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Nirmal Kumar Ravindra Kumar – HUF Versus Commissioner of Income Tax & Another

2016 (6) TMI 492 - CALCUTTA HIGH COURT

Evaluation of the property under section 55A(a) as the fair market value estimated by the registered valuer engaged by the assessee is higher than the actual fair market value - reference to DVO - Held that:- Policy of law is to take the fair market value as on 1st April, 1981 as the basis for the purpose of indexation. If the assessee has shown more than the fair market value he obviously, is interested in increasing the index cost for the purpose of avoiding to pay capital gains. Therefore, th .....

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, 1981. The reference made by the Assessing Officer was competent. The learned Tribunal was correct in holding that the clause (b)(ii) to section 55A carries a broader spectrum which certainly empowers the Assessing Officer to make reference to the DVO wherein in his opinion the fair market value estimated by the assessee is not proper and since in the present case the reference has been made by the Assessing Officer u/s.55A(b)(ii) of the Act, in our considered opinion such action of Assessing O .....

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A No. 293 of 2008 - Dated:- 9-6-2016 - Girish Chandra Gupta And Asha Arora, JJ. For the Revenue : Mr. P. K. Bhowmik, Advocate Mrs. Jyotsna Roy Mukherjee, Advocate ORDER The Court : This appeal is directed against a judgement and order dated 28th December, 2007 passed by the learned Income Tax Appellate Tribunal, D Bench, Kolkata in I.T.A.NO.1006/Kol/2006 and Crossobjection No.57/Kol/2006. The appeal was preferred by the Revenue and the Cross-objection was filed by the assessee both pertaining to .....

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of a special Bench of the Tribunal. II. Whether on the facts and in the circumstances of the case the order of the Tribunal was perverse on the question of legality of reference under Section 55A of the Income Tax Act, 1961 having been passed in total disregard of principles of legal precedents ? The factual background behind the controversy is to be found in paragraph-4 of the impugned judgement which reads as follows : Brief facts are that the assessee did not file its return of income for ass .....

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377; 97,50,000/-. Such property was purchased by the assessee on 31.7.1979 at a purchase price of ₹ 2,80,882/-. However, while calculating the long term capital gain the assessee adopted the market value of the property at ₹ 34,55,000/- as on 1.4.1981. The Assessing Officer considered such estimation of fair market value at a higher side and referred the matter to DVO who vide his report dated 3.2.2005 computed the fair market value of the property at ₹ 3,77,250/- and computed .....

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e clause (b)(ii) to section 55A which mentions the power of Assessing Officer to make a reference having regard to the nature of the assets and other relevant circumstances. In our considered opinion, such clause carries a broader spectrum which certainly empowers the Assessing Officer to make reference to the DVO wherein in his opinion the fair market value estimated by the assessee is not proper and since in the present case the reference has been made by the Assessing Officer u/s.55A(b)(ii) o .....

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l permissible under the law and, therefore, we do not see any infirmity in the order of the Ld.CIT(A) in upholding such action of Assessing Officer in making reference to DVO. We, therefore, uphold his order and reject the ground raised by the assessee. When the appeal was taken up for hearing, Mr. Ananda Sen, learned advocate submitted that the appellant has disengaged him. He is, therefore, no longer in the matter. When the appellant himself has disengaged the learned advocate on record and ha .....

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ue estimated by the registered valuer engaged by the assessee is higher than the actual fair market value. This contention is inherently incorrect. Policy of law is to take the fair market value as on 1st April, 1981 as the basis for the purpose of indexation. If the assessee has shown more than the fair market value he obviously, is interested in increasing the index cost for the purpose of avoiding to pay capital gains. Therefore, the practice adopted by him cannot be permitted. Even assuming .....

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