TaxTMI 
TaxTMI 
2014 (1) TMI 764
X X X X Extracts X X X X
X X X X Extracts X X X X
....ircumstances of the case and in law, the ITAT was right in holding that the reference made by the AO to the valuation officer per se is bad in law? Further, whether the ITAT was justified in observing that the reference to the DVO u/s. 55A of the IT Act 1961 is to be made when the value of the property disclosed by the assesee is less than the fair value and not vice versa thereby ignoring the provisions of section 55A(b)(ii) of the Act 1961 and paragraph 26 to 28 of circular No.96 dated 25.11.1972 of the CBDT? (b) Whether on the facts and in the circumstances of the case and in law, the ITAT was right in directing the AO to accept the valuation given by the respondent as the Fair Market Value on the basis of the registered valuer's report....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Valuation Officer who valued the property at Rs.6.68 lakhs as on 1 April 1981 and the indexed cost at Rs.33.20 lakhs. Consequently, the Assessing Officer by his Assessment Order enhanced the capital gain of the appellant from Rs.11.20 lakhs to Rs.1.61 Crores; (c) Being aggrieved, the respondent assessee filed an appeal before the Commissioner of Income Tax (Appeal). By an order dated 29 October 2009, the Commissioner of Income Tax (Appeal) dismissed the appeal of the respondent assesssee; (d) Being aggrieved, the respondent assesee preferred a Second Appeal before the Tribunal. The Tribunal by the impugned order held that in view of Section 55A(a) of the Act, it was not permissable for the Assessing Officer to make a reference to the De....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Assessing Officer was justified in making the reference to the Departmental Valuation Officer for redetermining the cost of acquisition of the property. In support, reliance was placed upon the CBDT circular No.96 dated 25 November 1972 ; and (c) In any event, an Assessing Officer is entitled to call for a report from the Departmental Valuation Officer to determine the fair market value of a property in exercise of its power under Sections 131, 133(6) and 142(2) of the Act while completing the assessment. This power is dehors Section 55A of the Act. In support reliance was placed upon the decision of the Guwahati High Court in Income Tax Officer v/s. Smt. Gita Rani Banik 251 ITR 712 wherein the Guwahati High Court follows its earlier decis....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessee's appeal holding that no reference to the Departmental Valuation Officer can be made under Section 55A of the Act, only follows the decision of this Court in the matter of Daulal Mohta HUF (supra). The revenue has not been able to point out how the aforesaid decision is inapplicable to the present facts nor has the revenue pointed out that the decision in Daulal Mohta HUF (supra) has not been accepted by the revenue. On the aforesaid ground alone, this appeal need not be entertained. However, as submissions were made on merits, we have independently examined the same. 7 We find that Section 55A(a) of the Act very clearly at the relevant time provided that a reference could be made to the Departmental Valuation Officer only when t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....revenue that the reference to the Departmental Valuation Officer by the Assessing Officer is sustainable in view of Section 55A(a) (ii) of the Act is not acceptable. This is for the reason that Section 55A(b)of the Act very clearly states that it would apply in any other case i.e. a case not covered by Section 55A(a) of the Act. In this case, it is an undisputable position that the issue is covered by Section 55A(a) of the Act. Therefore, resort cannot be had to the residuary clause provided in Section 55A(b)(ii) of the Act. In view of the above, the CBDT Circular dated 25 November 1972 can have no application in the face of the clear position in law. This is so as the understanding of the statutory provisions by the revenue as found in Cir....