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2017 (1) TMI 258 - AT - Income TaxReference to DVO u/s 55A - Computation of capital gain - fair market value of the property as on 01-04-1981 adopted - Held that - We do not find any infirmity in the order of Ld.CIT(A) on this issue since the issue squarely stands decided in favour of the assessee and against the revenue by the decision of the Hon ble Bombay High Court in the case of CIT Vs. Doulal Mohta (HUF) 2008 (9) TMI 890 - BOMBAY HIGH COURT wherein it has been held that reference to the departmental valuation officer can only be made in cases where the value of the capital asset shown by the assessee is less than its fair market value as on 01-04-1981. Where the value of the capital asset shown by the assessee on the basis of the approved valuer s report was more than its fair market value reference u/s.55A of the Act 1961 was not valid. Also see The Commissioner of Income Tax-13 Versus M/s. Puja Prints 2014 (1) TMI 764 - BOMBAY HIGH COURT - Decided against revenue
Issues:
- Validity of reference made by Assessing Officer to valuation officer under section 55A of the Income Tax Act. - Interpretation of section 55A(a) and its applicability when the value declared by the assessee exceeds the fair market value. - Impact of relevant case laws on the decision-making process. Analysis: Issue 1: Validity of Reference to Valuation Officer The case involved the Assessing Officer questioning the fair market value adopted by the assessee for a property in the assessment year 2007-08. The AO referred the matter to the Assistant Valuation Officer, leading to a challenge by the assessee before the CIT(A). The CIT(A) held that the AO was not justified in making the reference under section 55A of the Act as the value declared by the assessee exceeded the fair market value. The Tribunal upheld the CIT(A)'s decision, citing the decision of the Hon'ble Bombay High Court in a similar case, emphasizing that a reference to the valuation officer can only be made if the value declared by the assessee is less than the fair market value. Issue 2: Interpretation of Section 55A(a) The Tribunal analyzed the provisions of section 55A(a) of the Act and its application to cases where the value declared by the assessee is higher than the fair market value. Referring to the decision in CIT Vs. Puja Prints, the Tribunal reiterated that the reference to the valuation officer can only be made when the declared value is less than the fair market value. The Tribunal highlighted that the law applicable during the relevant assessment year did not support a reference when the declared value exceeded the fair market value, as clarified by the Hon'ble Bombay High Court's decision. Issue 3: Impact of Relevant Case Laws The Tribunal extensively discussed the impact of relevant case laws, including the decision in CIT Vs. Doulal Mohta (HUF) and CIT Vs. Puja Prints. These decisions guided the Tribunal in upholding the CIT(A)'s order and dismissing the revenue's appeal. The Tribunal emphasized that the law at the time of assessment did not allow for a reference to the valuation officer when the declared value exceeded the fair market value, as established by the precedents set by the Hon'ble High Court. In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision based on the interpretation of section 55A of the Income Tax Act and the application of relevant case laws. The judgment highlighted the importance of adhering to legal provisions and judicial precedents in determining the validity of references to valuation officers in cases of disputed fair market values.
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