2015 (10) TMI 1865 - AT - Income Tax

Reference made under section 55A to the DVO - addition on account of long term capital gain from the sale of plot - CIT(A) deleted the addition holding that the reference made to the DVO was without jurisdiction - Held that - Similar issue came up before the Tribunal in the case of DCIT vs. Shri Dipakbhai Shankarlal Contractor, husband and co-owner of the same property. The Tribunal, wherein held that ld. CIT(A) while granting the relief to the assessee had relied on the decision of Hiraben Jayantilal Shah vs. ITO (2008 (4) TMI 292 - GUJARAT HIGH COURT) and had held that the ratio of the aforesaid decision was directly applicable to the case of Assessee. Before us, Revenue has not brought any contrary binding decision nor could controvert the findings of ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) and thus the ground of Revenue is dismissed. Therefore, following the above order of the Tribunal, we observed that ld. CIT(A) has rightly deleted the addition. - Decided in favour of assessee.

Summary

Issues:
1. Jurisdiction of Assessing Officer under section 55A for valuation of property leading to addition of long-term capital gain.

Analysis:

Issue 1: Jurisdiction of Assessing Officer under section 55A for valuation of property leading to addition of long-term capital gain

The appeal pertains to the Revenue challenging the order of ld. CIT(A) for AY 2007-08 regarding the addition of long-term capital gain from the sale of a plot. The Revenue contended that the reference made by the Assessing Officer to the District Valuation Officer (DVO) under section 55A was within jurisdiction, disputing the deletion of the addition amounting to Rs. 70,16,582. The property in question was inherited by the assessee and her husband, and the valuation as on 1.4.1981 was crucial for determining the cost of acquisition. The DVO's report led to the impugned addition. However, the CIT(A) relied on the decision of the Jurisdictional High Court in a similar case and deleted the addition, emphasizing that the value declared by the appellant was supported by a registered valuer's estimate, rendering the reference to the DVO unnecessary. The Tribunal upheld the CIT(A)'s decision, citing the identical facts with a previous case, where the Tribunal dismissed the Revenue's appeal based on the High Court's decision. The Tribunal found no reason to interfere with the CIT(A)'s order and dismissed the Revenue's appeal, affirming the deletion of the addition.

In conclusion, the Tribunal upheld the CIT(A)'s decision to delete the addition of long-term capital gain, emphasizing that the Assessing Officer's reference to the DVO under section 55A was without jurisdiction as the value declared by the appellant was supported by a registered valuer's estimate, in line with the decision of the Jurisdictional High Court.