Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 189 - AT - Income TaxLong term capital gain on sale of land - AO mandate to refer the matter to DVO for Fair Market Value - CIT -A deleted the addition as AO did not have mandate to refer the matter to DVO for Fair Market Value - HELD THAT:- As far the FMV as on 4.09.2008 is concerned, the DVO has correctly valued the property as on 4.09.2008 at ₹ 40,20,54,000/ -, of which the appellant is a co-owner having share of 16,639 sq. mhos. Accordingly, the sale consideration of the appellant's share of the property @ ₹ 4806.67 (₹ 40,20,54,000/- divided by the total area of the property i.e. 83,645 sq. mtrs.) works out to ₹ 8,02,37,742/ -. Therefore, the sale consideration of the appellant's share of the property, as determined by the DVa, is taken at ₹ 8,02,37,742/-. As per the provisions of Section 55A of the Act for the year under consideration, reference can be made by the AO to the Valuation Officer for ascertaining the PMV of a capital asset where the AO is of the opinion that the value of the asset as claimed by the appellant, is less than its PMV. However, in the instant case, the AO has referred the matter to the DVO to verify the correctness of the value adopted by the Valuer's report as on 1.04.1981. This is not in line with the provisions of Section 55A of the Act as the section implies that the AO should be of the considered opinion that the value of asset claimed by the appellant is less than its PMV and not for any verification purpose. In the DVO's report, the PMV as on 1.04.1981 was determined at ₹ 68,45,000/- which was much lower than the valuation of the Approved Valuer of the aggregate amount of ₹ 2,27,08,814/-. Therefore, in light of the existing provisions of Section 55A of the Act, relevant for the A.Y. under consideration, the AO did not have the mandate to refer the matter for valuation of FMV as on 1.04.1981 to the DVO u/s 55A of the Act amendment to Section 55A of the Act by the Finance Act, 2012 wherein the words 'is less than its fair market value' was substituted by 'is at variance 'with its fair market value' is w.e.f. 1.07.2012 which was not applicable for the A.Y. in the instant case i.e.A.Y. 2010-11 with respect to seeking Valuation Report from the DVO for the FMV as on 1.04.1981. CIT(Appeals) has given a categoric findings on the issue after placing reliance on the various judicial pronouncements and therefore, there is no reason to interfere with the findings of the Ld. CIT(Appeals) and the same is thereby upheld. Thus, the grounds raised by revenue in the appeals are dismissed.
|