TMI Blog2016 (5) TMI 1554X X X X Extracts X X X X X X X X Extracts X X X X ..... overlooking the legal position that the DVO s report cannot be treated as sacrosanct and it is amenable to adjustment, if the assessee is able to raise proper objections. In the instant case, the assessee has relied upon various orders of the ITAT to indicate that the value determined should be based upon a sale instance which should be proximate to the date of actual sale. The assessee has also raised an objection with regard to the increase in sale instance rate by 2% per month, but even till date, Revenue could not point out as to what is the sanctity of that method being followed by the DVO. We are of the view that the DVO completely failed in his duty to appropriately make the valuation. Even if sale instance rate is taken into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Departmental Valuation Officer so as to determine the appropriate value of the property. Accordingly, the Assessing Officer referred the matter to the DVO, who in turn, determined the value of the property at ₹ 55,22,000. It may be noticed that the sale by the assessee took place on 1.11.2004, whereas the DVO relied upon a sale instance dated 20.2.2004, i.e. approximately nine months prior to the date of sale in assessee s case. Assessee filed objections before the DVO on the ground that for determination of the market value, he should have taken into consideration sale instances which is proximate to the actual date of sale. In other words, sale instance which is more than six months prior to the actual date of sale should not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the assessee submitted that increase of 16% escalation is not based on any rule of valuation. 4. The Assessing Officer observed that the DVO considered this very explanation, and he is competent in the matter of valuation, and hence, he is duty bound to adopt the value determined by the DVO and accordingly proceeded to determine the income in the proceedings under S.143(3) read with S.254 of the Act. 5. Aggrieved, assessee challenged in appeal before the CIT(A) that the Chennai Bench of the Tribunal merely remanded the matter to the Assessing Officer for recomputing the long term capital gains after making reference to the DVO; It implies that the assessee has a right to challenge the mode of determination of value by the DVO. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht grounds in total in the Grounds of Appeal annexed to Form 36, ground No.8 is general in nature and ground No.7 is not contested, since no evidence could be placed in support of its contention, and thus, the only issue that remains to be considered is as to whether the value of the property determined by the DVO and adopted by the Assessing Officer is based on the established principles of valuation or not. 7. Learned counsel for the assessee submitted that though the DVO has stated that 2% increase per month is as per rules, nowhere the so called rule was mentioned and even the Assessing Officer and the CIT(A) could not lay their hands on the said rule, despite the fact that the assessee has strongly challenged the action of the DVO b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able instance of sale which has happened 7 to 8 months after the date of sale of the property. Learned counsel submitted that the same rule applies here also, as the DVO has taken into consideration a sale instance which was approximately nine months prior to the date of actual sale of the property by the assessee. Added to that, the DVO increased the value at the rate of 2% from February, 2004 to 1.11.2004, which is stated to be as per the principles of valuation, but no such rule was furnished either by him or by the Assessing Officer. In fact, the CIT(A) had not even considered that aspect, since he was of the view that the value adopted by the DVO being based on the direction of the ITAT, he cannot interference. Learned counsel submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment, while applying cost inflation index method, does not adopt 24% per annum towards escalation in price, and hence, to our mind, the method adopted by the DVO and the Assessing Officer has no basis particularly when the method adopted was not substantiated by furnishing any rule. The very fact that the Assessing Officer has called upon the assessee to raise his objections presuppose that the Assessing Officer is not bound by the DVO s report and he has got a duty to redetermine the value, but the Assessing Officer chose to proceed as if he is bound by the DVO s report, which speaks of itself. On the top of it, the learned Commissioner- (Appeals) was of the opinion that the ITAT. Chennai Bench has directed the Assessing Officer to adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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