AI Drafter 
TaxTMI 
TaxTMI 
2022 (9) TMI 515
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....tly held with Shri Sandeep Chatterjee (50% ownership). 3. During the assessment proceedings in order to ascertain the value of the property, a reference was made to the DVO, Hyderabad for valuation of the property located at Plot No. 252, Jubilee Hills Cooperative Housing Society, Hyderabad. Subsequently valuation report from the DVO dated 08.10.2018 was received wherein the construction cost of the immovable property at Plot No. 252, Jubilee Hills, Hyderabad is valued at Rs.2,51,500/- against the claim of the assessee at Rs.8 lakhs. Accordingly, notice u/s. 154 of the Act dated 11.04.2019 was issued to the assessee to recompute the long term capital gain in view of the valuation report received from the DVO Hyderabad. 4. In response assessee filed reply vide letter dated 6.05.2019 wherein assessee objected to the proposed amendment to the Assessing Officer. After considering the reply of the assessee, Assessing Officer rejected the same with the following reasons: - "a. The DVO could not assess the building as the same was demolished. Therefore, standard rates approved by CBDT were adopted by the DVO based on the details taken from the valuation report of N. Shiva S....
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....ed Valuer without giving any reason. The Assessing Officer first passed the Assessment Order subject to rectification and he referred the matter to Government Valuation Officer for determining land value and separately construction cost as on 01.04.1981. By the time Government Valuation Officer visited the site, the developer of the property had demolished the bungalow and started the new construction. So the Government Valuation Officer estimated the cost of construction on the basis of standard rates and gave his report giving estimated cost of construction of building but remained totally silent on valuation of land. On receipt of the valuation report, Assessing Officer rectified the assessment based on the above said valuation report. 8. Ld.CIT(A) considering the submissions and findings of the Assessing Officer in the 154 order then found that the claim of the assessee are not to be correct and observed that the DVO could not assess the building as the same was demolished. Therefore, standard rates approved by CBDT were adopted by DVO based on the details taken from valuation report of Shri N. Shiva Shanker dated 01.04.2014 which was also submitted by the assessee. The plin....
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....ns made u/s 154 being bad-in-law must be deleted. 1.1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in not appreciating that the additions of Rs 28,08,320/- being made by the learned AO under rectification proceedings u/s 154 is without any mistake apparent from records. Thus the additions made being bad-in-law must be deleted. 1.2. Without prejudice to the above and without admitting, on the facts and circumstances of the case and in Jaw, the learned CIT(A) erred in not appreciating that at the most the additions made u/s 154 can be considered as arising out of difference of opinion between the two valuation reports. Thus the additions made being bad-in-law must be deleted. 2. Additions made without considering FMV as on 1.4.1981 must be deleted. Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, the learned CIT(A) erred in not appreciating that the learned AO ought to have considered the Fair Market Value (FMV) of the property as on 1.4.1981 in order to arrive at indexed cost of acquisition since the case of the appellant falls u/s 55(2)(b). Accordingly....
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....his context reliance is placed on the decision of Jute Corporation of India Ltd. v CIT & Another 187 ITR 688 (SC) wherein it has been held that "....... the appellant's claim was based on the settled view of law, the Appellate Assistant Commissioner had jurisdiction to permit the appellant to raise the additional ground. It has been held that in the absence of any statutory provision the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed b the Income tax Officer." 20. Further reliance is also placed on the decision in the case of National Thermal Power Co. Ltd. vs. Commissioner Of Income Tax (1998) 229 ITR 383 (SC) 21. Lastly in the case of CIT v Mahalaxmi Textile Mill Ltd (1967) 66 ITR 710 (SC) it was held that: "There is nothing in the Income-tax Act which restricts the Tribunal to the determination of questions raised before the departmental authorities. All questions....
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....s and not the valuation report submitted by the appellant. ADDITIONAL GROUND OF APPEAL 1.2 16. As stated in the table at para 9 & 10 above, both the Valuation reports were based on different methodologies. Further both reports are given by Government Registered Valuers who are professional Civil Engineers. Valuation is a process which requires lot of considerations, assumptions and technical aspects and it requires long drawn reasoning to arrive at a particular Value set in the respective reports. 17. Your Honours' will appreciate that at the most the values determined by the said Valuers can be considered as arising out of differential opinions, not free from subjective considerations and highly debatable. It is settled law that rectification proceedings cannot be initiated on mere change of opinions. 18. Reliance is placed on the following JURISDICTIONAL TRIBUNAL decisions wherein on the similar facts, additions have been deleted by rendering proceedings u/s 154 illegal. (i). Shri Kirit Thakker vs ITO - ITA No. 5892/Mum/2010 dated 28.10.2011. (ii). DCIT vs Ms. Vida D'Lima - ITA No. 5976/Mum/2011 dated 08.04.20....
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....rated by referring to the following paragraphs of his Valuation report stated below. • Para 1.3 of the said report (page 21 of the paper book): Here the purpose of valuation is stated as for considering the CONSTRUCTION COST AS ON 1.4.1981. • Findings of the Valuer at para 11.1 (page 24 paper book) which shows that the DVO has considered estimated cost of construction instead of the fair market value for the purpose of valuation u/s 55A 22. Further Your Honour's kind attention is also invited to para 1.4 of the DVO's report, page 21 of the paper book, wherein the Section under which the said report is being issued is mentioned as under section 142A. This is completely outside the jurisdiction of the DVO as the learned AO has made reference to him u/s 55A as stated in para 4 of the assessment order u/s 143(3), Your Honours will appreciate that Section 55(2)(b) rws 55A(a) requires FMV and not the cost. 23. Also your Honour's kind attention is invited to the fact that the DVO inspected the said property on 04.09.2018 when a reference was made to him on 29.11.2017. Thus he took more than 10 months to inspect the said property afte....
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....subject to the condition of revising the same on receipt of the valuation report from DVO. 17. Before us it was submitted by Ld. AR that Assessing Officer has not stated any reasons for not accepting the valuation report submitted by the assessee anywhere in the Assessment Order passed u/s. 143(3) of the Act. Subsequently valuation report from DVO dated 08.10.2018 was received wherein the construction cost of the immovable property situated at Hyderabad is valued at Rs.2,51,500/. Accordingly, the value determined by the DVO is Rs.2,51,500/- by adopting estimated cost method. Whereas assessee submitted the value of Rs.8,00,000/- adopting the fair market value method. Accordingly, Assessing Officer passed the rectification order u/s. 154 of the Act. 18. Before us assessee has challenged the rectification order passed u/s.154 of the Act without there being any mistake apparent from records, the additions made are bad in law and it can only be treated as difference of opinion between the two valuation reports. 19. Before us, Ld. AR relying on following decisions in the case of Shri Kirit Thakker v. ITO in ITA.No. 5892/Mum/2010 dated 28.10.2011 and DCIT v. Ms. Vida D'Lima i....