Section 39 - Amendment of section 254 - Finance Act, 1964

39. Amendment of section 254 In section 254 of the Income-tax Act, after sub-section (1), the following sub-section shall be inserted, namely:- '(1A) (a) Where the appellant objects to the fair market value of a capital asset adopted under section 52, the Appellate Tribunal may, and if the appellant so requires, shall, refer the question of the disputed value to the arbitration of two valuers one of whom shall be nominated by the appellant and the other by the respondent and the Appellate Tribunal shall, so far as that question is concerned, pass its orders under sub-section (1) conformably to the decision of the valuers: Provided that where the appellant or the respondent does not nominate any valuer within the time specified by the Appellate Tribunal or within such further time as the Appellate Tribunal may allow, the Appellate Tribunal may nominate a valuer on his behalf: Provided further that if there is a difference of opinion between the two valuers, the matter shall be referred to a third valuer nominated by agreement, or failing agreement, by the Appellate Tribunal and the decision of that valuer on the question of valuation shall be final. (b) The valuers to whom a reference under this sub-section has been made by the Appellate Tribunal shall communicate their decision to the Appellate Tribunal within six months of the date of such reference or within such further time as that Tribunal may allow: Provided that if the decision of the valuers is not communicated within the period aforesaid, the Appellate Tribunal may order that the reference made under tills sub-section shall be deemed to be withdrawn and proceed to dispose of the case on the evidence before it, including the report of either of the valuers if any such report has been submitted. (c) The extent to which the costs of arbitration proceedings (including a case where a reference is deemed to be withdrawn) shall be borne by the appellant or the respondent shall be at the discretion of the Appellate Tribunal. (d) The valuers may, in disposing of any matter referred to them for arbitration under this sub-section, hold or cause to be held such enquiry as they think fit and after giving the appellant and the respondent an opportunity of being heard, make such decision as they think fit and shall communicate such decision in writing to the Appellate Tribunal. (e) The valuers appointed under this sub-section, while acting as such, shall have all powers of a Civil Court while trying a suit under the Code of Civil Procedure, 1908 (5 of 1908) in respect of the following matters, namely:- (i) summoning and enforcing the attendance of any person and examining him on oath; (ii) requiring the discovery and production of documents; (iii) receiving evidence on affidavit; and (iv) issuing commission for examination of witnesses or documents. (f) Nothing in the Arbitration Act, 1940 (10 of 1940) shall apply to arbitrations under this sub-section. Explanation.- In this sub-section, valuer means a valuer appointed under section 4 of the Estate Duty Act, 1953 (34 of 1953).',