TMI Blog2007 (10) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... y situated in Corporation Colony, North Ambadevi Road, Nagpur, on 25-1-1998. The property in question measured 6,168 sq.ft. of land on which residential house measuring 1,000 sq.ft. was constructed. The land was purchased by the assessee on 7-2-1979 for a sum of Rs. 37,014 at a rate of Rs. 6 per sq.ft. While computing the capital gains the assessee relied on Valuer s report of a registered Valuer Shri H.W. Rajesh, which showed the fair market value of the land and building thereon as on 1-4-1981 at Rs. 11,81,900. The sale proceeds of the land was Rs. 40 lakhs. The index of cost of acquisition was taken at Rs. 41,48,461 and thus a capital loss of Rs. 1,48,469 was declared. However, the Assessing Officer did not accept the determination of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . in 1979 when the cost of the land could just rise by 20 per cent in two years at the rate of 10 per cent every year and, therefore, adopting the rate at 11.88 per sq.ft. was reasonable. He, accordingly, dismissed the appeal filed by the assessee. 4. Before us, assessee raised the following grounds : "1.That the entire assessment is illegal, void and without jurisdiction. 2.That the Assessing Officer erred both in law and in facts in referring the matter to the Departmental Valuation Officer. 3.That the Report of the Registered Valuer filed by the assessee along with his return should have been accepted since the same was based on auction of similarly located property and the said auction was taken on a date which was very close ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r could not have referred the matter to the DVO because reference under section 55A could have been made only when fair market value of the property is more than what the assessee had declared. In the present case, fair market value of the property as on 1-4-1981 is estimated at lesser figure than shown by the assessee. Therefore, reference is invalid. The ld. A.R. relied on the following decisions : 102 TTJ 974 (Bom.) ( sic ) Smt. Krishnabai Tingre v. ITO [2006] 101 ITD 317 (Pune). 97 TTJ 690 (Mum.) ( sic ) Even otherwise, according to the ld. A.R., the DVO has not given any opportunity to the assessee before arriving at the rate of Rs. 11.88 per sq. ft. The sale instances given by the DVO are not comparable and auction rates g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. In this context, we find it relevant to refer to section 55A, clauses ( a ) and ( b ) which read as under : "55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer ( a )in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion that the value so claimed is less than its fair market value; ( b )in any other case, if the Assessing Officer is of opinion ( i )that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such perce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 12 per sq. yard claimed by that assessee. The reference so made was declared invalid. Regarding reference under clause ( b )( ii ) of section 55A, Hon ble Gujarat High Court held that reference under that sub-clause could be made if the ITO was of the opinion that as regards the nature of assets and other relevant circumstances, it was necessarily so to do, a reference could be made. Since the asset in question was only a piece of land, there was nothing special about the nature of that asset and no other relevant circumstance was pointed out for enabling to make such reference. Similar decision was given by Hon ble Mumbai, ITAT in the case of Sajjan Kumar M. Harlalka v. Joint CIT [2006] 100 ITD 418 , wherein reliance was plac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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