SMT. AMIYHA BALA PAUL versus COMMISSIONER OF INCOME TAX, SHILLONG

Citation: [2003] SUPP. 1 S.C.R. 388 · Decided: 07-07-2003 · Supreme Court of India · Bench: RUMA PAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
SMT. AMIYHA BALA PAUL 
v. 
COMMISSIONER OF INCOME TAX, SHILLONG 
JULY 7, 2003 
(RUMA PAL AND B.N. SRIKRISHNA, JJ.] 
Income Tax Act, 1961; Sections 55A, 116, 120, 131(/), 133(6) and 
142(2): Assessee filed return disclosing certain investment on construction of 
C a house in two consecutive assessment years-Assessing Officer referring the 
matter of valuation of construction cost to Valuation Officer-Assessment of 
previous years reopened-Additions made therein towards undisclosed 
investment-Challenge to---Dismissed by the Appellate Authority-Tribunal 
allowed the appeal holding that the Assessing Officer could not refer such 
matter to the Valuation Officer-On Reference High Court held that the 
D authority possess ample power under the provisions of the Act to refer such 
a matter to the Valuation Officer-On appeal. held, Power of inquiry granted 
under provisions other than Section 55A of the Act does not include the power 
to refer the matter for inquiry-Consequences of referring the matter to 
Valuation Officer under Section 55A of the Act and issuing of commission 
E under Section 75 rlw O.XXVI R.9 are different-Assessing Officer could not 
invoke the general power of inquiry under the Act to refer such matter to the 
Valuation Officer in the circumstances and purposes different from the 
expressed provisions of law-Reference to a Valuation Officer could be made 
if permissible under the Act-However, since the Valuation Ojficer is appointed 
under the Wealth Tax Act, he could discharge functions within the statutory 
F limits-Code a/Civil Procedure, 1908-0rder 26-Sections 75 to 78-Wealth 
Tax Act, 1957; Ss. 8, /2A, /6(A), 23, 35, 37(/) and 38. 
In the return filed by the assessee for the assessment year 1982-83, 
she had shown certain amount as investment towards the construction cost 
of a house. In the subsequent assessment year, she further disclosed 
G investment of a further amount for the construction of the house. The 
return was not accepted by the Assessing Officer, who referred the 
question of determination/valuation of construction cost of the house to 
the Valuation Officer under Section SSA of the Income Tax Act. On the 
basis of the valuation report, the assessment for the assessment year 1982-
H 83 was reopened and the Assessing Officer made certain additions towards 
388 
A.B. PAUL l'. err. 
389 
undisclosed investment in the assessment years 1982-83 and 1983-84. A 
Aggrieved, assessee filed appeals which were dismissed by the Appellate 
Authority. On appeal, Tribunal held that the Assessing Officer could not 
have referred the question to the Valuation Officer. Thus a Reference was 
made to the High Court as to whether the Tribunal erred in law in holding 
that the Assessing Officer could not have referred the matter to the 
Valuation Officer for estimation of the cost of construction of a house/ B 
property. Answering the question in the affirmative, the Division Bench 
of the High Court held that the Assessing Officer could not have referred 
the said question under Section 55A of the Act but could have referred it 
under other provisions of the Act. Hence the present appeals. 
It was contended for the assessee that a reference to the Valuation 
Officer could be made strictly in terms and in the circumstances mentioned 
under Section 55A of the Act; that when power to refer to determine the 
cost of construction was available under other provisions of the Act, it was 
c 
not appropriate to invoke Section 55A of the Act; and that since the 
Valuation Officer was appointed under the Wealth Tax Act, he could D 
exercise power in the manner as prescribed under that Act. 
On behalf of the Revenue, it was submitted that the Assessing Officer 
was empowered under provisions other than Section 55A of the Act to 
refer the matter of evaluation of the construction cost to the Valuation 
Officer; and that in the absence of the provisions in the Wealth Tax Act E 
precluding/restricting the Valuation Officer to submit report in respect 
of the matter not covered by that Act, Assessing Officer's reference to the 
Valuation Officer was not without jurisdiction. 
Allowing the appeals, the Court 
HELD: 1.1. Section 55A of the Income Tax Act deals with capital 
gains. For the purpose of assessing the fair market value of a capital asset 
in connection with the computation of capital gains it incorporates several 
provisions relating to a Valuation Officer in the Wealth Tax Act. Clearly 
F 
Section 55A o

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