AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (10) TMI 710
X X X X Extracts X X X X
X X X X Extracts X X X X
....of computation of long term capital gain i.e. fair market value as on 01.04.1981 for the purpose of indexation at Rs. 24,03,838/- for its 1/6th share i.e. the total value of the property at Rs. 1,44,23,028/-. The assessee has also moved cross objection and the inter- connected issue raised by assessee trust is as regards to the order of CIT(A) in not adjudicating the deemed sale consideration to be taken for the purpose of computation of Long Term Capital Gains as on the date of sale of the property i.e. the value as adopted by stamp valuation authority on the basis of circle rates or the property should be referred to DVO in term of section 50C(2) of the Act. 3. At the outset, the Cross Objection filed by assessee is time barred by 564 days and assessee has filed condonation petition stating the reason that the Cross Objection was filed as per the direction of the Bench in the course of hearing on 19.03.2013 as the Bench was of the opinion that the issue raised herein has to be addressed to the Bench by filing a Cross Objection. But, according to Ld. counsel for the assessee, this issue can be raised even under Rule 27 of Income Tax (Appellate Tribunal) Rules, 1963. On query from....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, as he failed to take into account the value determined by stamp valuation authority based on circle rates in view of the provisions of section 50C of the Act at Rs. 1,16,58,995/- for the purpose of computation of Long Term Capital Gains. Accordingly, CIT directed the AO to complete fresh assessment after obtaining valuation report from the DVO. In pursuance to revision order passed by CIT u/s. 263 of the Act, the AO completed assessment u/s. 143(3) read with section 263 of the Act dated 24.12.2009 computing the total income at nil ignoring Long Term Capital Loss declared in the return of income for AY 2005-06 with the following observations: "The Ld. CIT-XII, Kolkata vide his order dated 12.09.08 set aside the said order with a direction to the present AO to complete the said assessment after obtaining the valuation report from the DVO. Accordingly, the case was fixed for hearing by me. Scrutiny of the record reveals that the property in question had been transferred on 22.07.05 relevant to the assessment year 2006-07. Hence the implications of the valuation report as also the observation made by the Ld. CIT in his order u/s. 263 will be applicable in the assessment year 2006-0....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be the base value for adopting the fair market value as on 01.04.1981 for determining the indexed cost for the purpose of computation of long term capital gain. Admittedly, this property was acquired by assessee trust much before 01.04.1981 and assessee has filed approved valuer's report dated 18.10.2006, who valued the assessee's 1/6th share as on 01.04.1981 at Rs. 1,15,38,423/- by applying cost inflation index, the value estimated by registered valuer was at Rs. 24,03,838/- as on 01.04.1981. The assessee has filed this valuation report by registered valuer at pages 31 to 36 of assessee's paper book. The DVO has also valued this property as on 01.04.1981 at Rs. 11,19,295/-. The first question arises whether the property as on 01.04.1981 can be referred to DVO for determining fair market value for the purpose of computation of long term capital gains u/s. 55A of the Act or not. This issue has been answered by Hon'ble Calcutta High Court in the case of CIT Vs. Umedbhai International (P) Ltd. (2011) 338 ITR 506, wherein in similar situation, there was a substitution of the cost as on 1.4.1981, value based on DVO's report on a reference under section 55A of the Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt circumstances for making reference to Departmental Valuation Officer under s. 55A of the said Act. This concurrent fact finding of two authorities are not questioned to be perverse. 7. This Court cannot make any endeavour to make any fact finding nor does it wish to do in absence of plea of perversity. In this case the admitted position is that the assessee submitted valuation made by the registered Valuer. Hence cI. (a) of the aforesaid section is applicable in this case which is set out hereunder- "55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this chapter, the (Assessing) Officer may refer the valuation of capital asset to a Valuation Officer- (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the (Assessing) Officer is of the opinion that the value so claimed is less than its fair market value. (b) In any other case, if the (Assessing) Officer is of the opinion (i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such amount as may be prescribed in this behalf, or (ii) that ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee was relying. Presumably, the case of the assessee was that price offered by the buyer was the highest prevailing price in the market. If this is his case then it is difficult to accept the proposition that the assessee had accepted that the price fixed by the District Sub Registrar was the fair market value of the property. No such inference can be made as against the assessee because he had nothing to do in the matter. Stamp duty was payable by the purchaser. It was for the purchaser to either accept it or dispute it. The assessee could not, on the basis of the price fixed by the Sub-Registrar, have claimed anything more than the agreed consideration of a sum of Rs. 10 lakhs which, according to the assessee, was the highest prevailing market price. It would follow automatically that his case was that the fair market value of the property could not be Rs. 35 lakhs as assessed by the District Sub Registrar. In a case of this nature the assessing officer should, in fairness, have given an option to the assessee to have the valuation made by the departmental valuation officer contemplated under Section 50C. As a matter of course, in all such cases the assessing officer should gi....