TaxTMI 
TaxTMI 
2013 (7) TMI 219
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....Government Approved Valuer in respect of the property sold by the appellant and referring the matter to the DVO u/s 55A of the Income Tax Act, 1961. 3. The Ld Commissioner of Income Tax has erred in rejecting the prayer of the appellant based on decided judicial pronouncement of the Hon. Mumbai High court in the case of Commissioner of Income Tax-14 Vs Doulal Mohta HUF and various other decisions of the higher judicial authorities which were binding on him. 2. Facts in brief:- The assessee is an individual and has shown long term capital gain on sale of immovable property at 12, Nibbana CHS, Pali Hill Road, Bandra, Mumbai in which he had 50% share for a total consideration of Rs. 1.44 crores during the financial year 2006-07. The said property was purchased during the financial year 1977-78 for a sum of Rs. 70,000. The fair market value of the said property as on 1st April 1981, was taken at Rs. 7,65,000, as per the approved valuer's report obtained by the assessee. The assessee had also claimed deduction under section 54 on account of purchase of new residential house. The Assessing Officer observed that the fair market value of the property shown by the assessee as on 1st A....
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.... DVO's report. In fact, the appellant has challenged the very power of the A.O. to refer the matter to the DVO u/s. 55A of the Act. In my opinion, this contention of the appellant is not correct. Reliance is placed in the case of Dev Kumar Jam Vs. ITO (2004) 4 SOT 258 (Del) wherein it is mentioned that Sec. 55A empowers the AO to make a reference to a Valuation Officer for ascertaining the fair market value of any capital asset where he differs from a registered valuer in the matter of valuation and, in certain other cases. In this case, the Hon'ble Members have mentioned that no defects in the valuation report were pointed out by the assessee but merely reliance was placed on various decisions. In the case of the appellant also no defect in the valuation report of the DVO have been pointed out. Reliance is also placed on another decision in the case of Jarnail Singh Vs. ITO (2009) 121 TTJ (ASR) 101 wherein, it is stated that section 55A of the I.T. Act provides for a reference of the valuation of the capital asset to a Valuation Officer for ascertaining the fair market value of such capital asset for the purposes of computation of income for capital gains. In this decision, it is ....
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....nless the Assessing Officer forms an opinion that the value so claimed is less than the fair market value and the registered valuer's report is not correct. In support of this contention, he has relied upon the following case laws:- i) CIT v/s Daulal Mohta (HUF), ITA no.103 of 2008, order dated 22.9.2008. ii) ITO v/s Smt. Lalitaben Kapadia, [2009] 28 SOT 34 (Mum.); iii) ITO v/s Shri Pratap M. Indulkar, ITA no.1143/Mum./2010, order dated 9.3.2011; iv) Asha Bharat Shah v/s ITO, ITA no.1716/Mum./2010, order dated 15.2.2011; and v) Rani S. Shetty v/s DCIT, ITA no.7508/Mum./2010, order dated 28.5.2012. 6. On the other hand, the learned Departmental Representative strongly relied on the findings given by the learned Commissioner (Appeals). 7. We have carefully considered the rival contentions, perused the relevant findings of the learned Commissioner (Appeals) as well as the case laws relied upon by the learned Counsel. This issue of reference under section 55A on these circumstances have come up for consideration before the Tribunal in large number of cases. In ITO v/s Pratap M. Indulkar, ITA no.1142/Mum./2010, the Tribunal has relied upon the decision of Sarala N. ....
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....he circumstances of the case the Hon'ble Tribunal was right in law to observe that the Assessing Officer was not justified in making a reference under section 55A of the Act to the DVO for determination of the fair market value of the property?" In para No. 4&5 of its Judgement of Hon'ble High Court held as follows:- "4. The Tribunal in its order dated 23rd July, 2004 has categorically observed thus :- "The first issue that arises for our consideration is whether the reference made by the Assessing Officer to the DVO u/s. 55A is bad in law under the facts and circumstances of the case. This issue, in our considered opinion is covered in favour of the assessee and against the revenue by the Judgement in the case of Rubab M. Kazerani reported in 91 ITD 429 (Mum)(TM). Further the assessee also covered by the Third Member decision of the Pune Bench of the Tribunal, the case of the Krishnabai Tingore Vs. ITO reported in 101 ITD 317 (Pune)(TM) wherein it has been held that reference to DVO can only be made in cases where the value of capital asset shown by the assessee is less than its fair market value of land as on 1st April, 1981 shown by the assessee on the basis of approved....