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TMI Blog2005 (6) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... wal has stressed upon ground No. 1 which reads as follows: "On facts and circumstances prevailing in the case and as per provisions of law, it be held that the value of the property as on 1-4-1981 should have been taken at Rs. 4,61,000 as is adopted by the appellant. It may further be held that the reference made by the Assessing Officer is erroneous on facts and circumstances prevailing in the case is contrary to the scheme of the Act and is beyond his jurisdiction. It may further be held that Assessing Officer should have accepted the value adopted by the appellant and should have disregarded I he value ascertained by the valuation officer as per the provisions of the Act and as per the scheme of the Act. Just and per relief be granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he valuation as on 1-4-1981 determined by the DVO at Rs. 2.13 lakhs after adopting the land rate at Rs. 30 per sq.m. On merits, a detailed discussion have been made before the learned CIT(A) and it was argued that the property was situated closed to a posh and fast growing area of Kalyani Nagar having more potential of development. On the other hand, the DVO has cited the sale instances of the area of some distance having no development potential in that area. It was also argued that the sale instances quoted by the DVO were of small plots which were not comparable with the size of the land sold by the assessee. A legal question was also raised before the learned CIT(A) that whether the Assessing Officer has rightly invoked the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its fair market value. 5. Before we proceed further it is necessary to settle this legal issue. On behalf of the revenue, it was argued by the learned DR that the Assessing Officer has at prima facie reasonable belief that the fair market value was not correctly adopted by the assessee, therefore he has referred the matter to the DVO. In the opinion of learned DR, this was sufficient to refer the valuation to the DVO if prima facie the valuation was found to be incorrect as in the instant case, the approved valuer of the assessee has adopted the fair market value as on 1-4-1981 without relying upon any sale instances. The learned DR has also mentioned that first of all the issue is covered by section 55A(a). However, clause (b) is also app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e DVO has adopted the land rate at Rs. 30 per sq.m. as on 1-4-1981. So, the factual position is that the value, so claimed by the assessee was not less than its fair market value but higher than its fair market value as on 1-4-1981. This was the basic question before the Mumbai Benches that whether in such a situation when the value so claimed is not less than its fair market value then the reference to valuation officer was in accordance of law and as per the statute or not. The question was answered vide para No. 18, page 474, relevant portion reproduced below: "The only section which is relevant for making reference to DVO/Income-tax Act is section 55A only. The sub-section (a) of section 55A gives power to the Assessing Officer for ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that the reference could have been made if the ITO was of the opinion that having regard to the nature of assets and other relevant circumstances, it was necessary so to do. The Court was of the opinion that in that appeal there was nothing special about the nature of asset which would have justified to make a reference to the DVO. Further the Court has held that no attempt was made to justify the action of the ITO under any other provision of section 55A. So, it was opined that the reference to DVO was not in accordance with law and the same was quashed. On careful perusal of the facts and circumstances of the present appeal, we can say that this precedent has also been correctly relied upon by the learned AR. Now, we have to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 55A(b) having regard to the nature of the asset and other relevant circumstances if it is necessary so to do. On careful perusal of the Third Member decision, we have noticed that this objection of learned DR was also in that appeal and which was duly answered by the Co-ordinate Bench by holding that neither the Assessing Officer nor the CIT(A) can assume power to give such a direction where the value of the property disclosed by the assessee based upon the approved valuer's report. In our humble opinion, it was rightly held by the ITAT because the wordings of clause (b) are such that "in any other case" if the Assessing Officer is of the opinion that having regard to the nature of the asset it is necessary so to do. So, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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