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Showing 321 to 340 of 2364 Records
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2018 (7) TMI 2048
TP Adjustment - addition made by the TPO on account of guarantees provided by the assessee - adjustment in respect to loan granted by the assessee to its Associated Enterprises - tribunal deleted the additions - HELD THAT:- Revenue very fairly states that both the questions raised by the Revenue now stands concluded against the Revenue by the decision of this Court in RespondentAssessee's own case for earlier Assessment Year. Our attention is invited to the orders in CIT v/s. M/s. Everest Kento Cylinders Ltd. [2015 (5) TMI 395 - BOMBAY HIGH COURT] on an identical issues. In fact, the impugned order of the Tribunal, follows its orders for the earlier Assessment Years, which were the subject of the above appeals to this Court. No substantial questions of law,
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2018 (7) TMI 2047
Maintainability of application - initiation of CIRP - whether the order of moratorium will cover a criminal proceeding under Section 138 of NI Act, which provides punishment of imprisonment for a term which may extend to three years or with fine which may extend to twice the amount of cheque or with both?
HELD THAT:- We do not agree with such submission as Section 138 is a penal provision, which empowers the court of competent jurisdiction to pass order of imprisonment or fine, which cannot be held to be proceeding or any judgment or decree of money claim. Imposition of fine cannot held to be a money claim or recovery against the Corporate Debtor nor order of imprisonment, if passed by the court of competent jurisdiction on the Directors, they cannot come within the purview of Section 14. Infact no criminal proceeding is covered under Section 14 of I&B Code.
Appeal allowed.
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2018 (7) TMI 2046
Admissibility of application - initiation of CIRP - Corporate Debtor - existence of dispute - HELD THAT:- There existed a dispute relating to quality of products. The other question required to be determine is that whether said dispute was settled between the parties or not, is a matter which cannot be decided. In a petition under Section 9 of I&B Code it can be decided only by a court of competent jurisdiction.
The Adjudicating Authority has rightly rejected the application under Section 9. However, we make it clear that it will be open to the Appellant to move before an appropriate forum for appropriate relief. In such case, competent court may decide the claim uninfluenced by order passed by the Adjudicating Authority or by this Appellate Tribunal.
Appeal dismissed.
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2018 (7) TMI 2045
Addition u/s 68 - unexplained investment made by the shareholders - ITAT deleted the addition - HELD THAT:- The statement dated 9th September, 2010 made by Kamlesh Jain does not in any manner, state that the investment made in the respondent-assessee Company was an investment which he did not want to make. So far as the shares allegedly/supposedly being taken by the members of the family of the Director of the respondent is concerned, the statement made by Mr. Jain dated 9th September, 2010 is not with regard to the respondent, Company but in respect of its sister company. Thus, there is no conclusive evidence in support of the above submission in the context of the respondent. In any case, this would not necessarily lead to a conclusion that the original investment made by the shareholder in the respondent-assessee was not genuine. This, at the highest, may give rise to suspicion but it does not prove that the investment made originally in the respondentassessee's Company was not genuine. Thus, not in the nature of cash credit as alleged by the Revenue.
The impugned order of the Tribunal, on examination of facts, has come to the conclusion that the investment made by the shareholders is not hit by Section 68. It records, that the entire basis of the Revenue's case is based on surmise that the respondent was taking bogus purchase bills and cash was introduced in the form of share capital without any evidence in support. - Decided in favour of assessee
Bogus purchases - Addition of 5% of cash purchases as profit by way of discount - as alleged assessee had failed to furnish supporting evidence to prove the identity of the party and genuineness of such purchases - ITAT deleted the addition - HELD THAT:- Contention of the Revenue that, when purchases have been made in cash, the respondent would have necessarily received a discount on the price from the seller of the goods is not supported by any material on record. It proceeds, as held by the impugned order of the Tribunal, purely on the basis of surmise that the cash purchases would necessarily involve a discount which has been offered to and availed of, by the respondent-assessee. This submission is not backed by any cogent or demonstrative evidence. The view taken by the Tribunal on this issue is an entirely possible view on the facts and calls for no interference. - Decided in favour of assessee
Addition of 2% as unexplained expenses by way of commission/service charges paid for arranging accommodation bills - Tribunal deleted the addition - HELD THAT:- There is no challenge to the impugned order of the Tribunal holding that the additions on account of bogus purchases is not sustainable. In such a case, there is no reason why the 2% commission would have been allegedly paid on accommodation bills. Thus, there is no unexplained expenditure as even according to the Revenue, before us, there are no bogus purchases. View taken by the Tribunal in the present facts is a possible view - Decided in favour of assessee
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2018 (7) TMI 2044
Addition u/s 68 - Unexplained cash credit - HELD THAT:- As decided in M/S. JELLOTIC SUPPLY PVT. LTD. [2018 (7) TMI 372 - ITAT KOLKATA] and USHA STUD AGRICULTURAL FARM LTD. [2008 (3) TMI 91 - DELHI HIGH COURT] amount received by the assessee in the earlier year and not in the year under consideration and duly credited in the books of account of the assessee for such earlier year cannot be added under section 68 as unexplained cash credit for the year under consideration.
CIT(A) was fully justified in deleting the addition made by the A.O. u/s 68 during the year under consideration by treating the amount in question towards share capital and share premium which was received by the assessee company in the earlier year and not in the year under consideration. - Decided against revenue.
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2018 (7) TMI 2043
Benefit of exemption u/s.11 denied - charitable activity u/s 2(15) - assessee is a charitable trust engaged in the activity of promotion of swimming - HELD THAT:- As decided in own case [2018 (4) TMI 1267 - ITAT MUMBAI] providing sports facilities to general public without restriction to any caste, creed, religion or profession is eligible for exemption u/s 11 of Income-tax Act, 1961.
An activity would be considered "business" if it is undertaken with a profit motive. There should be facts and other circumstances which justify and show that the activity undertaken is in fact in the nature of business. The expressions "business", "trade" or "commerce" as used in the first proviso must, thus, be interpreted restrictively and where the dominant object of an organization is charitable any incidental activity for furtherance of the object would not fall within the expressions "business", "trade" or "commerce".
If the object or purpose of an institution is charitable, the fact that the institution collects certain charges does not alter the character of the institutions. It is not necessary that it should provide something for nothing or for less than it costs or for less than the ordinary price.
It is not necessary that the Trust should provide something for nothing or for less than it cause or for less than the ordinary Trust. Accordingly the orders of the authorities below are set aside. Accordingly, hold that the assessee trust should not be visited with denial of exemption. Hence, the orders of the authorities below is set aside and issue decided in favour of the assessee.
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2018 (7) TMI 2042
Assessment u/s 153A - initiation of search u/s 132 or making of requisition u/s 132A - proof of incriminating material evidencing any investment over and above disclosed in the financial statements - HELD THAT:- Assessment has been completed u/s 153A without any reference to the incriminating material evidencing any investment over and above disclosed in the financial statements and in light of the binding precedents the addition made by the AO is not sustainable, the same is deleted. - Decided in favour of assessee.
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2018 (7) TMI 2041
Levy of Service tax - Pandal or Shamiana Contractor Services - period November, 2004 to January, 2007- demand of service tax alongwith interest and penalty - HELD THAT:- In view of Section 65 (77a), ‘Pandal’ or ‘Shamiana’ is defined to mean a place specifically prepared or arranged for organizing an official, social or business functions; and under Section 65(77b) ‘Pandal or Shamiana Contractor’ means a person engaged in providing any service, either directly or indirectly, in connection with the preparation, arrangement, erection or decoration of a Pandal or Shamiana and includes the supply of furniture, fixtures, lights and light fittings, floor coverings and other articles for use therein - Section (105) (zzw) enumerates any service provided or to be provided to any person by a Pandal or Shamiana Contractor in relation to a Pandal or Shamiana, in any manner and including the services, if any, provided or to be provided as a caterer, to be the taxable service.
Thus, the supply of furniture by the petitioner for Rajasthan Diwas and like functions clearly falls within the ambit of the taxable service - demand upheld - appeal dismissed - decided against appellant.
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2018 (7) TMI 2040
Disallowance u/s. 80IA - assessee could not furnish audit report in prescribed form 10CCB - HELD THAT:- The issue involved in the present Appeal is now not res integra in view of the recent decision of the Division Bench of this Court in the case of Pr. Commissioner of Income Tax, Surat 1 vs. Kiran Industries P. Ltd. ( 1760533 ) as repeatedly taken a view that filing of audited accounts in the prescribed format is a procedural requirement and as long as during the assessment the same has been complied with, the deduction cannot be disallowed. Several other High Courts have taken a similar view. - Decided against the Revenue.
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2018 (7) TMI 2039
Addition u/s 40A(3) - purchases in cash - commercial expediency - Cash payments were accounted in the books of accounts of the supplier. - HELD THAT:- Primary object of enacting section 40A(3) of the Act was two fold, viz: 1) Putting a check on trading transactions with a mind to evade the liability to tax on income earned out of such transactions and 2) To inculcate the banking habits amongst the business community.
Cash payments were accounted in the books of accounts of the supplier. The assessee also furnished the copy of the balance sheet wherein the PNB bank is reported in the assets side of the balance sheet. The AO during the assessment proceedings has called for the information from the supplier, Mr.Vijay Kapoor, who has confirmed the sales to the assessee as well as receipt of the proceeds either in cash or bank deposits. From the above it is clear that both the purchases and sales were duly accounted in the books of accounts of the assessee as well as the supplier.
Therefore, there were no unaccounted transactions and the entire transactions were accounted. That being so, we decline to interfere in the order passed by the ld. CIT(A) and his order on this issue is hereby upheld and the grounds raised by the Revenue is dismissed.
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2018 (7) TMI 2038
Cash purchase violating the section 40A(3) - Government of Uttar Pradesh appointed M/s Saraya Distillery, Sadar Nagara, Gorakhpur, U.P. as its agent and the entire payments i.e. impugned amount paid to the said agent - HELD THAT:- ITAT, Kolkata benches in the case of Amrai Pachwai & C.S.Shop vs DCIT [2014 (2) TMI 979 - ITAT KOLKATA] held that Rule 6DD(b) is applicable that if the payments made to the Government agent in legal tender under the rules framed by it and considering the same and taking into consideration the facts and circumstances of the case that the assessee purchased country liquor and country spirit from the territorial licensee bottling plant IFB Agro Industries Ltd and payments in cash made thereto is protected by the exemption in terms of Rule 6DD(b) of Income Tax Rules, 1962 as per the notification issued by the Government.
Government of Uttar Pradesh appointed M/s Saraya Distillery, Sadar Nagara, Gorakhpur, U.P. as its agent and the entire payments i.e. impugned amount paid to the said agent is to be treated as if paid to Government of U.P and as such said cash payment are covered by the Rule 6DD(b) of IT Rules, 1962. Therefore we are not in agreement with the view taken by Authorities Below and addition confirmed by CIT(A) is deleted - Decided in favour of assessee.
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2018 (7) TMI 2037
Condonation of delay in filing appeal - appeals were filed beyond the condonable period as prescribed under Section 128 of the Customs Act, 1962 - HELD THAT:- The writ petition has been pending before this Court since 2012 and the counter-affidavit filed by the respondents touches upon the merits of the matter as well as reiterates the stand taken in the impugned order. It is no doubt true that the appeals have been filed belatedly. However, the delay is less than two days.
This Court is of the view that the petitioner's right to file the appeals, which is a statutory right, should not be defeated on such a technical ground, though this Court ruled in several cases that the period of limitation prescribed under the Statute should not be extended by this Court. However, considering the peculiar facts and circumstances of the case and also the fact that the delay is less than two days, this Court is inclined to exercise its discretion and condone the delay.
The delay in filing the appeals is condoned - Appeal allowed - decided in favor of appellant.
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2018 (7) TMI 2036
Not comply with the notice u/s 142(1) - revised return filed - HELD THAT:- The return filed on 30.04.2009 is well within the time limit prescribed under the afore-stated provision.
The date for filing the return was mentioned in the notice u/s 142(1) of the Act. But we find that the AO has categorically stated that no notice u/s 142(1) of the Act issued on 18.02.2009 is placed on record. This observation of the AO finds contradiction from the letter dated 26.03.2009 exhibited at page 1 of the paper book because in the said letter, the ACIT, Central Circle – 20, New Delhi has mentioned that a notice u/s 142(1) of the Act was issued on 18.02.2009. Though the period mentioned therein to file return of income was 27.2.2009, but since the AO has accepted the return filed on 30.04.2009, he cannot blow hot and cold at the same time for not treating the same as filed in pursuance to notice u/s 142(1) of the Act. Once the return has been accepted as being filed u/s 142(1) of the Act, there is no reason why the revised return filed on 20.08.2009 should not be accepted. We, accordingly, direct the AO to accept the revised return filed on 20.08.2009.
Since we have directed the Assessing Officer to consider the revised return and decide the claim of expenses afresh, the income shown in the revised return of income, if accepted, shall be the starting point for computing the assessed income. We will now consider each addition mentioned hereinabove. For the sake of clarity, the ld. CIT(A) has deleted the additions made on account of rejection of books of account amounting to ₹ 6.40 crores, in reconciling cash in hand ₹ 10 crores, inadmissible compensation ₹ 7.31 crores and has given partial relief in respect of compensation paid to customers amounting to ₹ 63.47 lakhs. CIT(A) has confirmed the addition of ₹ 2.79 crores being unexplained investment for purchase of property from Verma family.The Revenue is in appeal against the deletion of the additions and the assessee is in appeal against the confirmation of additions.
Rejection of books of account - HELD THAT:- Assessing Officer had no ground for rejecting the books of account or to estimate the g.p. rate. CIT(A) observed that the addition made by the Assessing Officer is neither based on any direct evidence nor any indirect or circumstantial evidence.
Estimation of profit - There is no doubt that the Assessing Officer has rejected the books of account on frivolous grounds and vague observations. We find that during the course of appellate proceedings, the ld. CIT(A) called for certain information/details which were duly complied with. We also find that the ld. CIT(A) asked the Assessing Officer to be present to verify those documents alongwith the ld. CIT(A). But in his wisdom, the Assessing Officer did not care to examine the details/documents alongwith the first appellate authority. Considering the facts in totality, we agree with the ld. CIT(A) that there is no valid ground in rejecting the books of account and estimating the profit of the assessee. The ld. CIT(A) has rightly deled the addition of ₹ 6,40,21,407/- and therefore, no interference is called for. This ground in Revenue’s appeal is dismissed.
Unreconciled cash in hand - As the findings of the first appellate authority are based on facts and as transactions mentioned by the ld. CIT(A) were done through banking channels, we do not find any reason to interfere with the findings of the ld. CIT(A). Addition of ₹ 10 crores has been deleted. This ground is also dismissed.
Capital expenditure - Assessee has paid compensation to 51 flat owners, which, according to him, was a capital expenditure incurred by the assessee out of undisclosed income - HELD THAT:- It is true that notings were found in the impounded documents wherein it has been stated that some of the payments were made in respect of 51 plots. It is equally true that there is no evidence on record which could suggest that the assessee has actually bought back 51 plots and has paid compensation nor there is evidence to show that the assessee has actually done any transactions in respect of those 51 plots. It appears that the addition has been made only on the basis of notings found in the impounded sheet without there being any corroborative evidence on record. It is a settled proposition of law that additions cannot be made only on the basis of assumptions, surmises and conjectures. We, therefore, confirm the findings of the ld. CIT(A).
Buy back transaction - HELD THAT:- if the factual matrix is understood in its true perspective, in the light of Arbitration Award, we find that there is no basis for assuming that the assessee has paid ₹ 17,500/- per sq ft. to Verma family as the transaction was finally settled through arbitration and the impugned area of 2797 sq ft which formed basis for making addition was, in fact, settled at 5594 sq. ft by the Arbitration Award. Considering the facts in totality, we do not find any basis for making the impugned addition. We accordingly direct the Assessing Officer to delete the addition of ₹ 2,79,70,000/-. This ground in assessee’s appeal is allowed.
Compensation paid to customers - HELD THAT:- It is not in dispute that the assessee has been showing the amount received from its customers as advance. It is also not in dispute that the advance was refunded back to the customers on non allotment of the plots. As decided in own case [2013 (6) TMI 622 - ITAT DELHI] no error in the directions given by the ld. CIT(A). The Assessing Officer can revisit this issue afresh in the light of directions given by the first appellate authority. This ground is partly allowed.
Upfront fee disallowance - HELD THAT:- We have already held that revised return filed by the assessee is a valid return and have directed the Assessing Officer to consider the claim of expenditure in the revised return afresh. This issue is embedded in the claims made in the revised return and shall be considered by the Assessing Officer while deciding the same.
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2018 (7) TMI 2035
Payment of royalty on account of obtaining technical know-how - nature of expenses - revenue or capital expenditure - deciding factor regarding nature of expenditure - HELD THAT:- From the clauses of MoU quoted earlier in the order, it is evident that the appellant established a joint venture with the foreign company for manufacture of lacquers, varnishers, paints etc. It has not been disputed that the appellant-company was incorporated after signing the MoU. The foreign company transferred all technical information for manufacture of planned products which included composition/specification of the material, equipment required, techniques of production and tests & procedures of quality control.
Apart from this, the authorities noted the fact that Mrs. Heinz Kohler was deputed for supervising the new products and development to be undertaken by the appellant. As per the MoU, the appellant got exclusive right to sell the products in India. The appellant could use brand name 'BERLAC' for the purpose of sales. The appellant had a right to sell the manufactured products in other countries in mutual agreement with foreign company. The foreign company was assisting the appellant-company for setting up R&D facility for development of new lacquers in India. The appellant had a right to sub-licence the manufacture of planned products.
MoU with foreign company resulted in setting up of new business in shape of joint venture. It was not merely transfer of technical know-how, but it extended to the level of rendering valuable services including setting up of factory. Though, the royalty was to be paid over a period of seven years, there was no restriction on the appellant to continue with the manufacture and sale of products thereafter also. In the present case, the expenditure was incurred at the pre-production stage and hence is being held as capital expenditure. In view of the decisions of the Supreme Court in M/s Jonas Woodhead and Sons Ltd., Madras [1997 (2) TMI 4 - SUPREME COURT] and Honda Seil Cars India Limited [2017 (6) TMI 524 - SUPREME COURT] no blemish can be cast upon by the findings arrived by Tribunal holding that the payment of royalty was capital in nature.
Since the payment of royalty was being made on percentage basis of sales, therefore, payment was revenue in nature, is not well founded. Though, the CIT(A) had allowed the appeal merely on that basis but had erred as the mode of payment either being made in lump sum or in installments or on percentage of sales, is a decision taken by the parties, as per their commercial expediency. It would not be the sole deciding factor regarding nature of expenditure. - Decided against assessee.
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2018 (7) TMI 2034
CENVAT Credit - M.S. Bar, Angles, Channels, Plastic Sheets, Asbestos Sheets, TMT Bars, etc. - time limitation - HELD THAT:- The order of the Tribunal in the case of M/S DIAMOND POWER INFRASTRUCTURE LTD. AND SHRI AMIT BHATNAGAR VERSUS COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, VADODARA-II [2015 (10) TMI 2344 - CESTAT AHMEDABAD] reveals that the issue of admissibility of Cenvat credit on items like M.S. Bar, Angles, Channels, Plastic Sheets, Asbestos Sheets, TMT Bars, etc., was held in favour of the appellant and it was held that the show cause notice was issued beyond normal period of limitation.
CENVAT Credit - input services - Consultancy service - HELD THAT:- The issue was also held in favour of the appellant, however with regards to the admissibility of payment of secondary and Higher Education Cess from the Cenvat credit balance of the Education Cess is concerned the Tribunal has held that, the Tribunal has not accepted the stand of the appellant and thereafter, immediately proceeded to direct the appellant for payment of interest on credit taken in excess on the ground that the same is not taken as a ground in appeal of the appellant.
Interest and penalty - HELD THAT:- In view of the fact that though the specific contentions with regards to the penalty and interest has been taken before the Tribunal, there is no specific finding or reasoning to justify the impugned order in so far as it concerns payment of interests and imposing of penalty on the Director.
Case remitted back to the Tribunal for a fresh hearing and decision on levy of penalty and interest after granting proper opportunity to raise all the contentions and the Tribunal shall assign appropriate reasons to such contentions raised.
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2018 (7) TMI 2033
Penalty levied u/s. 271(1)(c) - HELD THAT:- On fair reading of section 275(1A) of the IT Act, it can be said that fresh penalty proceedings are permissible only with a view to give effect to the order of the higher Forum revising the assessment and a fresh penalty order can be passed and/or penalty can be imposed, enhancing, reducing or canceling the penalty or dropping the proceedings for the imposition of the penalty on the basis of the assessment as revised by giving effect to such order of the Commissioner (Appeals) etc.
Therefore, in a case where the assessment was not required to be revised pursuant to the order passed by the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Hon'ble Supreme Court, as the case may be, the power under Section 275(1A) of the IT Act cannot be exercised and the fresh penalty proceedings cannot be initiated once earlier the penalty proceedings were dropped after considering the reply submitted by the assessee, as there is no revised assessment which is required to be giving effect to.
CIT (A) as well as the learned Tribunal are justified in deleting the penalty imposed under Section 271(1)(c) faced with a situation that earlier the penalty proceedings were dropped after considering the reply submitted by the assessee and that thereafter the assessment was not required to be revised giving effect to the order passed by the CIT (A) as the learned CIT (A) simply confirmed the assessment order determining the income - we confirm the order passed by the learned Tribunal deleting the penalty under Section 271(1)(c) - No substantial question of law.
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2018 (7) TMI 2032
Issues:
1. Whether TDS collected by the Karnataka Housing Board from payments to the Principal Contractor can be credited to the Sub-Contractor?
Analysis:
The High Court considered the appeal filed by the Sub-Contractor-assessee challenging the Tribunal's decision allowing credit/adjustment of TDS made by the Housing Board to the Principal Contractor. The Government Pleader argued that the TDS certificate was not transferable, hence the credit should not be given to the Sub-Contractor. The Government Pleader relied on previous judgments, including one involving M/s Ciscon Project Pvt. Ltd. The Court noted that other related cases were pending before the Division Bench, indicating the complexity of the issue.
The Sub-Contractor's counsel referred to a Supreme Court judgment in the case of Nathpa Jhakri Joint Venture vs. State of H.P., which held that deductions of TDS cannot be made if no tax is leviable under the main enactment. The counsel argued that the TDS collected by the Housing Board should be credited to the Sub-Contractor. The Court acknowledged the need for further consideration on whether the TDS collected from the Principal Contractor can be credited to the Sub-Contractor. The Court admitted the matter for detailed examination without issuing a fresh notice as the parties were already served.
The Court decided to hear the case after eight weeks, allowing time for both parties to prepare their arguments. The judgment highlighted the importance of resolving the issue regarding the credit of TDS collected by the Housing Board from the Principal Contractor to the Sub-Contractor. The case involved complex legal interpretations and required a thorough analysis of relevant precedents and legal provisions. The Court's decision to admit the matter for further consideration indicated the significance of the issue at hand and the need for a detailed examination before reaching a final conclusion.
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2018 (7) TMI 2031
TDS u/s 195 - default u/s 201(1) & 201(1A) - search services rendered by the assessee to its clients based on utilization of data base received by assessee under separate license agreement - PE in India - DTAA with Netherlands - HELD THAT:- As gone through the tribunals order in the case of Spencer Stuart International BV [2018 (6) TMI 359 - ITAT MUMBAI] , wherein the issue for consideration for the year under appeal relates to taxability of search services fee received by assessee from SSIPL under the head fee for technical services. We find that the Tribunal has considered this issue and hence, respectfully following the co-ordinate Bench on this very issue, we confirm the order of CIT(A) deleting the addition. - Decided against revenue
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2018 (7) TMI 2030
TP Adjustment - exclusion of M/s eClerx Services Pvt. Ltd., M/s Infosys BPO Ltd. and M/s Accentia Technologies Ltd. - HELD THAT:- M/s Accentia Technologies Ltd. and M/s eClerx Services Pvt. Ltd. are functionally dissimilar and cannot be compared with the assessee company which is mainly engaged in providing low-end services to the group concerns.
As regards the exclusion of M/s Infosys BPO Ltd., the following question of law arises - “Did the ITAT fall into error in excluding M/s Infosys BPO Ltd from the list of comparables which had been taken into account by the Assessing Officer in the facts of this case?”
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2018 (7) TMI 2029
LTCG 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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