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TMI Blog2018 (7) TMI 2029X X X X Extracts X X X X X X X X Extracts X X X X ..... ds relates with a single issue hence, being considered together. During the year under consideration, the assessee along with others have sold an immovable property admeasuring 9207 sq. meter ( assessee`s 1/6th share 1534.50 sq. meter ) situated at Moje Kansad Taluka for Rs. 51,63,265 on 16.03.2010 for total consideration of which fair market value was determined at Rs. 1,74,012 ( @ 18.90 x 9207) by the DVO as against the value determined by the assessees`s Valuer at Rs. 7,36,560. Accordingly the AO considered the long-term capital gain at 6,77,207 [Rs. 8,60,500 less index cost at Rs. 1,83,293 ( 29002*632/100)] and after reducing the long-term capital gain at Rs. 84,657 disclosed by the assessee made net addition of Rs. 5,92,550 as long-term capital gain. 4. Being dissatisfied, the assessee preferred an appeal before the Commissioner of Income tax (Appeals). It was explained that the sale price of land was at Rs. 51.63 Lakh as against which valuation of land as per Valuer of the assessee as on 01.04.1981 comes to Rs. 7,36,560 @ 80 per sq. meter of 9207 sq. meter in which assessee`s share comes to Rs. 1,22,760 (1/6th ) However, the AVO vide his report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land as on 01.04.1981 at @ 18.90 per sq. meter instead of @ Rs. 80 per sq. meter considered by the assessee based on Registered Valuer report. It was further submitted that the AO cannot refer to valuation where property is sold before 01.07.2012 as the amendment under section 55A is effective from 01.07.2012. The fair market value of property is less as laid down in the case of CIT v. Puja Prints [2014] 360 ITR 697 (Bom) , CIT v. Daulal Mohta (HUF) [2014] 360 ITR 680 (Bom) and Hon'ble Gujarat High Court in the case of CIT v. Gauragiben S Shodhan[2014] 108 DTR 442 (Gujarat) wherein it was held that Coming to the question of reference to DVO for ascertaining the fair market value as on 1st April, 1981 also, such reference was not competent. Prior to the amendment in section 55A with effect from 1st July, 2012 in a case, the value of the asset claimed by the assessee is in accordance with the estimate made by the registered valuer, if the AO was of the opinion that the value so claimed was less than its fair market value as on 1st April, 1981. It would not be the case of the AO that the value of the asset shown as on 1st April, 1981 was less than the fair market val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air market value of land as on 1st April, 1981 as per the provisions of section 55(2)(b)(i) of the Act. Assessee adopted fair market value at Rs. 7,36,560 based on valuation report of Government approved registered valuer. Assessing Officer after not accepting the claim of assessee referred the matter to DVO u/s.55A(b)(ii) for ascertaining fair market value of land as on 05.09.2014. After obtaining DVO report, Assessing Officer rejected the fair market value adopted by assessee and completed assessment u/s.143(3) of the Act estimating the fair market value as on 01.04.1981 at 1,74,012. Assessing Officer has referred the valuation to the DVO u/s.55A(b)(ii), for the sake of convenience the provision of Section 55A of the Act reds as under: "55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer - (a) In a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion ;that the value so claimed is less than its fair market value; (b) in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This issue, in our considered opinion, is covered in favour of the assessee and against the Revenue by the judgment in the case of Rubab M.Kazerani reported in 91 ITD 429 (Mum(TM). Further the assessee also covered by the Third Member decision of the Pune Bench of the Tribunal, the case of Krishnabhai Tingore Vs.ITO reported in 101 ITD 317 (Pune) (TM) wherein it has been held that reference to DVO can only be made in cases where the value of capital asset shown by the assessee is less than its fair market value of land as on 1st April, 1981 shown by the assessee on the basis of approved valuer's report being more than its fair market value, reference under S.55A was not valid. Respectfully following the propositions laid down these two cases by the coordinate benches we uphold the contention of the assessee and hold that the reference made by the Assessing Officer to the DVO u/s 55A in the peculiar facts and circumstances of the case is bad in law. Thus, on the sole grounds of appeal of the assessee has to be allowed. 10. Further, where the fair market value of property is shown more than the Fair Market Value, the AO cannot refer the same to valuation relating to asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, which in turn, is based on the report of the approved Valuer.". Therefore, The AO was not justified in referring to DVO for valuation as on 01.04.1981. Similarly, the Mumbai Tribunal in the case of Pradeep G. Vora 58 taxmann.com 110 (Mum-Trib) / [2015] 154 ITD 118 (Mum) has observed in para 4.2 as " 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 than 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 VO only if the value declared by the assessee is in the opinion of AO less than its fair market value." 12. Thus, the contention of the Learned Departmental Representative that reference was ma ..... 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