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2005 (5) TMI 610 - ITAT MUMBAIValuation cell u/s 55A - fair market value - Whether the reference made u/s 55A of the Income-tax Act by the Assessing Officer was a valid reference or not - HELD THAT:- The reference can be made under section 55A, clause (b) sub-clause (ii), by the Assessing Officer if he is of the opinion having regard to the nature of the asset and other relevant circumstances that it is necessary to do so. We are of the considered view that it is obligatory on the part of the Assessing Officer to record such other relevant circumstances on the basis of which he forms such opinion in order to refer the matter to the valuation cell under the said clause. The hon’ble Rajasthan High Court in the case of CIT v. Hotel Joshi [1999 (11) TMI 56 - RAJASTHAN HIGH COURT], has held that for invoking sub-clause (ii) of clause (b) of section 55A the Assessing Officer is required to form an opinion on the basis of the material on record that reference to the District Valuation Officer for ascertaining the fair market value of the asset is necessary having regard to the nature of the asset and other relevant circumstances. It is also necessary to record as to why it is necessary to adopt such a course. Nothing has been shown to us by the Revenue to state that the reference was made under clause 55A(a) or 55A(b)(ii) and if it was made u/s 55A(b)(ii) then what circumstances were in existence on the basis of which the Assessing Officer had formed his opinion to make such reference. In the absence of the same we hold that the reference made to the Valuation Officer was invalid. Since we are deciding the legal issue in favour of the assessee we do not find any need to go into the merits of the case and as such the other grounds of the assessee’s appeals are allowed for statistical purposes. In the result, the appeals of the assessee are allowed.
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