HOTEL SURYA VILAS PALACE, BHARATPUR V. ACIT-CIRCLE, BHARATPUR, BHARATPUR

ITA 738/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2057 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 19-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA CIT DHK
• Assessee Lawyers: RAJENDRA AGRAWAL
• Keywords: Rejection of books of accounts; Valuation report
• Section: 56(2); 69

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.738/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 M/S HOTEL SURYA VILAS PALACE VILL. JATOLI GHANA, NH-11 AGRA ROAD, BHARATPUR, (RAJ.) CUKE VS. THE ACIT, CIRCLE, BHARATPUR, (RAJ.) LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAFFH4837H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRHDH VKSJ LS@ ASSESSEE BY : SHRI RAJENDRA AGRAWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SMT.ROSHANTA MEENA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07.06.2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 14/06/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), ALWAR DATED 13.07.2015 FOR A.Y. 2011-12 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING THREE GROUNDS OF APPEAL:- 1. THE LD CIT(A) HAS ERRED IN CONFIRMING THAT THE L D. AO HAS NOT ERRED IN MAKING REFERENCE TO DVO U/S 142(2A) OF THE I.T. ACT , 1961. 2. THE LD CIT(A) HAS ERRED IN CONFIRMING THAT THE A O HAS NOT ERRED IN REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) OF THE I.T. ACT, 1 961. 3. THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITI ON OF RS. 3,02,977/- OUT OF TOTAL ADDITION OF RS. 2,36,74,724/- MADE BY THE LD. AO ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION SHOWN BY THE ASS ESSEE AND THE VALUATION AS PER VALUATION REPORT OF DVO. ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 2 2. REGARDING THE FIRST GROUND OF APPEAL, THE LD. A R SUBMITTED THAT SECTION 142(2A) OF THE I.T. ACT, 1961 DOES NOT PROVIDE ANY POWER FOR THE LD. AO TO MADE ANY REFERENCE TO THE DVO. IT IS SECTION 142A O F THE I.T. ACT, 1961 WHICH PROVIDES THE POWER TO THE LD. AO FOR MAKING REFEREN CE TO THE DVO, BUT IN TERMS OF SUB-SECTION (1) OF SECTION 142A, THE REFER ENCE TO DVO CAN ONLY BE MADE WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTME NT REFERRED TO SECTION 69 OR SECTION 69B OR SECTION 56(2) IS REQUIRED TO BE M ADE. BUT IN THE CASE OF THE ASSESSEE, THE LD. AO BEFORE MAKING REFERENCE TO THE DVO, HAS NOT REQUIRED ANY ESTIMATE OF THE VALUE OF ANY INVESTMENT REFERRE D TO SECTION 69 OR SECTION 69B OR SECTION 56(2) OF THE I.T. ACT, 1961. 2.1 IT WAS SUBMITTED THAT AS EVIDENT FROM THE DVO R EPORT, THE LD. AO MADE REFERENCE TO THE DVO VIDE LETTER NO. 1036 DT. 13.01 .2014 AND EVIDENT FROM CERTIFIED COPY OF LD. AO NOTE SHEET FROM 25.07.2013 TO 16.01.2014, BEFORE 13.01.2014 I.E., THE DATE OF REFERENCE TO THE DVO, THE LD. AO NEITHER EXAMINED THE BOOKS OF ACCOUNTS OF THE ASSESSEE NOR REJECTED THE BOOKS OF ACCOUNT BEFORE MAKING ANY REFERENCE TO THE DVO, THE ASSESSEES BOOKS OF ACCOUNT HAD TO REJECTED BY THE LD. AO. HENCE KEEPIN G IN VIEW OF THE ABOVE, THE LD. AO HAS ERRED IN MAKING REFERENCE TO DVO U/S 142(2A) OF THE I.T. 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 HONBLE SUPRE ME 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 H AVE REFERRED THE MATTER TO THE DVO WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED . ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 3 2.3 IT WAS SUBMITTED THAT THE LD. CIT(A) LEAVING AS IDE ALL THE ABOVE FACTS, CIRCUMSTANCES AND SUBMISSIONS VERY ARBITRARILY DECI DED THAT AO WAS JUSTIFIED IN MAKING A REFERENCE TO DVO U/S 142(2A) OF THE IT ACT ON ACCOUNT OF THE DEFICIENCIES NOTICED IN THE COURSE OF EXAMINATION O F RECORDS AND ACCOUNTS BOOKS OF THE APPELLANT WHILE AS EVIDENT FROM THE CE RTIFIED COPY OF LD. AO NOTE SHEET FROM 25.07.2013 TO 16.01.2014, BEFORE 13.01.2 014 I.E., THE DATE OF REFERENCE TO THE DVO, THE LD. AO NEITHER EXAMINED T HE BOOKS OF ACCOUNTS OF THE ASSESSEE NOR REJECTED THE BOOKS OF ACCOUNT AND BEFORE MAKING ANY REFERENCE TO THE DVO ASSESSEES BOOKS OF ACCOUNT HA D TO REJECTED BY THE LD. AO. 3. THE LD DR IS HEARD WHO HAS VEHEMENTLY ARGUED THE MATTER AND SUBMITTED THAT THE REFERENCE TO DVO HAS RIGHTLY BEE N MADE BY THE AO AFTER REJECTION OF THE BOOKS OF ACCOUNTS AND THE ADDITION S HAVE BEEN CORRECTLY DETERMINED BY THE LD CIT(A). 4. FIRSTLY, REGARDING THE CONTENTION OF THE LD AR R EGARDING REFERENCE TO DVO UNDER SECTION 142(2A) AS THE SAID PROVISIONS DO ES NOT PROVIDE ANY POWER FOR THE LD. AO TO MADE ANY REFERENCE TO THE DVO. IT IS NOTED FROM THE REPORT OF THE DVO AVAILABLE ON RECORD THAT THE DVO HAS REC EIVED THE REFERENCE FROM THE ASSESSING OFFICER UNDER SECTION 142A(1) OF THE ACT VIDE LETTER NO. 1036 DATED 13.01.2014. FURTHER, THE ASSESSEE HAS ATTEND ED TO THE VALUATION PROCEEDINGS AND PRESENT THROUGH ITS AR AT THE TIME OF PHYSICAL INSPECTION OF THE HOTEL PROPERTY AND SUBMITTED THE NECESSARY DETA ILS AS CALLED FOR BY THE DVO. GIVEN THE ABOVE, IT SEEMS THAT THE NOTING IN THE ASSESSMENT ORDER OF SECTION 142(2A) INSTEAD OF SECTION 142A IS A MERE T YPOGRAPHICAL ERROR AND MERELY ON ACCOUNT OF SUCH TYPOGRAPHICAL ERROR, IT C ANNOT BE READ AS TAKING AWAY THE ASSESSING OFFICERS POWERS TO REFER THE MA TTER TO DVO UNDER SECTION 142A OF THE ACT ESPECIALLY WHEN DVOS REPORT DOESN T SUPPORT THE SAME. IN ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 4 LIGHT OF THE SAME, THE SAID CONTENTION OF THE LD AR IS DEVOID OF ANY MERIT AND CANNOT BE ACCEPTED. 5. WE NOW REFER TO THE SECOND CONTENTION OF THE LD AR THAT THE LD. AO NEITHER EXAMINED THE BOOKS OF ACCOUNTS OF THE ASSES SEE NOR REJECTED THE BOOKS OF ACCOUNT BEFORE MAKING ANY REFERENCE TO THE DVO. IN THIS REGARD, WE REFER TO THE DECISION OF THE COORDINATE BENCH IN CA SE OF PRITHAVI RAJ BOHRA VS. ITO (SUPRA) WHEREIN THE ISSUE UNDER CONSIDERATION W AS WHETHER THE AO WAS JUSTIFIED IN REFERRING THE MATTER TO DVO U/S 142A. IT WAS HELD BY THE COORDINATE BENCH THAT AS NO BOOKS OF ACCOUNT WERE R EJECTED BEFORE REFERRING THE MATTER TO DVO U/S 142A, THE AO WAS NOT JUSTIFIE D IN MAKING ANY ADDITION IN VIEW OF THE REPORT GIVEN BY THE DVO. THE RELEVAN T FINDINGS ARE CONTAINED AT PARA 2.2, 2.4 AND 2.6 OF ITS ORDER WHICH ARE REPROD UCED AS UNDER:- 2.2 IN THIS CASE, THE PROCEEDINGS UNDER SECTION 14 7/148 WERE TAKEN. BEFORE COMPLETION OF THE ASSESSMENT, THE AO REFERRED THE M ATTER TO THE DVO IN VIEW OF SECTION 142A OF THE ACT. THEREAFTER THE ASSESSME NT WAS COMPLETED AND VARIOUS ADDITIONS WERE MADE. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) CHALLENGING THE REOPENING OF THE ASS ESSMENT, REFERRING THE MATTER TO THE DVO UNDER SECTION 142A AND SUSTAINING THE ADDITION OF RS. 5,07,021/- MADE BY THE AO ON ACCOUNT OF COST OF CON STRUCTION OF THE BUILDING IN THE NAME OF PRITHVI PLAZA. THE LEARNED CIT(A) RE JECTED ALL THE GROUNDS OF THE ASSESSEE AND UPHELD THE ORDER OF THE AO. 2.4 REGARDING GROUND NO. 2 I.E., AGAINST UPHOLDING THE ACTION OF THE AO IN REFERRING THE MATTER TO THE DVO UNDER SECTION 142A, IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE LEARNED CIT(A) HAS COMMITTED A MISTAKE IN NOT FOLLOWING THE ORDER OF THE HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT V. PRATAPSINGH AMROSINGH RAJENDRA S INGH & DEEPAK KUMAR (1993) 200 ITR 788 ( RAJ) AND IN THE CASE OF CIT V. HOTEL JOSHI (200) 242 ITR 478 ( RAJ) AS THE LEARNED CIT(A) HAS FOLLOWED THE D ECISION OF HONBLE UTTARANCHAL HIGH COURT IN THE CASE OF CIT & ANR. V. BHAWANI SHANKAR VYAS (2009) 311 ITR 8 (UTTARAKHAND). IT WAS FURTHER SUBM ITTED THAT IN FACT NO BOOKS OF ACCOUNT WERE REJECTED BEFORE REFERRING THE MATTER TO THE DVO UNDER ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 5 SECTION 142A OF THE ACT. IT WAS FURTHER SUBMITTED T HAT THE DECISION OF HONBLE HIGH COURT HAS BEEN REVERSED BY THE HONBLE SUPREME COURT IN THE CASE OF SARGAM CINEMA V. CIT (2010) 328 ITR 513 (SC). THE C OPY OF THE ORDER WAS ALSO FILED. ACCORDINGLY, IT WAS SUBMITTED THAT THE ORDER OF THE AO IS LIABLE TO BE QUASHED ON THIS GROUND ALONE. 2.6 AFTER CONSIDER THE ORDERS OF THE AO, LEARNED CI T(A) AND THE SUBMISSIONS OF THE LEARNED COUNSEL OF THE ASSESSEE, WE ARE OF T HE VIEW THAT THE ASSESSEE DESERVES TO SUCCEED IN HIS LEGAL GROUND. THE HONBL E SUPREME COURT IN THE CASE OF SARGAM CINEMA V. CIT (SUPRA) WHILE REVERSIN G THE ORDER OF THE HONBLE HIGH COURT HAS HELD THAT THE TRIBUNAL DECI DED THE MATTER RIGHTLY IN FAVOUR OF THE ASSESSEE IN AS MUCH AS THE TRIBUNAL C AME TO THE CONCLUSION THAT THE ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO THE DVO WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED. IN THE PRESENT CASE, A CATEGORICAL FINDING IS RECORDED BY THE TRIBUNAL THAT THE BOOKS WERE NEV ER REJECTED. THIS ASPECT HAS NOT BEEN CONSIDERED BY THE HONBLE HIGH COURT. IN THE CIRCUMSTANCES, THE RELIANCE PLACED ON THE REPORT OF THE DVO WAS MISCON CEIVED. BY OBSERVING THESE OBSERVATIONS, THE DECISION OF HONBLE HIGH CO URT WAS SET ASIDE AND THE ORDER PASSED BY THE TRIBUNAL WAS RESTORED BY THE HO NBLE APEX COURT. THE FACTS IN THE PRESENT CASE ARE SIMILAR AS IN THIS CA SE ALSO NO BOOKS OF ACCOUNT WERE REJECTED BEFORE REFERRING THE MATTER UNDER SEC TION 142A OF THE ACT. THE LEARNED CIT(A) HAS IGNORED THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT WHICH WAS BINDING IN NATURE. HOWEVER, HE HAS CONSID ERED THE DECISION OF HONBLE UTTARANCHAL HIGH COURT WHICH HAS BEEN REVER SED NOW BY THE HONBLE SUPREME COURT. IN VIEW OF THESE FACTS AND CIRCUMSTA NCES OF THE CASE, WE HOLD THAT THE AO WAS NOT JUSTIFIED IN MAKING ANY ADDITIO N IN VIEW OF THE REPORT GIVEN BY THE DVO AND THEREFORE, THE APPEAL ON THIS ISSUE IS ALLOWED AND THE ADDITION SO MADE IS DELETED. 5.1 IT IS NOTED THAT THE COORDINATE BENCH HAS RELIE D ON THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF PRATAP SINGH AMROSINGH RAJENDRA SINGH & DEEPAK KUMAR (SUPRA) AND HOTEL JOSHI (SUPRA ). THESE DECISIONS HAVE BEEN RENDERED PRIOR TO THE AMENDMENT BROUGHT IN THE INCOME TAX ACT BY VIRTUE OF WHICH SECTION 142A WAS INTRODUCED BY THE FINANCE ACT, 2004. HENCE, ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 6 TO THIS EXTENT THE DECISIONS OF THE JURISDICTIONAL HIGH COURT DO NOT SUPPORT THE CASE OF THE ASSESSEE IN THE INSTANT CASE. 5.2. WE NOW REFER TO THE DECISION OF HONBLE SUPREME COURT IN CASE OF SARGAM CINEMA (SUPRA) WHICH HAS CONSIDERED THE PROVISIONS OF SECTION 142A OF THE ACT AND HAS HELD AS UNDER:- IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL DEC IDED THE MATTER RIGHTLY IN FAVOUR OF THE ASSESSEE INASMUCH AS THE T RIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSING AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER (DVO) WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED. IN THE PRESENT CASE, A C ATEGORICAL FINDING IS RECORDED BY THE TRIBUNAL THAT THE BOOKS WERE NEVER REJECTED. THIS ASPECT HAS NOT BEEN CONSIDERED BY THE HIGH COURT. I N THE CIRCUMSTANCES, RELIANCE PLACED ON THE REPORT OF THE DVO WAS MISCONCEIVED. FOR THE ABOVE REASONS, THE IMPUGNED J UDGMENT OF THE HIGH COURT IS SET ASIDE AND THE ORDER PASSED BY THE TRIBUNAL STANDS RESTORED TO THE FILE. ACCORDINGLY, THE ASSESSEE SUC CEEDS. 5.3. FOLLOWING THE HONBLE SUPREME COURT DECISION I N CASE OF SARGAM CINEMA, THE HONBLE PUNJAB & HARYANA HIGH COURT IN CASE OF DR. RAGHUVENDRA SINGH V. CIT [2014] 49 TAXMANN.COM 544, TAKING INTO CONSIDERATION OF THE PROVISIONS OF SECTION 142A OF THE ACT AND CIRCULAR NO.5 OF 2005, ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, HAS HELD THAT WITHOUT REJECTING THE BOOKS OF ACCOUNT, THE MATTER SHOULD N OT BE REFERRED TO THE DVO. RELEVANT OBSERVATION READS AS UNDER: '13. SECTION 142A OF THE ACT HAS BEEN INCORPORATED PRIMARILY FOR VERIFICATION OF THE VALUE OF ANY INVESTMENT IN RESPECT OF CASES ENU MERATED THEREIN. THE ASSESSING OFFICER WOULD NOT BE JUSTIFIED IN INVOKIN G THE AFORESAID PROVISION IN EVERY CASE AND IN A ROUTINE MANNER. WHERE THE ASSES SEE MAINTAINS REGULAR BOOKS OF ACCOUNT FOR THE PURPOSE OF CONSTRUCTION OF THE ASSET AND PRODUCES ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 7 THE VOUCHERS, IT WOULD NOT BE APPROPRIATE FOR THE A SSESSING OFFICER TO REFER THE MATTER TO THE DVO WITHOUT FIRST REJECTING THE BOOKS OF ACCOUNT BY PRIMA FACIE CONCLUDING THAT THE VALUATION APPEARS TO BE MORE TH AN WHAT HAS BEEN DEPICTED IN THE BOOKS OF ACCOUNT. HOWEVER, WHEREVER THE ASSESSEE HAS NOT MAINTAINED THE REGULAR BOOKS OF ACCOUNT OF COST OF CONSTRUCTION OF THE ASSET AND CLAIMS ITS VALUATION ON THE BASIS OF ESTIMATE O F THE REPORT OF THE REGISTERED VALUER, THE ASSESSING OFFICER IS EMPOWER ED TO MAKE A REFERENCE TO THE DVO AFTER FORMING A PRIMA FACIE OPINION THAT TH E VALUE OF THE INVESTMENT IS NOT GENUINELY DISCLOSED AND IS REQUIRED TO BE AS SESSED FOR THE PURPOSES OF SECTIONS 69, 69A OR 69B OF THE ACT. IN OTHER WORDS, SECTION 142A OF THE ACT, THUS, CANNOT BE INVOKED WHERE VALUATION OF THE COST OF CONSTRUCTION IS BONAFIDE AND BASED ON BOOKS OF ACCOUNT WHICH HAS NO T BEEN REJECTED. THE REPORT OF THE DVO WOULD BE DEALT WITH BY THE ASSESS ING OFFICER UNDER SUB SECTION (3) OF SECTION 142A OF THE ACT. THERE IS LO GIC AND REASONING FOR ADOPTING THE AFORESAID VIEW. THERE APPEARS TO BE NO OCCASION FOR THE REVENUE NOT TO ACCEPT THE VALUATION OF THE COST OF CONSTRUC TION OF AN ASSET WITHOUT REJECTING THE BOOKS OF ACCOUNT MAINTAINED BY THE AS SESSEE. IT WOULD NOT ONLY BE UNFAIR BUT AGAINST THE PUBLIC POLICY AS WELL TO ASSUME THAT THE ASSESSEE IS DISHONEST AND HE MUST HAVE SUBMITTED AN INCORRECT A CCOUNT OF EXPENSES/INVESTMENT.' 5.4 FURTHER, DURING THE COURSE OF HEARING, OUR ATTE NTION WAS DRAWN TO THE PROVISIONS OF SECTION 142A. IT IS NOTED THAT AN AM ENDMENT HAS BEEN BROUGHT IN SECTION 142A BY THE FINANCE ACT 2014 W.E.F. 01.1 0.2014 WHEREIN IT IS SPECIFICALLY PROVIDED THAT THE ASSESSING OFFICER MA Y MAKE REFERENCE TO THE VALUATION OFFICER WHETHER OR NOT HE IS SATISFIED AB OUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE. TH E SAID AMENDMENT IS PROSPECTIVE IN NATURE AND DOES NOT APPLY TO THE ASS ESSMENT ORDER DATED 29.03.2014 PASSED FOR THE YEAR UNDER CONSIDERATION. AT THE SAME TIME, IT ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 8 HIGHLIGHTS THE LEGAL POSITION WHICH WAS PREVALENT P RIOR TO THE AMENDMENT AS LAID DOWN BY THE HONBLE SUPREME COURT IN CASE SARG AM CINEMA (SUPRA) THAT THE ASSESSEE AUTHORITY COULD NOT HAVE REFERRED THE MATTER TO DVO PRIOR TO REJECTION OF THE BOOKS OF ACCOUNTS. IT APPEARS THA T THE SAID AMENDED HAS BEEN BROUGHT IN TO OVERCOME THE DECISION RENDERED B Y THE HONBLE SUPREME COURT IN CASE OF SARGAM CINEMA (SUPRA). THE FACT RE MAINS THAT THE LEGAL PROPOSITION AS LAID DOWN BY THE HONBLE SUPREME COU RT IN CASE OF SARGAM CINEMA APPLIES FOR THE MATTER UNDER CONSIDERATION. 5.5 WHAT THEREFORE HAS TO BE EXAMINED IN THE INSTAN T CASE IS WHETHER THE AO HAS REJECTED THE BOOKS OF ACCOUNTS BEFORE REFERE NCE WAS MADE TO THE DVO. IN THIS REGARD, THE LD. AR HAS DRAWN OUR REFER ENCE TO THE NOTING OF THE ASSESSING OFFICER IN THE ORDER SHEET AND SUBMITTED THAT REFERENCE WAS MADE TO THE DVO ON 13.01.2014 AND PRIOR TO THAT DATE, TH ERE IS NO MENTION IN THE ORDER SHEET THAT THE AO EITHER EXAMINED THE BOOKS O F ACCOUNTS OF THE ASSESSEE OR REJECTED THE BOOKS OF ACCOUNTS BEFORE M AKING ANY REFERENCE TO THE DVO. PER CONTRA, THE LD DR HAS DRAWN OUR REFERE NCE TO THE ASSESSMENT ORDER DATED 29.3.2014 AND SUBMITTED THAT ON PERUSAL OF THE ASSESSMENT ORDER, IT IS CLEAR THAT THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED U/S 145(3) AND THEREAFTER, THE REFERENCE WAS MADE TO THE DVO. 5.5 ON PERUSAL OF THE NOTE SHEET OF THE ASSESSMENT PROCEEDINGS, WE FIND THAT THE SAME DOES NOT REPRESENT A CLEAR SEQUENCE O F EVENTS AND PROCEEDINGS LEADING TO THE PRODUCTION OF THE BOOKS OF ACCOUNTS, ITS EXAMINATION AND REJECTION THEREOF, REFERENCE TO DVO AND FINALLY COM PLETION OF THE ASSESSMENT PROCEEDINGS. THERE IS NO MENTION OF REFERENCE TO T HE DVO AS WELL AS THERE IS NO MENTION OF REJECTION OF BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY THOUGH THE ASSESSMENT ORDER TALKS ABOUT THE REJECTION OF B OOKS OF ACCOUNT. THE LD. CIT(A) HAS TAKEN NOTE OF THE ASSESSEES SAID CONTEN TION HOWEVER WE FIND THAT ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 9 THERE IS NO FINDING RECORDED BY THE LD. CIT(A) IN T ERMS OF REJECTION OF BOOKS OF ACCOUNTS BEFORE A REFERENCE WAS MADE TO THE DVO U/S 142A OF THE ACT. IN ABSENCE OF SUFFICIENT MATERIAL AVAILABLE ON RECORD, WE SET ASIDE THE MATTER TO FILE OF THE LD. CIT(A) TO EXAMINE THE SAID CONTENTI ON OF THE LD. AR AFRESH IN LIGHT OF ABOVE DECISION THE HONBLE SUPREME COURT I N CASE OF SARGAM CINEMA (SUPRA) AND DR. RAGHUVENDRA SINGH (SUPRA). 6. SINCE WE SET ASIDE THE MATTER RELATING TO THE RE FERENCE TO THE DVO TO THE FILE OF THE LD CIT(A), THE OTHER TWO GROUNDS RE LATING TO REJECTION OF BOOKS OF ACCOUNTS AND CONFIRMING THE ADDITION OF RS. 3,02 ,977/- ARE ALSO SET ASIDE TO THE FILE OF THE LD. CIT(A) TO EXAMINE THE SAME AFRE SH. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/06/2017. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER SANTOSH* JAIPUR DATED:- 14/06/2017 VKNS'K DH IZFRFYFI VXZSF'KR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S HOTEL SURYA VILAS PALACE, VILL. JATOLI GHANA, NH-11 AGRA ROAD, BHARATPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE, BHARATPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT , 6. XKMZ QKBZY@ GUARD FILE (ITA NO.738/JP/2015) ITA NO. 738/JP/15 M/S HOTEL SURYA VILAS PALACE VS. ACIT, ALWAR. 10 VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT REGISTRAR.