TaxTMI 
TaxTMI 
2015 (4) TMI 940
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....he proceedings calling for the report from the DVO was stayed. 3 Shorn of details, the facts are as under:( a) For the Assessment Year 200203, the Petitioner filed its return of income, returning a loss of Rs. 107.63 Crores. During the previous year relevant to Assessment Year 200203, the Petitioner had sold its property at Andheri (land) for a consideration of Rs. 131.15 Crores. For the purposes of computing its long term capital gains on the sale of land, the Petitioner adopted FMV of the land as on 1st April, 1981 at Rs. 46.70 Crores. This was on the basis of a valuation report submitted by a registered valuer. The resultant difference between the sale price and the FMV on 1st April, 1981 of the land, was subject to capital gain tax; (b) The Assessing Officer by his order dated 24th March,2005 passed an order under Section 143(3) of the Act. The Assessing Officer did not accept the FMV of the land at Rs. 46.70 as claimed by the Petitioner but estimated the FMV as on 1st April, 1981 of the land at Rs. 17.48 Crores. On the basis of the difference between the selling price and the FMV of the land as on 1st April, 1981 as estimated by the Assessing Officer was subjected to ....
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....e contrary to and in defiance of the order of this Court dated 3rd April, 2006 in Writ Petition No.392 of 2006; (c) The Supreme Court in Smt. Amiya Bala Paul v/s. CIT 262 ITR 407 has held that no reference can be made for determining the fair market value of immovable properties in the absence of a specific provision under the Act. The DVO gets jurisdiction to act upon the reference only if the same is made under Section 55A of the Act and not otherwise; (d) The Parliament has not empowered the CIT(A) while entertaining an appeal under Section 250 of the Act to make a reference to DVO under Section 55A of the Act. This is evident from specific provision found in Section 23A(7) of the Wealth Tax Act, which is pari materia to the powers of the CIT(A) under Section 250 (4) of the Act; and (e) Without prejudice to the aforesaid, it is submitted that the jurisdiction under Section 55A of the Act, can only arise if at the relevant time, the Assessing Officer or CIT(A) is of the opinion that value of land estimated by the Registered Valuer is less than its FMV. In this case, it is not disputed that the value of the land declared by the Registered Valuer is not less than its FMV. ....
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....981 for the purposes of determining the capital gains chargeable to tax. This is evident from the communication dated 21st December, 2006 addressed by the CIT(A) to the DVO which reads as under:" To, The District Valuation Officer, Piramal Chambers, Lal Bagh, Parel, Mumbai 400 007. Sub: Appeal No.CIT(A)XXI/1(3)/IT.53/0506 in the case of Rallis India Ltd. A. Y . 200203. Please refer to the above. This is with reference to letter No.DCIT. Cir.10/0405/ Kol/14 dt. 7.4.2005 of Dy. CIT. Circle10, Kolkata regarding valuation of the plot located at Suren Road, Plot bearing CTS Nos.221 to 227, 229 to 233, 236, 237, 244 and 245 of Village Gundavali at Andheri (E), Mumbai 400 093 (copy enclosed for your convenience). Appeal has been filed in the above case on the ground that the AO erred in not accepting the valuation report giving the fair market value as on 1.4.81 at Rs. 46.70 crores of Andheri property furnished by a registered valuer and, that the valuer had valued the said property without substantiating the basis and the AO further erred in valuing the said property as on 1.4.1981 on an adhoc basis at Rs. 17.48 crores. For this purpose, AO has referred the mat....
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....er Section 250(4) of the Act can only be in respect of issues which arise under the Act and for which specific provision have been made and the Assessing Officer has failed to do what he ought to have done. Thus, this power of enquiry though very wide has to find its source in one of the substantive provisions of the Act. It is in the context of substantive provisions that the CIT(A) has to examine whether Assessing Officer either did no enquiry at all or made insufficient enquiry. This power cannot be exercised dehors the substantive provisions of the Act. We find that the only provisions then existing to make reference to the DVO for the purposes of determining the FMV to compute the capital gains was found in Section 55A of the Act. 12 We shall now deal with the contention of the Petitioner that there is no power available to CIT(A) under Section 55A of the Act to make any reference to the DVO. It is submitted that power under Section 55A of the Act can only be exercised by the Assessing Officer. In support of its submissions, the Petitioner has drawn attention to Sections 131, 133, 134, 189(2), 271(1)(c),271G, 271A and 271AA of the Act where specific reference has been made ....
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.... could be a subject matter of examination by the CIT(A), in an appeal before him. In this case, the issue of the FMV as on 1st April, 1981 was admittedly raised by the Petitioner in its appeal before the CIT(A). Thus the CIT(A) during the appellate proceedings before him can exercise powers under Section 55A of the Act and can make such enquiry in terms of Section 250(4) of the Act, either himself or direct the Assessing Officer to do so and report in terms of Section 250(4) of the Act. The order of this Court dated 3rd April, 2006 in W. P. No.392 of 2006 has no application in the present facts. 14 Thus, the CIT(A) can make further enquiries into FMV as on 1st April, 1981 in view of the Assessing Officer failing to make such enquiry under Section 55A of the Act while passing the Assessment Order. The only other provision to make a reference to a Valuation Officer is Section 142A of the Act introduced by Finance (No.2) Act 2004 with retrospective effect 15th November, 1972. Section 142A of the Act deals with determination of the FMV of investments referred to in Section 69 or 69B of the Act or to the value of bullion, jewellery or other valuable articles referred to Section 69A o....
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....s observed above, the powers under Section 250(4) of the Act of the CIT(A) though very wide, yet it would be circumscribed by the substantive provisions of the Act. The enquiry made by the CIT(A) under Section 250(4) of the Act cannot be outside the scope of the Act. The Revenue in spite of our repeated efforts insists on the fact that the power is being exercised only under Section 250(4) of the Act alone. No other provisions of the Act to determine capital gains under which the enquiry could be directed the CIT(A) in the present facts is applicable according to revenue. In view of the above, we cannot sustain the reference under Section 250(4) of the Act. 19 It may be pointed out that the Supreme Court in Smt. Amiya Bala Paul (supra) dealt with somewhat similar issue and the Revenue therein relied upon Section 142(2) of the Act to contend that by virtue of the above provisions, the Assessing Officer could order an enquiry by the DVO de hors Section 55A of the Act. For convenience, we reproduce Section 142(2) of the Act as under:" For the purpose of obtaining full information in respect of the income or loss of any person, the Assessing Officer may make such enquiry as he....
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....uary, 2007 in respect of the Sections 55A of the Act invoked by him. At that time, Counsel for the Revenue informed us that he is briefed only to appear for Respondent Nos.1, 3 and 4 and that he does not appear for the DVO - i.e. Respondent No.2 and therefore, is unable to respond to our query. In the above circumstances, we closed the matter 'for orders'. 23 Thereafter, it was brought to our notice that Counsel for the Revenue has filed his Vakalatnama only on 2nd February, 2015 wherein the name of the Respondent was indicated as Commissioner of Income Tax3 who incidentally is not one of the parties to the Petition. In the above circumstances, we again kept the matter 'for directions' on 6th February, 2015. On pointing out the aforesaid facts, Counsel for the Revenue submitted that he would file fresh Vakalatnama in respect of all the Respondents and that he does appear for all the Respondents. This, after we pointed out that at the time of admission, the Counsel for the Respondents had waived service for all the Respondents including the DVO. We do understand that neither the Respondents or its Counsel had anything gain on the above account. It appears to have ....