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Issues involved: Challenge to impugned order of Ld. CIT -30, Mumbai for A.Y. 2005-06 regarding reference to DVO for determining Fair Market Value (FMV) of property as on 01.04.1981.
Summary: Issue 1: Reference to DVO for FMV valuation The assessee challenged the order of Ld. CIT -30, Mumbai for A.Y. 2005-06 regarding the reference made by the A.O. to the Valuation Officer u/s.55A for determining the FMV of the property as on 01.04.1981. The A.O. was not satisfied with the valuation adopted by the assessee and referred the matter to the DVO. The DVO's report valued the property at a different amount than declared by the assessee. The A.O. used this valuation to calculate capital gains. The issue was whether the A.O. had the authority to make such a reference. The Ld. Counsel argued that for A.Y. 2005-06, there was no provision in sec.55A to refer the valuation to find out if the assessee declared more value of the property. Citing a case law, it was contended that the A.O. could only make a reference if the declared value was lesser. The Tribunal found that the issue was covered in favor of the assessee by a decision of the Hon'ble High Court of Bombay, which held that the A.O. did not have the authority to refer the valuation to the DVO to find out if the assessee declared excess FMV. Therefore, the Tribunal directed the A.O. to accept the valuation declared by the assessee for the cost of acquisition. In conclusion, the Tribunal allowed the assessee's appeal, holding that the A.O.'s reference to the Valuation Officer u/s.55A for FMV valuation was without jurisdiction, based on the decision of the Hon'ble High Court of Bombay. Order pronounced in the open court on 28th May, 2012.
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