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TMI Blog2019 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate made by a registered valuer, is less than its fair market value? This is the substantial question of law to be answered in this appeal filed by the assessee. 2. The appellant/assessee had purchased 20.50 cents of land in the year 1975. On the same day, his son and wife had also purchased land comprised in the same survey number for the same price. The property purchased by them became capital asset on 06.01.1994. The appellant sold the aforesaid land on 19.01.2006. His son also sold the land, which was purchased by him in the year 1975, on the same day at the same rate of price. 3. The assessee filed return of income for the assessment year 2006-2007 on 18.07.2006 declaring his total income as Rs. 6,28,480/-. The return was accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority in adopting the same value as the cost of acquisition in respect of the land owned and sold by the assessee. Accordingly, the Tribunal dismissed the appeal. 6. We have heard Sri.S.Vijayan Nair, learned counsel for the appellant and also Sri.Christopher Abraham, learned Standing Counsel for the Income Tax Department. 7. Learned counsel for the appellant contended that when the Assessing Officer was of the opinion that the value of the capital asset estimated by the assessee on the basis of the report of a registered valuer was less than its fair market value, it was incumbent upon the Assessing Officer to make a reference under Section 55A of the Act to the Valuation Officer. Learned counsel would further contend that this Court had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee by more than such percentage of the value of the asset as so claimed or by more than such amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. ....... " 9. We may note that the words "is less than its fair market value" came to be substituted by Finance Act, 2012 with effect from 1.7.2012 by the words "is at variance with its fair market value". 10. Ascertaining the fair market value of a capital asset is the object of making reference to a Valuation Officer under Section 55A of the Act. It is only when the Assessing Officer is required to ascertain the fair market value of a capital asset, the provisions of Section 55A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax: (2007) 6 SCC 392, the Apex Court has held as follows: "Section 55A of the Act provides for reference to Valuation Officer. A bare perusal of the said provision will clearly go to show that the reference to a Valuation Officer is optional. The said provision is for the purpose of making an estimate. Such reference is made, if in the opinion of the Assessing Officer the value of the assets as claimed by the assessee in accordance with the estimate made by a registered valuer is less than its fair market value. Clause (b) of Section 55A refers to any other case which goes to show that the assessee had two options, namely, to get the value of the assets prepared through index value or take any other known mode of valuation." (emphasis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read the decision of this Court in the case filed by the son of the assessee. Learned counsel for the appellant has produced a copy of the judgment of this Court in the case I.T.Appeal No.94/2009 filed by the son of the assessee, for our perusal. On a perusal of this judgment, we find that this Court had not approved or disapproved the valuation of the capital asset made by the Assessing Officer in respect of the land owned and sold by the son of the assessee. In that case, the son of the assessee did not seek any reference under Section 55A of the Act at the first appellate stage. He raised such a contention only at the appellate tribunal stage and for that reason this Court did not interfere with the valuation of the capital asset made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Moreover, though the lands owned and sold by the assessee and his son were comprised in the same survey number, it is stated that the land owned and sold by the assessee was abutting the National Highway. Value of land may differ on the basis of its location. Even if a property is comprised in the same survey number, the portion of the property which abuts a road may fetch more price than the portion of the property which has got no such advantage. 18. On the basis of the discussion above, we find that in a case where the Assessing Officer is of the opinion that the value of the capital asset claimed by the assessee, on the basis of the estimate made by a registered valuer, is less than its fair market value, it is not mandatory for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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