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TMI Blog2014 (2) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... t justified in referring the matter of valuation to the Valuation Officer u/s.55A. Reasons assigned by him for doing the same are wrong and insufficient. 2.He has further erred in not considering the submission of the appellant that there is no provision in the Income Tax Act, 1961 which can justify the reference of the valuation as on 1.4.1981 when Valuation Report prepared by the registered valuer has already been filed by the assessee. 3.Regard being had to the fact that reference u/s.55A can be made to the DVO if A.O. is of the opinion having to the nature of asset and other relevant circumstance that it is necessary to do so. No circumstance having been specified on the basis of which he has framed his opinion to make reference, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he became the owner of the balance half property when his father renounced his interest in favour of the assessee on 20.03.2007,that the property was sold on 28.11.2007.The AO allowed indexation of the property relating to half portion inherited by the assessee on death of her mother from 1991-92 while remaining half portion of the property was indexed from AY. 2006-07 when his father had renounced his share in the impugned property in favour of the assessee. AO was of the view that period of holding by the mother was not to be taken into account while allowing the indexation. He referred to the provisions of Expl.(iii) to section 48 of the Act for working out the indexation. On the other hand, the assessee was of the view that the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect or not, that the error of the AO in referring the matter u/s.55A of the Act was merely a technical error, that much importance should not be given to the said technical mistake committed by him in referring the matter to the DVO u/s 55A of the Act instead of resorting to section 133(6)/131 of the Act. 2.1.a. He further held that the assessee had taken figure of Rs. 7.31lakhs as the cost of acquisition of the impugned property as on 01.04.1981,that the approved valuer of the assessee considered the cost of acquisition of the impugned property @Rs.100/-per sq.ft, that the VO had adopted the figure of Rs. 57/- per sq.ft. based on the contemporary reliable sale instances of land during the period close to 01.04.1981,that the approved val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property for a consideration of Rs. 2 crores. The assessee also claimed a deduction on account of brokerage of Rs. 5 lakhs and the indexed cost at Rs. 1.78 crores, on the basis of the value of the property being Rs. 35.99 Ink/is as on April 1, 1981. This valuation of Rs. 35.99 lakhs as a fair market value as on April 1,1981, of the property was on the basis of a valuation report. The Assessing Officer referred the issue of valuation to the Departmental Valuation Officer who valued the property at Rs. 6.68 lakhs as on April 1, 1981, and the indexed cost at Rs. 33.20 lakhs. Consequently, Assessing Officer enhanced the capital gains of the assessee from Rs. 11.20 lacs to Rs. 1.61 crores. The Commissioner (Appeals)held against the assessee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is at variance with its fair market value" was made effective only from July 1,2012. Parliament has not given retrospective effect to the amendment. Therefore, the law to be applied in the assessee's case was section 55A(a)as existing during the period relevant to the assessment year 2006-07. At the relevant time, very clearly reference could be made to the Departmental Valuation officer only if the value declared by the assessee was in the opinion of Assessing Officer less than its fair market value.(iii) That section 55A(b) states that it would apply in any other case, i.e., a case not covered by section 55A(a). There was no dispute that the issue was covered by section 55A(a). Therefore, recourse could not be had to the residuary clause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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