Unamended section 55A bars DVO reference to lower an assessee's adopted fair market value for capital gains computation.

For an assessment year governed by the unamended section 55A, the Assessing Officer could not refer the matter to the DVO merely to reduce the fair market value adopted by the assessee on the basis of a registered valuer's report for 01.04.1981. In that setting, the DVO's lower valuation was not a valid basis to sustain an addition to long-term capital gains under section 48. The adjustment made by the Assessing Officer was therefore unsustainable, and the issue was decided in favour of the assessee.

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Issues: Whether, for an assessment year prior to the amendment of section 55A, the Assessing Officer could make a reference to the DVO for reducing the fair market value adopted by the assessee as on 01.04.1981 on the basis of a registered valuer's report, and consequently sustain the addition made towards long-term capital gains.

Analysis: The assessment year in question was prior to the amendment of section 55A. The assessee had supported the cost of acquisition with a registered valuer's report. On that footing, the reference made to the DVO for a lower valuation was not permissible under the pre-amendment provision. The accepted legal position applied by the Court was that, in such circumstances, the DVO's report could not be used to reduce the fair market value adopted by the assessee for computation of capital gains under section 48.

Conclusion: The reference to the DVO for reducing the fair market value was not valid, and the addition made by the Assessing Officer was unsustainable; the issue was decided in favour of the assessee.

Ratio Decidendi: For an assessment year governed by the unamended section 55A, the Assessing Officer cannot seek a DVO valuation to lower the fair market value adopted by the assessee on the basis of a registered valuer's report.

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