TMI Blog1998 (6) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... sister concerns. The CIT(A), in principle, agreed with the findings of the Assessing Officer but restricted the addition to only ₹ 2,74,430 on the ground that the amount debited to the P L a/c is only this amount. 3. Before us, the learned counsel for the assessee pleaded that the assessee has no unsecured loans towards the year end, i.e., 31st March, 1994, and so, no disallowance out of the interest paid is called for. It is also argued that the aggregate advances to the above three sister concerns have come down from ₹ 36,30,411 as on 31st March, 1993, to ₹ 13,07,057 on 31st March, 1994. 4. We agree with the findings of the CIT(A). We find that the above mentioned interest-free advances were made in the earlier years when the share capital of the assessee was only ₹ 15,00,000. The shareholders funds of ₹ 2,15,93,870 as on 31st March, 1994, represent mainly the accretion by way of capital gains on the sale of a flat during the year of account relevant for the assessment year 1994-95. As the advances were made in the earlier years and as in those two years they were made only out of borrowed funds, we have to sustain the addition of ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,500 (b)Brokerage Paid to Laljee Thakkar Co. by account-payee cheques as under : on 27-1-1994 2,00,000 8,18,000 on 08-2-1994 2,09,000 10,44,500 on 22-3-1994 4,09,000 3,79,55,500 Less : Improved cost of acquisition as per cost-inflation index Fair market value as at 1-4-1981 Multiplied By cost inflation index of 1993-94 Divided By cost inflation index of 1981-82 (Since property purchased before 1-4-1981) Fair market value as per valuation report dated 26-2-1994 of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Appeal of Patel India (P.) Ltd. for the assessment year 1994-95. 2. That in the course of hearing, an oral plea for sending the appeal back to the Assessing Officer for reference to the Valuation Cell was made. 3. That from the reading of the CIT(A), XL, Mumbai, Order, the honourable CIT(A) did not consider this plea and has not given any reasons for not referring the case back to the Assessing Officer. Solemnly affirmed and declared This 28th May, 1998. It is pleaded that under the provisions of section 55 it is mandatory for the Assessing Officer to have made the reference to the valuation officer and as he has not made the reference, the fair market value worked out by him is vitiated and it is not valid in law. In this context, reliance is placed upon the Circular No. 96, dated 25th November, 1972, of the CBDT, which explains the scope of section 55A and may be seen at p. 2126 of Chaturvedi Pithisaria Vol. 2, Fourth Edition, which reads as follows : 26. A new section 55A has been inserted in the Income-tax Act enabling the ITO to refer the valuation of any capital asset to the Valuation Officer with a view to ascertaining the market value of such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he land value would work out to a ridiculously low figure. So, it is requested that in the interest of justice, the property in question should be got valued by the Valuation Cell. 9. The learned Departmental Representative on the other hand, pleaded that there is no evidence of understatement of sale consideration in the sale instances cited by the Assessing Officer and so, the assessee should not be allowed to take such a plea. It is also pleaded that the sale instances quoted by the Assessing Officer are much nearer in time and location to the property in question sold by the assessee and as such, the Assessing Officer was justified in working out the fair market value as on 1st April, 1981, on the basis of the sale instances gathered by him. 10. We are of the view that the matter deserves to be sent to the valuation cell for working out the fair market value as on 1st April, 1981. However, we make it clear that we do not agree with the argument of the learned counsel for the assessee that such a reference under section 55A of the Act is mandatory. The decision of the Hon ble Punjab Haryana High Court in the case of Raj Paul Oswal v. CIT cited (supra) by the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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