Advocates:
['M/S A K RAY', '', 'S P DAS', 'S DEY', 'S RAY', 'A MOHANTY', 'K K SAHOO', 'M/S R CHIMANKAI T', 'A KEDIA']

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IN THE HIGH COURT OF ORISSA AT CUTTACK

S.J.C. Nos.120, 121 and 122 of 1997

In S.J.C. Nos.120, 121 and 122 of 1997

Chiranjib Biswal and others

….

Petitioners

Mr. S. Ray, Advocate

-versus-

Commissioner of Income Tax,

Orissa

….

Opposite Party

Mr. R. Chimanka, Senior Standing Counsel

CORAM:

THE CHIEF JUSTICE

JUSTICE K.R. MOHAPATRA

Order No.

ORDER

12.05.2021

09.

I.A. Nos.4, 5 and 6 of 2019

1. This matter is taken up by video conferencing mode, in the

Vacation Court.

2. These three I.As. have been filed in SJC Nos.120, 121 and 122

of 1997 respectively for amendment of the main applications by

adding Question No.3 as mentioned in the scheduled of the I.As.

3. For the reasons stated, the I.As. are allowed. The amendment

as sought is allowed. Consequently, Question No.3 as mentioned

in the scheduled of the I.As. is added in the main applications for

consideration.

// 2 //

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S.J.C. Nos.120, 121 and 122 of 1997

1. These three applications under Section 256 (2) of the Income

Tax Act, 1961 (IT Act) are directed against a common order

dated 22^nd March 1996 passed by the Income Tax Appellate

Tribunal (ITAT), Cuttack Bench, Cuttack in ITA Nos.93, 94 and

95/CTK/95 for the assessment years (AY) 1988-89, 1989-90 and

1990-91 respectively.

2. The applications are admitted and the following common

Questions of Law are framed for consideration.

i. Whether on the facts and in the circumstances of the

case, the Tribunal is legally justified to deny that rules of

natural justice was not violated by the CIT (A) Orissa,

Cuttack while he made use of materials available to him

through the departmental valuer; and whether non-

confrontation of the material did not vitiate the

proceedings?

ii. Whether on the facts and in the circumstances of the

case the commercial complex as was constructed on the

basis of the terms attached to the agreement and

integrally and directly connected to the property itself

should not have been held as income from business."

// 3 //

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iii. Whether the Assessing Officer was justified in

referring the valuation of the construction of the multi

storied building to the D.V.O. under Section 55A of the

Income Tax Act?

3. The background facts are that Sri Khetra Mohan Biswal, the

original Assessee, constructed a property known as "market

complex' in Bhubaneswar on a leasehold land obtained from the

State Government for a period of sixty years. According to the

Assessee, his main source of income prior thereto was from

agricultural resources and interest on deposits. For the AY 1988-

89, the Assessee did not file his return. After notice was issued

to him under Section 148 of the IT Act, he filed a return in which

while disclosing the income from the agricultural resources and

pisciculture, he claimed loss from the market complex. It may be

mentioned here that the Assessee declared the cost of

construction of the commercial complex, which construction

started in 1987-88 and was completed during AY 1990-91, as

Rs.18,11,500/-. According to the Assessee, he supported his

claim with the valuation report of the registered valuer (RV). He

sought to spread the investment over the three AYs.

4. The Assessing Officer (AO) did not accept the Assessee's

claim regarding valuation of the cost of construction. He then

referred it to the District Valuation Officer (DVO) of the IT

Department, who initially estimated the cost of construction at

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Rs.28,11,600/-. However, after considering the objections of the

Assessee, the DVO reduced the estimated cost to Rs.24,65,659/-.

5. The Assessee then filed a report dated 26^th February 1994 of

the RV, who placed the cost of construction at Rs.19,14,196/-.

6. The AO considered the valuation by the DVO as well as the

report of the RV engaged by the As