2016 (6) TMI 492

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.... to the assessment year 1996-1997. Aggrieved by the order of the learned Tribunal, the assessee came up in appeal which was admitted on 10th December, 2008 and the following questions of law were formulated : "I. Whether on the facts and in the circumstances of the case order of Tribunal was erroneous in law in ignoring the inherent scheme in valuation certain assets (as was in the present case) as per Section 55A (2)(b) of the Income Tax Act, 1961 and directing the matter to be redone in the light of a special Bench of the Tribunal. II. Whether on the facts and in the circumstances of the case the order of the Tribunal was perverse on the question of legality of reference under Section 55A of the Income Tax Act, 1961 h....

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....a) and (b)(i) to section 55A are concerned, the same cannot be invoked in case of the assessee as the fair market value shown by the assessee is more than the fair market value estimated by the Assessing Officer on the basis of DVO's report. The revenue has mainly harped upon the clause (b)(ii) to section 55A which mentions the power of Assessing Officer to make a reference having regard to the nature of the assets and other relevant circumstances. In our considered opinion, such clause carries a broader spectrum which certainly empowers the Assessing Officer to make reference to the DVO wherein in his opinion the fair market value estimated by the assessee is not proper and since in the present case the reference has been made by the Asses....

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....der section 55A(a) as the fair market value estimated by the registered valuer engaged by the assessee is higher than the actual fair market value. This contention is inherently incorrect. Policy of law is to take the fair market value as on 1st April, 1981 as the basis for the purpose of indexation. If the assessee has shown more than the fair market value he obviously, is interested in increasing the index cost for the purpose of avoiding to pay capital gains. Therefore, the practice adopted by him cannot be permitted. Even assuming that there is a case in which the assessee has offered more than the market value, it is not the policy of law to recover more than what is actually due from the assessee. In either case, the contention of the....