TMI Blog2014 (9) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... These are cross appeals. The first one is filed by the assessee and the second one filed by the Revenue and are directed against the order dated 03-01-2012 of the CIT(A)-III, Pune relating to Assessment Year 2008-09. For the sake of convenience, these were heard together and are being disposed of by this common order. 2. Facts of the case, in brief, are that the assessee is a dealer of paint and paints material. He filed his return of income on 31-07- 2008 declaring income of ₹ 2,82,98,616/-. During the course of assessment proceedings the Assessing Officer noted from the details furnished by the assessee that the assessee has sold vacant land during the year and declared long term capital gain of ₹ 2,61,82,796/- on the same, the details of which are as under : Sale Consideration ₹ 4,00,00,000 Less : 1. Cost of selling ₹ 8,26,854 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as supported his valuation through specific sale instance in Pimpri Chinchwad area. Both Katraj (where assessee's land is located) and Pimpri Chinchwad are in different directions from Pune. However, Pimpri Chinchwad area was commanding more value than Katraj, in view of industrial development. Shri Harshad Ruparel, Government approved valuer, has adopted the same value prevailing at Pimpri Chinchwad area for arriving at fair market value of land at Katraj, Therefore, the valuation of Sri Harshad Ruparel, Government approved valuer is found to be reasonable. ( iv) The contention of the assessee that the cost inflation index for 1989 is 172 and for 1981 it is 100. Therefore, same should be adopted for arriving at value of land as on 1981. Assessee's argument is not correct. Inflation index is a general index for all the commodities and for entire country. However, TP VD guidelines are solely specifically for property valuation and that too specifically for the specific area. Therefore, following TP VD guidelines for arriving at value of land as on 1981 is the most appropriate method. 2.2 The Assessing Officer, therefore, proceeded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not considered all these parameters. The various infirmities in the report of the DVO was also pointed out to the Ld.CIT(A). The assessee also challenged the DVO s reliance on the guidelines issued by the Town Planning Department which suggest that the rate as of 1981 should be reduced by 40% of the rates prescribed in 1989. It was argued that such a method has absolutely no basis and is devoid of any merits especially when the DVO accepts that the value differs from property to property depending upon several other parameters. Relying on various decisions the assessee submitted that the value adopted by him is fair and reasonable and the same should be accepted. 3.2 However, the Ld.CIT(A) was also not convinced with the arguments advanced by the assessee. After analysing the provisions of section 55A and referring to various decisions, the Ld.CIT(A) noted that there are conflicting decisions on the issue as to whether reference can be made to the DVO if the value adopted by the assessee is supported by the valuation report of a registered valuer and the value estimated by the registered valuer is not less than the fair market value of the property. Following the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters will determine the overall valuation of the land. He accordingly adopted ₹ 3,75,000/- per Hectare of land which is 5 times the Government rate of ₹ 75,000/- per Hectare as against ₹ 3 lakhs adopted by the Government approved valuer and the Assessing Officer. He accordingly directed the Assessing Officer to determine the fair market value as on 01-04-1981 which is as under : Land area = 10.15 Ha. Rate as discussed for year 1989 : ₹ 3,75,000/- per ha Total value as on 1989 = 10.15 X3,75,000 : ₹ 38,06,250 Value of land as on 1981 @40% : ₹ 15,22,500 Indexed COA : 551/100 X15,22,500 : ₹ 83,88,975 Thus, he determined the long term capital gain at ₹ 3,03,84,171/- which is as under : Sale Consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Town Planning and Valuation Department, 1989. 3. For these and such above other grounds as may be urged at the time of the hearing, the order of the learned CIT(Appeals) may be vacated and that of the Assessing Officer be restored. 4. The appellant craves, leave to add, amend, alter or delete any of the above ground of appeal during the course of the appellant proceedings before the ITAT . 5. The Ld. Counsel for the assessee at the outset strongly challenged the order of the CIT(A). He submitted that the Ld.CIT(A) having accepted the submission that the Assessing Officer has no power to make reference u/s.55A, nevertheless, held that the valuation made by the DVO can be considered for the purpose of deciding as to whether valuation made by the approved valuer and adopted by the assessee is fair and reasonable. He submitted that where the assessee s valuation is based on the report of an approved valuer and where such valuation is not found to be less than its fair market value, there is no question of referring to any other evidences including the report of the DVO. Referring to the decision of the Hon ble Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered valuer's valuation the Assessing Officer neither could make any reference to the DVO nor there would be any enquiry and examination even if the valuation report of the registered valuer was prima facie not correct. Refer- DCIT v/s Chaturbhuj Vallabhdas-130 ITD 230 - Mumbai Bench relevant Para 10. (Refer page No.28 to 31) v) It is further pertinent to be noted that CIT(A) has not found any vital defect in the valuation made by the approved valuer. Copy of the report is at Page No.21 to 59. It will be appreciated that approved valuer has taken into consideration minute details relating to the property under consideration and has taken support of several factors attached to the said property. Refer Page No.32 to 70. He accordingly submitted that the order of the CIT(A) bet set aside and the value adopted by the assessee be considered as correct. 6. The Ld. Departmental Representative on the other hand heavily relied on the order of the Assessing Officer. 7. We have considered the rival submissions made by both the sides, perused the orders of the Assessing Officer and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of section 55A(a) of the Act is not justified. The contention of the Revenue that in view of the amendment to section 55A(a) of the Act in 2012 by which the words is less then its fair market value is substituted by the words is at variance with its fair market value is clarifactory and should be given retrospective effect. This submission is in face of the fact that the 2012 amendment 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 present case is section 55A(a) of the Act as existing during the period relevant to the assessment year 2006-07. At the relevant time, very clearly reference could be made to Departmental Valuation Officer only if the value declared by the assessee is in the opinion of Assessing Officer less than its fair market value. The contention of the Revenue that the reference to the Departmental Valuation Officer by the Assessing Officer is sustainable in view of section 55A(a)(ii) of the Act is not acceptable. This is for the reason that section 55A(b) of the Act very clearly states that it would apply in any other case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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