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TMI Blog2018 (8) TMI 1867X X X X Extracts X X X X X X X X Extracts X X X X ..... his own, Appellant prays for following the Value as per Regd. Valuers Report. 2. Without prejudice to Ground No.1 above, lower Authorities have erred in not referring the matter to "Valuation Officer‟ for arriving at FMV on 01/04/1981. 3. Appellant prays for adopting just and equitable FMV as of 01/04/1981 for computing Capital Gain. 4. CIT(A) has erred in not allowing deduction u/s 54F as claimed by the Appellant. 5. Appellant prays for just and equitable relief in computing Capital Gain as to FMV of 01/04/1981. Indexed and u/s 54F. 6. Appellant prays for cancellation / reduction of interest charged u/s 234B. 4. The issue raised in both the appeals is against adoption of Fair Market Value as on 01.04.1981 while computing income from capital gains. 5. The assessee moved an application for adjournment, which was refused in view of the issue being settled by the Hon'ble Bombay High Court. 6. Briefly, in the facts of the case, the assessee had filed return of income declaring total income of Rs. 1,51,500/-. The Assessing Officer noted from the information available on record that the assessee along with three other relatives had sold land to four different p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial claim of cost of acquisition and expenses with an intention to evade payment of tax. The claim made under section 54F of the Act was claimed to be not correct by the Assessing Officer. The assessee was show caused as to why the fair market value as on 01.04.1981 be not adopted at Rs. 10,000/- being sale instance of nearby area. The Assessing Officer rejecting the explanation of assessee held that cost of acquisition as on 01.04.1981 was to be adopted at Rs. 10,000/- per acre. He accordingly, re-worked the Income from Capital Gains in the hands of assessee. 7. The CIT(A) upheld the order of Assessing Officer. Further, the deduction claimed under section 54F of the Act was also not allowed to the assessee. 8. The assessee is in appeal against the orders of authorities below in not adopting the fair market value as on 01.04.1981 as per the report of registered Valuer. The assessee is also aggrieved by the order of Assessing Officer in not making reference to the DVO for getting the valuation report from the competent person and has objected to the order of Assessing Officer in adopting the value as on 01.04.1981 at Rs. 10,000/- per acre on his own motion. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment was made effective only from 1 July 2012. The 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. 9. 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 i.e. a case not covered by Section 55A(a) of the Act. In this case, it is an undisputable position that the issue is covered by Section 55A(a) of the Act. Therefore, resort cannot be had to the residuary clause provided in Section 55A(b)(ii) of the Act. In view of the above, the CBDT Circular dated 25 November 1972 can have no application in the face of the clear position in law. This is so as the understanding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after hearing both the learned Authorized Representatives, the preliminary issue which is raised by way of additional ground of appeal is a purely legal ground of appeal, which challenges the jurisdiction of the Assessing Officer in completing assessment both under sections 50C and 55A of the Act. In the facts of the case, the assessee had sold property at Amravati admeasuring 0 H 38R. The assessee had received her share in the said property as gift from her father and had sold one portion of the property much earlier. During the year under consideration, the assessee received total consideration of Rs. 87,21,000/- on sale of balance share in the property. On the other hand, the stamp duty authorities had adopted the valuation of said plot of land under section 50C of the Act at Rs. 1,07,31,000/-. The Assessing Officer during the course of assessment proceedings had made reference to the Valuation Officer under section 50C of the Act as the assessee had objected to the valuation made by the stamp valuation authorities. The Assessing Officer also referred to the Valuation Officer the cost of acquisition of land as per section 55A of the Act. The first objection raised by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect 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. 9. 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 i.e. a case not covered by Section 55A(a) of the Act. In this case, it is an undisputable position that the issue is covered by Section 55A(a) of the Act. Therefore, resort cannot be had to the residuary clause provided in Section 55A(b)(ii) of the Act. In view of the above, the CBDT Circular dated 25 November 1972 can have no application in the face of the clear position in law. This is so as the understanding of the statutory provisions by the revenue as found in Circular issued by the CBDT is not bindi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1981 at a figure lesser than the value declared by the assessee. Accordingly, the order of CIT(A) is reversed in this regard." 11. The year under appeal before the Tribunal is assessment year 2010-11 and in case the same simile is applied to the facts of the present case, the Assessing Officer is not empowered to adopt the fair market value of the said property at Rs. 10,000/- per acre. Accordingly, we reverse the order of CIT(A) in this regard and direct him to adopt the fair market value as on 01.04.1981 as declared by the assessee. 12. Now, coming to the second claim of assessee i.e. deduction under section 54F of the Act. In case the fair market value adopted at a figure shown by the assessee, then in case it is necessary to adjudicate the claim of deduction under section 54F of the Act, the Assessing Officer may provide reasonable opportunity of hearing to the assessee in this regard to furnish complete information and thereby decide the said issue. The grounds of appeal raised by the assessee are thus, allowed as indicated above. 13. The facts and issues in ITA No.1425/PUN/2017 are identical to the facts and issues in ITA No.1424/PUN/2017 and the decision in ITA No.1424 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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