TMI Blog2013 (7) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... -XXX, Mumbai, for the quantum of assessment passed under section 143(3) of the Income Tax Act, 1961 (for short "the Act") for the assessment year 2007-08, on the following grounds:- 1. The Ld. Commissioner of Income Tax (Appeals) 30 has erred in confirming the assessment order passed by The Ld. Assessing Officer who had erred assessing the Income of the assessee at Rs.17,20,920/- instead of Rs. 2,54,740/- as declared by the appellant in her return of income. 2. The Ld. Commissioner of Income Tax (Appeals) 30 has erred in confirming the action of the Ld. Assessing Officer has erred in rejecting the valuation report given by Registered Government Approved Valuer in respect of the property sold by the appellant and referring the matter to the DVO u/s 55A of the Income Tax Act, 1961. 3. The Ld Commissioner of Income Tax has erred in rejecting the prayer of the appellant based on decided judicial pronouncement of the Hon. Mumbai High court in the case of Commissioner of Income Tax-14 Vs Doulal Mohta HUF and various other decisions of the higher judicial authorities which were binding on him. 2. Facts in brief:- The assessee is an individual and has shown long term capital gain o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has now been made available. 4. The learned Commissioner (Appeals) rejected the assessee's contentions after observing and holding as under:- "I have carefully gone through the assessment order and the argument and reasonings given by the A.O. for rejecting the registered valuer's report, the valuation report of the DVO dated 8.5.2010 and the submission of the appellant. At the outset, In this case, a reference to the DVO was made at the specific request of the appellant made vide letter dated 20-10-2009. It is only when the appellant realised that the DVO has not furnished a favourable report. He has requested to reject the DVO's report. In fact, the appellant has challenged the very power of the A.O. to refer the matter to the DVO u/s. 55A of the Act. In my opinion, this contention of the appellant is not correct. Reliance is placed in the case of Dev Kumar Jam Vs. ITO (2004) 4 SOT 258 (Del) wherein it is mentioned that Sec. 55A empowers the AO to make a reference to a Valuation Officer for ascertaining the fair market value of any capital asset where he differs from a registered valuer in the matter of valuation and, in certain other cases. In this case, the Hon'ble Members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... labhdas (HUF) (supra). 3.3 Thus, the contention of the appellant that AO. did not have any power to make a reference to Valuation Officer u/s. 55A is rejected and the additional ground of appeal taken by the appellant is dismissed." 5. The learned Counsel submitted that this issue had come up for consideration before the Tribunal on numerous occasions wherein the Tribunal has taken a consistent view that if the assessee has substantiated its fair market value as on 1st April 1981, by the report of approved valuer filed before the Assessing Officer, the Assessing Officer cannot make a reference to the DVO under section 55A unless the Assessing Officer forms an opinion that the value so claimed is less than the fair market value and the registered valuer's report is not correct. In support of this contention, he has relied upon the following case laws:- i) CIT v/s Daulal Mohta (HUF), ITA no.103 of 2008, order dated 22.9.2008. ii) ITO v/s Smt. Lalitaben Kapadia, [2009] 28 SOT 34 (Mum.); iii) ITO v/s Shri Pratap M. Indulkar, ITA no.1143/Mum./2010, order dated 9.3.2011; iv) Asha Bharat Shah v/s ITO, ITA no.1716/Mum./2010, order dated 15.2.2011; and v) Rani S. Shetty v/s DC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e FMV claimed by the assessee is higher than actual fair market value and that a reference can be made even where conditions specified in sub-clause (ii) relating to "having regard to asset and other relevant circumstances" is met. It may mentioned here that the aforesaid decision does not consider decision of Hon'ble Bombay High Court as well as decision of Hon'ble Gujarat High Court and to that extent, we are of the view that the said decision is not binding. The Hon'ble Bombay High Court in the case of Daulal Mohata HUF (supra) dealt with following substantial question of law :- "B) Whether on the facts and in the circumstances of the case the Hon'ble Tribunal was right in law to observe that the Assessing Officer was not justified in making a reference under section 55A of the Act to the DVO for determination of the fair market value of the property?" In para No. 4 5 of its Judgement of Hon'ble High Court held as follows:- "4. The Tribunal in its order dated 23rd July, 2004 has categorically observed thus :- "The first issue that arises for our consideration is whether the reference made by the Assessing Officer to the DVO u/s. 55A is bad in law under the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the petitioner had claimed the same at a sum of Rs. 6,25,000 as per registered valuer's report. Therefore, the AO was required to form an opinion that the value so claimed is less than the fair market value. The estimated value proposed by the DVO is shown at Rs. 3,97,000, which is less than the fair market value shown by the assessee as on 1st April, 1981. Therefore, cl. (a) of s. 55A cannot be made applicable. Clause (b) of s. 55A can be invoked only in any other case, namely when the value of the asset claimed by the assessee is not supported by an estimate made by a registered valuer . In the facts of the present case, cl. (b) of s. 55A also cannot be invoked. Therefore there is no question of having recourse to sub-cl. (ii) of cl. (b) of s. 55A of the Act." 14. In view of the aforesaid decisions, we are of the view that reference by the Assessing Officer to the DVO u/s. 55A for valuation of FMV of the property as on 1.4.1981 is not valid for the reasons that FMV declared by the assessee as per Government registered valuer's report was more than the FMV as estimated by the DVO. Since determination of the FMV as on 1.4.1981 was based on the report of the DVO, the same is h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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