TaxTMI 
TaxTMI 
2014 (1) TMI 857
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....i had originally purchased the flat in 1975 for a sum of Rs. 49,980/-. The said flat was sold by his heirs i.e. the assessee, his brothers, sister and mother for a consideration of Rs. 46,00,000/-. As per the sale deed the market value was shown at Rs. 48,33,807. Assessee got the said flat valued by Government Approved Valuer as on 01.04.1981. As per his report the value works out to Rs. 6,09,695/-. Assessee had taken the fair market value at Rs. 6,09,695/- and worked out the indexed cost at Rs. 31,64,317/-, which was reduced from the sale price and the difference between the sale deed value and cost worked as per the cost indexation was offered as long term capital gains. The AO referred the mater to the DVO to ascertain the cost of the as....
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.... the learned CIT(A) wherein it was contended that the value as on 01.04.1981 has to be taken into consideration since the cost in the hands of the previous owner has to be taken in the light of the decision of the ITAT Special Bench [DCIT vs. Manjula Shah 318 ITR (AT) 417 (Mum) (SB)]. The learned CIT(A) accepted the contention of the assessee and directed the AO to recompute the cost accordingly. It may be noticed that during the subsistence of the proceedings before the CIT(A) the DVO finalised his report as per which the market value of the flat as on 01.04.1981 works out to Rs. 1.95 lakhs. The learned CIT(A) directed the AO to substitute the said value for the purchase cost in the hands of the previous owner. Aggrieved by this direction ....
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....s wherein the Departmental Valuation Officer's report was held to be bad in law and in the instant case the AO, having not given the assessee an opportunity of being heard, there is no case for following DVO's report, particularly when no fault was found with regard to the value estimated by the Registered Valuer. 6. On the other hand, the learned D.R. submitted that the aforementioned decisions have not considered the amended provisions of section 55A of the Act. Since the amendment was brought in to clarify the issue, it has to be treated as retrospective in nature and wherever the sale value is at variance with its fair market value the AO is authorised to refer the matter to the Valuation Officer. 7. We have carefully considered the r....