TaxTMI 
TaxTMI 
2020 (12) TMI 171
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....ioner (Appeals) erred in appalling the order of assessing officer justifying the reference made to the DVO in contravention of the legal position under section 55 A. (2) The Commissioner (Appeals) erred in accepting the report of DVO even though he is not qualified to carry out valuation of agricultural land as per the condition prescribed in Rule 8(A)(3) of Wealth Tax Act. (3) The Commissioner (Appeals) erred in confirming interest under section 234A, 234B, 234C and 234D of the Income tax Act. 2. Brief facts of the case are that assessee file his return of income for assessment year 2011-12 on 31 May 2011, showing total income of Rs. 2 17300/-. The case was selected for a scrutiny. The assessment was completed under section 143 3 on 31 March 2014. During the assessment the assessing officer noted that during the period relevant to the assessment year under consideration, the assessee along with other corners sold immovable property on 24th May 2010 for a consideration of Rs. 3,10,31,000/-. The property was inherited by assessee along with his two co-shares. The assessee, thus having 1/3rd share in the said property, hence, the assessee has shown sale considera....
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.... we are in his opinion, the value declared by the assessee is at variance from the fair market value. Therefore, in cases where the assessing officer is of the view that the value taken by the assessee is on 1st April 1981, is higher than the fair market value of the asset as on that date, the assessing officer would be unable to make reference to the valuation officer for determining the fair market value of the asset this amended provision is applicable with effect from 1st July 2012 and cannot make reference to the valuation officer in respect of pending assessment before him. It was also stated that no opinion was made by the assessing officer to make reference to the valuer. The objection of assessee er was not accepted by the assessing officer by taking you that the amendment made in the provision of section 55A is not a computational provision. The amendment is made in the existing provision wherein the assessing officer has been empowered to refer the case to the valuation officer, where, in his opinion the value declared by assessee he is at variance from the fair market value. 4. During the assessment proceeding, the assessee filed revised return of income and revised ....
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....s to challenge the validity of reference to the valuation officer. The learned submitted that before making reference under section 55A, the assessing officer has to form an opinion that fair market value is on 1st April 1981 claimed in the computation of income is less than fair market value. In the present case the assessee has shown the value of asset at a higher rate than the fair market value and the amendment to the section 55A( a) i.e. substitution of the words "is at variance with the fair market value" were inserted with effect from 1st July 2012 and the same is not applicable retrospectively, further the assessing officer has to form an opinion that fair market value as on1st April 1981 as claimed by assessee is not fair value. The learned AR of the assessee would submit that the ratio of decision of Hon'ble was rather High Court in case of CIT Versus Gauranginiben S Shodhan Ind. reported in (367 ITR 238) is squarely applicable on the facts of the present case. The learned AR of the assessee also relied on the following case laws. • JigneshKumar S Modi (HUF) and 6 others Vs ITO (ITA No. 544 to 550/Srt/2018, • Shantaben P Patel Vs ITO & 2 other ( ....
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....e than such amount as may be prescribed in this behalf ; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do, and where any such reference is made, the provisions of sub-sections (2),(3), (4), (5) and (6) of ection 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and 4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation.-In this section, "Valuation Officer" has the same meaning, as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957)." 14. The aforesaid provisions are as amended by the Finance Act, 2012 with effect from 1.07.2012 wherein in clause (a), for "is less than its fair market value" was substituted for "at variance with its fair value". As per the Revenue, the amended provisions of section 55A(a) are applicable for the impugned assessment year 2012-13 and the Asse....
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....rred to the valuation officer. In a scenario, where the value so claimed by the assessee is more than its fair market value, the matter couldn't be referred to the valuation officer. However, the amended provisions takes care of both the scenarios and has provided that where the value so claimed by the assessee is at variance with its fair market value, the matter can be referred to the valuation officer. In the instant case, the Assessing officer has invoked the amended provisions and has held that the value so claimed by the assessee is at variance with its fair market value. The contention of the assessee is that the amended provisions have only been brought on the statue books w.e.f 1.07.2012 and the same cannot be invoked in the instant case and therefore, the AO lacks the necessary jurisdiction to refer the matter to the valuation officer. 16. The question is how one should read the amendment in section 55A(a) which has been brought on the statue books w.e.f 1.07.2012. Whether we should read the amendment in the context of transactions which have happened on or after 1.07.2012 and which are liable for capital gains tax and therefore, satisfying the initial condition ....
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....herein the Assessing officer has been given requisite power and authority w.e.f 1.07.2012 to refer the matter relating to valuation of a capital asset to the valuation officer. The question however remains in respect of which all transactions, the Assessing officer is empowered to make a reference to the valuation officer with effect from 1.07.2012. 17. In this regard, we refer to the decision of the Hon'ble Bombay High Court in case of CIT vs. Puja Prints [2014] 224 Taxman 22 (Bom) wherein it was held that the Parliament has not given retrospective effect to the amendment and the law to be applied is as existing during the period relevant to the Assessment Year 2006-07. The findings of the Hon'ble High Court are as under:- "6. We have considered the rival submissions. We find that the impugned order dated 18 February, 2011 allowing the respondent 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 ....
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..... 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 Circular issued by the CBDT is not binding upon the assessee and it is open to an assessee to contend to the contrary. 10. The contention of the revenue that the Assessing Officer is entitled to refer the issue of valuation of the property to the Departmental Valuation Officer in exercise of its power under Sections 131, 133(6) and 142(2) of the Act is entirely based upon the decision of the Guwahati High Court in Smt. Amiya Bala Paul (supra). However, the Apex Court in Smt. Amiya Bala Paul (supra) has reversed the decision of the Guwahati High Court and held that if the power to refer any dispute with regard to the valuation of the property was already available under Sections 131(1), 136(6) and 142(2) of the Act, there was no need to specifically empower the Assessing Officer to do so in circumstances specified under Section 55A of the Act. It further held tha....
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....for the same reasons recorded above, would have no bearing onthe fair market value as on 1.4.1981. The Assessing Officer had not resorted to sub-clause(ii) of clause (b). In any case, clause (b) would apply where clause(a) does not apply since it starts with the expression "in any other case". In other words if assessee has relied upon a Registered Valuer's Report, Assessing Officer can proceed only under clause (a) and clause (b) would not be applicable." 16. In the present case, admittedly the assessee had relied on the estimate made by the Registered Valuer for the purpose of supporting its value of the asset. Any such situation would be governed by clause (a) of section 55A of the Act and the Assessing Officer could not have resorted to clause (b) thereof as held by the Division Bench of this Court in the case of Hiaben Jayantilal Shah v. ITO [2009] 310 ITR 31/181 Taxman 191 (Guj.). In the said decision, it was held and observed as under:- "10. Under clause(a) of sec. 55A of the Act under the Assessing officer is entitled to make the reference to the Valuation Officer in a case where the value of the asset as claimed by the assessee is in accordance with t....
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....gh Court. The Coordinate Bench in case of Sonali Roy (supra) drawing support from the decision of the Hon'ble Supreme Court in case of Karimtharuvi Tea Estate (supra) has further clarified that the amendments which are being applicable from any date other than first April of assessment year would be applied from the next Assessment Year. The amendment brought with effect from 01.07.2012 in section 55A would be applicable from the Assessment Year beginning from first April, 2013 i.e. Assessment Year 2013-14 and not applicable to Assessment Year 2012-13. 25. In light of above discussions, if the facts of the present case are examined, the transaction of sale of land has taken place during the financial year 2011-12 relevant to Assessment year 2012-13, therefore, the amended provisions of section 55A(a) would not be applicable and one shall be guided by the erstwhile provisions of section 55A(a) of the Act. 26. In order to refer the matter to the valuation officer as per erstwhile provisions of section 55A(a), in the instant case, there is no dispute that the liability towards the capital gains has arisen during the year as the transfer of the land has happened durin....