TMI Blog2021 (6) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the amendment made in the statute is not applicable on the transaction dated 04.06.2012, therefore, the reference made by the AO was invalid. We further find that the ground of appeal raised by the assessee is squarely covered by the decision of Tribunal in Ranchodbhai C. Patel [ 2020 (12) TMI 171 - ITAT AHMEDABAD] wherein on transaction of sale of land prior to 01.07.2012, the assessee in that case was allowed similar relief by the Tribunal, by following the decision of Jurisdictional High Court in CIT Vs Gauranginiben S Sodhan [ 2014 (2) TMI 78 - GUJARAT HIGH COURT] and Hon ble Bombay High Court in CIT Vs. Pooja Prints [ 2014 (1) TMI 764 - BOMBAY HIGH COURT] Without going into the merits of the basis of valuation so adopted by the registered valuer and subsequently by the department s valuation officer, in absence of a valid reference to the valuation officer, the addition so made under the head long term capital gains so far as it relates to cost of acquisition as substituted by fair market value as on 1.4.1981 is directed to be deleted. In the result, the appeal of the assessee is allowed - ITA No.1584/AHD/2017, ITA No.218/SRT/2017 - - - Dated:- 21-6-2021 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reply dated 28.03.2016. In the reply, the assessee contended that the report of Government Registered Valuer, Shri K.O. Shah is based on the location of property. The property of assessee is situated nearby Railway Station and Diamond Market and having high potential value. The assessee also opposed to the application of rate suggested by DVO. The reply of assessee was not accepted by AO. The AO adopted the market value suggested by DVO @ ₹ 550/- per Sq Mtr and determined the LTCG at ₹ 94,37,095/- against the capital gain determined by assessee at ₹ 86,84,145/- thereby added a value of LTCG of ₹ 7,52,950/- to the income of assessee. On appeal before the ld. CIT(A), the assessee made similar submission. The submission of assessee is recorded in para-5 of the order of ld. CIT(A). The ld. CIT(A) also accepted the value suggested by DVO and confirmed the addition. Further, aggrieved, the assessee has filed the present appeal before this Tribunal. 3. We have heard the submission of ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The ld. AR of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of AO by taking view that DVO has taken sale instances of four properties and taken into account the other factors like land rates, size of land, shape, situation, location, utility and future potential. The ld. CIT(A) further held that to arrive at a value of land, the comparable sale instances are only method of valuation as per Central Public Works Department s Manual, the registered valuer has ignored the basis guidelines in arriving the value of property and discussed the relevant factors for adopting rate of land as on 01.04.1981. We find that the assessee sold piece of land on 04.06.2012. There is no dispute about the date of transaction. We are conscious of the fact the amendment to section 55A(a) i.e. substitution of the word is at variance with the Fair Market Value were inserted in the Income Tax Act w.e.f 01.07.2012 and the same is not applicable retrospectively. Thus, in our considered view the amended provisions of section 55A is not applicable to the facts of the present case. Since the amendment made in the statute is not applicable on the transaction dated 04.06.2012, therefore, the reference made by the AO was invalid. 6. We further find that the ground o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation.-In this section, Valuation Officer has the same meaning, as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). 14. The aforesaid provisions are as amended by the Finance Act, 2012 with effect from 1.07.2012 wherein in clause (a), for is less than its fair market value was substituted for at variance with its fair value . As per the Revenue, the amended provisions of section 55A(a) are applicable for the impugned assessment year 2012-13 and the Assessing officer was well within his jurisdiction to refer the matter to the valuation officer. The assessee s contention is that unamended provisions of section 55A(a) are relevant for the impugned assessment year 2012-13 and the Assessing officer was not having the jurisdiction to refer the matter to the valuation officer. 15. In order to resolve the controversy, let s examine the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case, the Assessing officer has invoked the amended provisions and has held that the value so claimed by the assessee is at variance with its fair market value. The contention of the assessee is that the amended provisions have only been brought on the statue books w.e.f 1.07.2012 and the same cannot be invoked in the instant case and therefore, the AO lacks the necessary jurisdiction to refer the matter to the valuation officer. 16. The question is how one should read the amendment in section 55A(a) which has been brought on the statue books w.e.f 1.07.2012. Whether we should read the amendment in the context of transactions which have happened on or after 1.07.2012 and which are liable for capital gains tax and therefore, satisfying the initial condition of reference for the purposes of this chapter to the valuation officer. Alternatively, irrespective of period to which the transaction pertains, where the assessment proceedings are initiated by the Assessing officer or pending before the Assessing officer on or after 1.07.2012, given that the Assessing officer has to form an opinion during the course of assessment proceedings, the amended provisions will appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of CIT vs. Puja Prints [2014] 224 Taxman 22 (Bom) wherein it was held that the Parliament has not given retrospective effect to the amendment and the law to be applied is as existing during the period relevant to the Assessment Year 2006-07. The findings of the Hon ble High Court are as under:- 6. We have considered the rival submissions. We find that the impugned order dated 18 February, 2011 allowing the respondent assessee's appeal holding that no reference to the Departmental Valuation Officer can be made under Section 55A of the Act, only follows the decision of this Court in the matter of Daulal Mohta HUF (supra). The revenue has not been able to point out how the aforesaid decision is inapplicable to the present facts nor has the revenue pointed out that the decision in Daulal Mohta HUF (supra) has not been accepted by the revenue. On the aforesaid ground alone, this appeal need not be entertained. However, as submissions were made on merits, we have independently examined the same. 7. We find that Section 55A(a) of the Act very clearly at the relevant time provided that a reference could be made to the Departmental Valuation Officer only when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention of the revenue that the Assessing Officer is entitled to refer the issue of valuation of the property to the Departmental Valuation Officer in exercise of its power under Sections 131, 133(6) and 142(2) of the Act is entirely based upon the decision of the Guwahati High Court in Smt. Amiya Bala Paul (supra). However, the Apex Court in Smt. Amiya Bala Paul (supra) has reversed the decision of the Guwahati High Court and held that if the power to refer any dispute with regard to the valuation of the property was already available under Sections 131(1), 136(6) and 142(2) of the Act, there was no need to specifically empower the Assessing Officer to do so in circumstances specified under Section 55A of the Act. It further held that when a specific provision under which the reference can be made to the Departmental Valuation Officer is available, there is no occasion for the Assessing Officer to invoke the general powers of enquiry. In view of the above and particularly in view of clear provisions of law as existing during the period relevant to Assessment Year 2006-07, we are of the view that questions (a) and (b) do not raise any substantial question of law. 18. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. In the present case, admittedly the assessee had relied on the estimate made by the Registered Valuer for the purpose of supporting its value of the asset. Any such situation would be governed by clause (a) of section 55A of the Act and the Assessing Officer could not have resorted to clause (b) thereof as held by the Division Bench of this Court in the case of Hiaben Jayantilal Shah v. ITO [2009] 310 ITR 31/181 Taxman 191 (Guj.). In the said decision, it was held and observed as under:- 10. Under clause(a) of sec. 55A of the Act under the Assessing officer is entitled to make the reference to the Valuation Officer in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by the Registered Valuer, if the Assessing Officer is of the opinion that the value so claimed is less than the fair market value. In any other case, as provided under clause(b) of Sec. 55A of the Act, the Assessing Officer has to record an opinion that (i) the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage or by more than such an amount as may be prescribed; or (ii) having regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 and not applicable to Assessment Year 2012-13. 25. In light of above discussions, if the facts of the present case are examined, the transaction of sale of land has taken place during the financial year 2011-12 relevant to Assessment year 2012-13, therefore, the amended provisions of section 55A(a) would not be applicable and one shall be guided by the erstwhile provisions of section 55A(a) of the Act. 26. In order to refer the matter to the valuation officer as per erstwhile provisions of section 55A(a), in the instant case, there is no dispute that the liability towards the capital gains has arisen during the year as the transfer of the land has happened during the year. There is also no dispute that cost of acquisition as substituted by the assessee with fair market value as on 1.4.1981 is based on and in accordance with the estimate made by the registered valuer. The third condition is that the Assessing Officer should form an opinion that the value so claimed by the assessee is less than its fair market value. Therefore, only in a scenario, the value so claimed by the assessee is less than its fair market value in the opinion of the Assessing officer, the matter can b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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