2016 (9) TMI 1181 - AT - Income Tax

Reference to valuation officer - whether CIT(A) erred in referring the valuation of land to the Valuation Officer? - Held that - In the course of assessment proceedings, the assessee has filed valuation report supporting the value as on 01.04.1981 alongwith building which is disputed by the ld. Assessing Officer and calculated Long Term Capital Gains. Aggrieved by the order, the assessee filed an appeal before the ld. Commissioner of Income Tax (Appeals). In appellate proceedings, the ld. Commissioner of Income Tax (Appeals) dealt with judicial decisions of Tribunal and High Court and directed the ld. Assessing Officer to refer to the valuation officer. The Revenue is disputing the action of the ld. Commissioner of Income Tax (Appeals) in directing to valuation officer. The assessee claimed cost of acquisition as on 01.04.1981 based on the valuation report. The assessee has a option to adopt as per provisions of the Act which she has rightly followed. On combined reading of both provisions, the ld. Commissioner of Income Tax (Appeals) powers are co-terminus with the ld. Assessing Officer and within provisions of law on referring to the valuation officer. Hence, considering the provisions of law, material on record and judicial decisions, we are not inclined to interfere with the orders of the Commissioner of Income Tax (Appeals) who has dealt exhaustively on provisions and facts viz-a-viz explanation of the assessee and we dismiss the grounds of the Revenue.

Summary

Issues Involved:
- Valuation of land referred to Valuation Officer
- Distinction in case from Madras High Court decision
- Consideration of market value based on Sub-Registrar report
- Adoption of fair market value
- Dispute over referring the matter to valuation officer

Analysis:

Valuation of Land Referred to Valuation Officer:
The appeal was filed by the Department against the order of the Commissioner of Income-tax (Appeals) directing the valuation of land to the Valuation Officer. The Revenue contended that this action was against the law and the decision of the Jurisdictional High Court. The Commissioner of Income Tax (Appeals) relied on judicial decisions and directed the matter to the valuation officer, which the Revenue disputed.

Distinction in Case from Madras High Court Decision:
The Revenue argued that the case of the assessee was different from the decision of the Madras High Court in a specific case due to a distress sale of property. However, the Commissioner of Income Tax (Appeals) considered various arguments and judicial decisions, ultimately directing the matter to the valuation officer in accordance with the law.

Consideration of Market Value Based on Sub-Registrar Report:
The Assessing Officer adopted the value of the land as per the Sub-Registrar's report, while the assessee claimed a higher fair market value. The Commissioner of Income Tax (Appeals) referred to relevant provisions of the Income Tax Act and directed the matter to the valuation officer for fair market value determination.

Adoption of Fair Market Value:
The assessee adopted a fair market value for the property as on a specific date, which was disputed by the Assessing Officer. The Commissioner of Income Tax (Appeals) considered the arguments, judicial decisions, and the written submissions filed by the assessee before partially allowing the appeal and directing the matter to the valuation officer.

Dispute Over Referring the Matter to Valuation Officer:
The Revenue challenged the decision of the Commissioner of Income Tax (Appeals) in referring the matter to the valuation officer. However, after considering the provisions of the Income Tax Act, material on record, and judicial decisions, the Tribunal dismissed the grounds of the Revenue and upheld the Commissioner's decision.

In conclusion, the Tribunal dismissed the appeal of the Revenue, upholding the decision of the Commissioner of Income Tax (Appeals) to refer the valuation matter to the valuation officer in accordance with the provisions of the law and judicial decisions cited.