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2019 (6) TMI 1571 - AT - Income TaxCapital gain computation - AO referred the matter to DVO - determination of valuation of the property as on 01.04.1981 in terms of provisions of section 55A - CIT(A) not treating the reference to DVO u/s 55A as illegal & uncalled for - whether CIT(A) erred in confirming the reference to DVO as rightly made by AO as per the amended provision u/s 55A w.e.f.? 01/07/2012? - CIT-A treating the registered valuer’s report as fallacious & erroneous - cost of acquisition wherein the assessee has substituted the cost of acquisition with the FMV as on 01.04.1981 at ₹ 380/- per sq.mtrs and the DVO has valued the property’s FMV as on 1.04.1981 at ₹ 10.19 per sq.mtr - HELD THAT:- The transaction of sale of land has taken place during the financial year 201112 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. 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 during the year. There is also no dispute that cost of acquisition as substituted by the assessee with fair market value as on 1.4.1981 is based on and in accordance with the estimate made by the registered valuer. In the instant case, the value of the land shown by the assessee as on 1.4.1981 based on the registered valuer report is considered, it would reveal that the same was in fact even higher than the value subsequently determined by the valuation officer and therefore, the Assessing Officer was not empowered to refer the matter Therefore, without going into the merits of the basis of valuation so adopted by the registered valuer and subsequently by the department’s valuation officer, in absence of a valid reference to the valuation officer, the addition so made under the head “long term capital gains” so far as it relates to cost of acquisition as substituted by fair market value as on 1.4.1981 is directed to be deleted. In the result, the appeal of the assessee is allowed.
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