TaxTMI 
TaxTMI 
2016 (2) TMI 696
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....B and 54F on account of investment in agricultural land and purchase of residential house the assessee had declared long term capital loss of Rs. 1,04,12,335/-. During the course of assessment proceedings the AO asked certain details which the assessee provided. 3. So far as indexed cost of acquisition is concerned the AO noted that the assessee has adopted Rs. 310/- per sq.mtr of the agricultural land as on 01-04-1981. He observed from the valuation report of the approved valuer filed by the assessee that the approved valuer has cited 2 sale instances. The first sale instance pertains to a plot admeasuring 1091 sq.mtrs located at Hadapsar which has been registered in Pune during 1984 @ 298/- per sq.mtr. Following the regression method based on the circular of Town Planning and Valuation department, Pune and various circulars issued from time to time the approved valuer has assumed reduction of price from 1984 to 1981. He further noted that the first instance is a developed property within the range of 6 to 8 kms from the centre if Pune Railway station and GPO are taken as reference point of Pune agglomeration. The second sale instance collected by the approved valuer is the land ....
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....ve examined the grounds and the facts available on records and find that the information furnished now will help bringing new primary evidences required for the administration of justice. Ld DR for the revenue find merits in the above argument of the assessee's counsel. Considering the importance of the said additional evidence, we are of the opinion the same should be admitted and the matter should be restored to the files of the Ld. CIT (A). The first appellate authority shall admit the same and adjudicate the issue afresh in both the cases after utilizing the facts emanating from said additional evidences. The Ld. CIT (A) shall grant reasonable opportunity of being heard to the assessee while adjudicating the same and at the time of passing a speaking order as per the provisions of sec.250 sub-section (6) of the Act. Accordingly the grounds are set aside." 5. Subsequently, the CIT(A) directed the AO to adopt the value @ Rs. 75/- per sq. mtr which was the value determined by the DVO. It may be pertinent to mention here that while passing the assessment order the report of the DVO was not available although the matter was referred to the DVO by the AO. 6. Aggrieved with such ord....
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....ce in the instant case the fair market value declared by the assessee is more than the fair market value of the agricultural land, therefore, the AO had no jurisdiction to refer the matter to the DVO. He accordingly submitted that this being a covered matter the order of the CIT(A) should be set aside and the ground raised by the assessee should be allowed. 10. The Ld. Departmental Representative on the other hand heavily relied on the order of the AO and the CIT(A). He submitted that the assessee by adopting higher value as on 01-04-1981 is trying to inflate the indexed cost of acquisition and thereby reducing the taxable capital gain. The DVO had determined the value of the land at Rs. 75/- per sq. mtr whereas the registered valuer of the assessee has determined the same at Rs. 310/- per sq. mtr which is very high and it is just to reduce the taxable capital gain. He accordingly submitted that the order of the CIT(A) be upheld and the ground raised by the assessee should be dismissed. 11. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various d....
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....nt Approved Valuer, who has certified the valuation as on 01.04.1981 at Rs. 32,85,000/-. Accordingly the assessee computed the long term capital gain at Rs. 173,44,985/- and claimed exemption u/s.54B & 54C amounting to Rs. 173,94,000/-. The Assessing Officer did not agree with the valuation as per Govt. Approved Valuer submitted by the assessee. The Assessing Officer adopted the Valuation Report of the Departmental Valuation Officer, Solapur in respect of some other land who valued the land at Rs. 101/- per sq. mtr. and accordingly the Assessing Officer has considered the cost of land in the hands of the assessee at Rs. 5,92,471/- and computed the capital gain at Rs. 313,19,210/- after taking into account exemption at Rs. 173,94,000/- and made the addition of Rs. 139,25,210/-. While doing so, the Assessing Officer has not given the copy of the report of the DVO to the assessee and therefore he relied upon the report of the DVO unilaterally. Moreover, the DVO report was obtained in the case of Gorakh Maruti Tupe & others and is in respect of the property which is altogether different from the property sold by the assessee. The first appellate authority on due examination of the fact....
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....rket value of Rs. 6.68 lakhs even as determined by the DVO. In fact, the AO referred the issue of valuation to the DVO only because in his view the valuation of the property as on 1981 as made by the respondent-assessee was higher than the fair market value. In the aforesaid circumstances, the invocation of s. 55A(a) of the Act is not justified. 8. The contention of the Revenue that in view of the amendment to s. 55A(a) of the Act in 2012 by which the words "is less than the fair market value" are substituted by the words "is at variance with its fair market value" is clarifiactory and should be given retrospective effect. This submission is in face of the fact that the 2012 amendment was made effective only from 1st July, 2012. The Parliament has not given retrospective effect to the amendment. Therefore, the law to be applied in the present case is s. 55A(a) of the Act as existing during the period relevant to the asst. yr. 2006-07. At the relevant time, very clearly reference could be made to DVO only if the value declared by the assessee is in the opinion of AO less than its fair market value. 9. The contention of the Revenue that the reference to the DVO by the AO is susta....
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....tered valuer. In the facts of the present case, cl. (b) of s. 55A of the Act 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. 12. There is one more aspect of the matter. For invoking s. 55A of the Act, there has to be a claim made by the assessee, before the AO can record opinion either under cl. (a) or cl. (b) of s. 55A of the Act to make a reference to the Valuation Officer. The facts of the present case go to show that the reference was made on 26th April, 1996, whereas, the return of income had been filed by the assessee only on 27th Aug., 1996. Hence, on the date of making the reference by the AO, no claim was made by the assessee and the AO could not have formed any opinion as to existence of prescribed difference between the value of the asset as claimed by the assessee and the fair market value. Therefore also, provisions of s. 55A of the Act could not have been resorted to by the AO. 8. In our opinion, the Assessing Officer has no power to make the reference to the DVO for the A.Y. 2007-08 by invoking u/s. 55A of the Income-tax Act for determining fair market value as on 01-04-1981 on the opini....