRS, JCIT
Section 132(4)Section 153A

…very meagre and insignificant. According to him, fixing the value of the building was done on estimates and therefore small variations could always be there. Reliance was placed on the judgment of Hon’ble Supreme Court in the case of Sargam Cinema vs. CIT, 328 ITR 513. Per contra, ld. Departmental Representative strongly 13. supported the orders of the authorities below. We have considered the rival contentions and perused the 14. orders of the authorities below. Assessee himself had admitted the cost of construction as "52,25,450/- and this was recorded in the notebook found during the search. When a referen…

Kalpana Medical Centre Private Limited, Coimbatore vs. ACIT, Coimbatore

In the result, all the appeals of the assessee are allowed

ITA 347/CHNY/2015[2009-10]Status: DisposedITAT Chennai09 Nov 2016AY 2009-10

Bench: Shri Chandra Poojari & Shri. G. Pavan Kumarअपील अपील अपील संसंसंसं./I.T.A. No.2847, 2848/Mds/2014 & 347/Mds/2015 अपील िनधा"रण िनधा"रण वष" िनधा"रण िनधा"रण वष" वष" /Assessment Year : 2007-2008,2008-2009 & 2009-10 वष"

For Appellant: Shri T. Banusekar, CAFor Respondent: Shri Clement Ramesh Kumar
Section 132Section 133ASection 147Section 148

…addition was based on the DVO report as the reference to the DVO is bad in law as the AO referred the matter to the DVO without rejecting the books of accounts. For this purpose, he relied on judgement of the Supreme Court in the case of Sargam Cinema Vs CIT (328 ITR 513) where in held as follows: "According to the Departmental Representative, the Assessing Officer applied his mind on the DVO report and he has segregated the total cost of factory building for three years, which is conscious decision of the AO and it is not solely based on the DVO report and it cannot be said that DVO report is the basis for reop…

Kalpana Medical Centre Private Limited, Coimbatore vs. ACIT, Coimbatore

In the result, all the appeals of the assessee are allowed

ITA 2848/CHNY/2014[2008-09]Status: DisposedITAT Chennai09 Nov 2016AY 2008-09

Bench: Shri Chandra Poojari & Shri. G. Pavan Kumarअपील अपील अपील संसंसंसं./I.T.A. No.2847, 2848/Mds/2014 & 347/Mds/2015 अपील िनधा"रण िनधा"रण वष" िनधा"रण िनधा"रण वष" वष" /Assessment Year : 2007-2008,2008-2009 & 2009-10 वष"

For Appellant: Shri T. Banusekar, CAFor Respondent: Shri Clement Ramesh Kumar
Section 132Section 133ASection 147Section 148

…addition was based on the DVO report as the reference to the DVO is bad in law as the AO referred the matter to the DVO without rejecting the books of accounts. For this purpose, he relied on judgement of the Supreme Court in the case of Sargam Cinema Vs CIT (328 ITR 513) where in held as follows: "According to the Departmental Representative, the Assessing Officer applied his mind on the DVO report and he has segregated the total cost of factory building for three years, which is conscious decision of the AO and it is not solely based on the DVO report and it cannot be said that DVO report is the basis for reop…

Kalpana Medical Centre Private Limited, Coimbatore vs. ACIT, Coimbatore

In the result, all the appeals of the assessee are allowed

ITA 2847/CHNY/2014[2007-08]Status: DisposedITAT Chennai09 Nov 2016AY 2007-08

Bench: Shri Chandra Poojari & Shri. G. Pavan Kumarअपील अपील अपील संसंसंसं./I.T.A. No.2847, 2848/Mds/2014 & 347/Mds/2015 अपील िनधा"रण िनधा"रण वष" िनधा"रण िनधा"रण वष" वष" /Assessment Year : 2007-2008,2008-2009 & 2009-10 वष"

For Appellant: Shri T. Banusekar, CAFor Respondent: Shri Clement Ramesh Kumar
Section 132Section 133ASection 147Section 148

…addition was based on the DVO report as the reference to the DVO is bad in law as the AO referred the matter to the DVO without rejecting the books of accounts. For this purpose, he relied on judgement of the Supreme Court in the case of Sargam Cinema Vs CIT (328 ITR 513) where in held as follows: "According to the Departmental Representative, the Assessing Officer applied his mind on the DVO report and he has segregated the total cost of factory building for three years, which is conscious decision of the AO and it is not solely based on the DVO report and it cannot be said that DVO report is the basis for reop…

DCIT, New Delhi vs. M/S West Land Builtech Pvt. Ltd., New Delhi

In the result, the appeal of the assessee is allowed and that of the

ITA 1309/DEL/2011[2006-07]Status: DisposedITAT Delhi14 Oct 2016AY 2006-07

Bench: Shri R.S. Syal & Ms Suchitra Kambleassessment Year : 2006-07

For Appellant: Shri Rakesh Jain, CAFor Respondent: Shri Umesh Chander Dubey, Sr. DR
Section 142ASection 69

…d. CIT(A). The AO, in making this addition did not reject the books of account maintained by the assessee and straightway went ahead in making the addition on the basis of the DVO’s report. The Hon’ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513 (SC) has held that where the books of account are not rejected by the AO, no reference can be validly made to the DVO for making an addition. The reliance of the ld. DR on some contrary judgment of some non-jurisdictional High Court is misplaced. It is obvious that when an issue has been decided by the Hon’ble Supreme Court, no lower Court, muc…

Westland Buildtech Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, the appeal of the assessee is allowed and that of the

ITA 1303/DEL/2011[2006-07]Status: DisposedITAT Delhi14 Oct 2016AY 2006-07

Bench: Shri R.S. Syal & Ms Suchitra Kambleassessment Year : 2006-07

For Appellant: Shri Rakesh Jain, CAFor Respondent: Shri Umesh Chander Dubey, Sr. DR
Section 142ASection 69

…d. CIT(A). The AO, in making this addition did not reject the books of account maintained by the assessee and straightway went ahead in making the addition on the basis of the DVO’s report. The Hon’ble Supreme Court in the case of Sargam Cinema vs. CIT (2010) 328 ITR 513 (SC) has held that where the books of account are not rejected by the AO, no reference can be validly made to the DVO for making an addition. The reliance of the ld. DR on some contrary judgment of some non-jurisdictional High Court is misplaced. It is obvious that when an issue has been decided by the Hon’ble Supreme Court, no lower Court, muc…

Sri. Narayanarao M. More, Bidar vs. ITO, Bidar

The appeal is dismissed

ITA 959/BANG/2014[2004-05]Status: DisposedITAT Bangalore31 Aug 2016AY 2004-05

Bench: Shri Vijay Pal Rao

For Appellant: S/Shri B.S. Balachandran & P. Dinesh, AdvocatesFor Respondent: Shri D.K. Jha, Addl. CIT (D.R)
Section 142ASection 143(3)Section 147Section 148Section 234

…ought to have appreciated that the assessment being reopened on the ground of cost of construction/valuation of residential house, the reopening is bad in the eye of law as settled by the Hori'ble Supreme Court in the case of (1) Sargarn Cinema vs. CIT (2010) 328 ITR 513 (SC) and (2) ACIT vs. Dhariya Construction Co (2010) 328 ITR 515 (SC) and therefore the consequent assessment order is not sustainable in the eye of law. 4. Without prejudice, the CIT (Appeals) ought to have appreciated t h a t the reopening of assessment was made on a mere change of opinion more so on the allegations of investment made by the Ap…