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2014 (2) TMI 678 - AT - Income TaxComputation of capital gains as per Section 50C of the Act - Legality of reference made by the Assessing Officer u/s 55A to the DVO – Held that:- As per provisions of Section 55A when the Assessing Officer finds that value of the asset as claimed by assessee is at a variance with its fair market value, with a view to ascertain the fair market value of a capital asset for the purpose of computing capital gains under Chapter IV of Income-tax Act, 1961, the Assessing Officer may refer the valuation of capital asset to a DVO. Since Assessing Officer, was computing capital gains, issue of commission u/s 131(1)(d) to the DVO for ascertaining the fair market value u/s 55A was justified - Thus, there was no infirmity for the reference made to Valuation Officer u/s 55A for ascertaining the fair market value of the property. Correctness of Valuation arrived at by DVO – Held that:- The question of correctness of valuation by DVO, is a purely question of fact - In a reference made u/s 55A, the DVO has to estimate/determine fair market value of assets as on the date of transfer - Such estimation of fair market value depends on the advantage/disallowance-advantages attached with the property - since the valuation arrived at by Stamp Duty Authority was excessive, the Assessing Officer has made a reference to the Valuation Officer u/s 55A for ascertaining/estimating the fair market value as on the date of transfer - On the basis of such estimation/value arrived at by the DVO, the capital gain on transfer of property is being ascertained - All the factors are having definite bearing on the fair market value of land - By taking all these adverse factors into consideration, the approved valuer had valued the land as against value arrived at by the DVO - no defect was pointed out by any of the lower authorities in the valuation so arrived at by the approved valuer – the AO is to recompute the gain after reducing the valuation arrived at by the DVO by 20 % or the actual sale consideration received by assessee, whichever is higher – Decided partly in favour of Assessee.
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