Valuation Officer reference under section 55A fails where no return was filed and sale consideration cannot be disturbed.

Section 55A permits reference to a Valuation Officer only where the statutory conditions are met and the assessee has made a claim as to value. A reference made before the return of income was filed was invalid because no claim by the assessee was before the Assessing Officer at that time. The provision also could not be used to question the declared sale consideration on the transfer date, as section 55A is confined to determining fair market value of a capital asset. On both grounds, the reference was held to be without jurisdiction and unsustainable.

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Issues: Whether the Assessing Officer could validly make a reference to the Valuation Officer under section 55A of the Income-tax Act, 1961, before the assessee had filed the return and made a claim, and whether section 55A could be used to determine the sale consideration as on the date of transfer.

Analysis: Section 55A permits a reference only for ascertaining the fair market value of a capital asset where the assessee has made a claim as to value and the statutory conditions for reference are satisfied. In the facts of the case, the reference was made before the return of income was filed, so no claim by the assessee was before the Assessing Officer on that date. The record also showed that the reference was effectively made on the footing that the declared sale value on the date of transfer was low, but section 55A does not authorise disturbance of the sale consideration for that purpose. The provision was therefore not attracted on either ground relied upon by the Revenue.

Conclusion: The reference to the Valuation Officer was without jurisdiction and could not be sustained.

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