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2018 (7) TMI 2029 - AT - Income TaxLTCG of immovable property - reference to DVO - assessee has submitted a valuation report of Registered Valuer who has valid the property based on sale instances whereas the AO adopted the fair market value of property based on DVO report - Whether AO was justified in applying the provisions of Section55A(b)(ii) of the Act at relevant point of time? - scope of amendment - HELD THAT:- Reference to DVO can be made in two situations; first, the value is adopted based on report of registered valuer and second, in any other case. In assessee's case, fair market value adopted as on 01.04.1981 is based on valuation report of registered Valuer. AO should have applied the provisions of 55A(a) and according to said provision, fair market value claimed by assessee can be rejected only if fair market value is less than fair market value as per AO. As fair market value claimed by assessee as on 1st April, 1981 is higher than that estimated by AO provisions of 55A should not be invoked. The provisions of Section 55A(b)(ii) as resorted by Assessing Officer for referring the matter to DVO can be invoked only in case the valuation report is not submitted by assessee. Thus, reference made by Assessing Officer u/s.55A(b)(ii) was not correct. Where the fair market value of property is shown more than the Fair Market Value, the AO cannot refer the same to valuation relating to assessment year falling before the date of 01.07.2012. Since the assessment made is for the assessment year 2010-11, the AO cannot make reference to DVO for the valuation of property, where value of property is not less than the value of fair market value. This view is supported with decision of CIT v. Puja Prints [2014 (1) TMI 764 - BOMBAY HIGH COURT] wherein it was held that the Assessing Officer referred the issue of valuation to the Departmental Valuation Officer only because in his view the valuation of property as on 1981 as made by the assessee was higher than the fair market value. Therefore, invocation of section 55A (a) was not justified. Contention of the Learned Departmental Representative that reference was made after 01.07.2012 is not tenable in law as the amendment made in section is substantive in nature which is relevant to assessment year commencing after the date of amendment i.e. F.Y. 2012-13 relevant to A.Y. 2013-14, hence, it is not applicable for the assessment year 2010-11, as the assessment involved is prior to period of 01.07.2012. AO was not justified in referring to DVO or adopting valuation based on valuation report. The amendment in section 55A was qua prior period to 01.07.2012 and not qua proceeding prior to 01.07.2012. - Decided in favour of assessee.
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