9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (6) TMI 691 - AT - Income TaxAddition based on report of the district valuation officer (DVO) u/s 55A(a)(ii) - valuation of property done by DVO was much less than that shown by assessee - whether assessee has adopted higher fair value as on 01.04.1981 to pay the lesser capital gain - validation of reference made by the Assessing Officer to the DVO for the valuation of the property - conflicting decisions - Held that - As decided in the case of Sundeep Kumar Bafna v. State of Maharashtra 2015 (8) TMI 724 - SUPREME COURT a decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a co- equal or larger Bench and when High Courts encounter two or more mutually irreconcilable decisions of the Supreme Court cited at the Bar, the inviolable recourse is to apply the earliest view as the succeeding ones would fall in the category of per incuriam. ROYAL CALCUTTA TURF CLUB VERSUS DEPUTY COMMISSIONER OF INCOME-TAX AND VICE VERSA 2017 (11) TMI 1200 - ITAT KOLKATA followed Valuation of land done by the assessee s registered valuer is more than the value determined by the DVO therefore, valuation determined by DVO cannot be accepted since the assessee s case under consideration is prior to 1st July 2012 i.e. belonging to Assessment Year 2011-12, whereas the mandated provisions come into effect from Assessment Year 2013-14, therefore, it is against the provisions of section 55A(a) of the Act and hence, the valuation determined by the DVO cannot be accepted. We note that assessee s case under consideration is squarely falls u/s 55A(a) of the Act. As decided in CIT vs. Pooja Prints 2014 (1) TMI 764 - BOMBAY HIGH COURT where in it was held that neither section 55(A)(b)(ii) nor the amended section 55(A)(a) can be invoked for referring case of the appellant for valuation of an asset as on 01.04.1981, as the amendment was effective from 01.07.2012 and not retrospectively. - Decided in favour of assessee.
Issues Involved:
1. Validity of the reference made by the Assessing Officer (AO) to the District Valuation Officer (DVO) under Section 55A of the Income Tax Act, 1961. 2. Whether the valuation of the property as on 01.04.1981 determined by the DVO should be accepted over the valuation provided by the assessee's registered valuer. 3. Applicability of the amended provisions of Section 55A(a) of the Income Tax Act, 1961, effective from 1st July 2012. Detailed Analysis: Issue 1: Validity of the Reference to DVO under Section 55A The primary contention revolves around whether the AO's reference to the DVO for the valuation of the property as on 01.04.1981 was valid. The AO referred the matter to the DVO under Section 55A(b)(ii) of the Income Tax Act, arguing that the nature of the asset and other relevant circumstances necessitated such a reference. The assessee contended that the reference was without jurisdiction, as the AO could only make such a reference if the value claimed by the assessee was less than the fair market value, which was not the case here. The Tribunal noted that prior to the amendment effective from 1st July 2012, Section 55A(a) allowed the AO to refer the valuation of a capital asset to a Valuation Officer only if the value claimed by the assessee was less than its fair market value. Since the valuation claimed by the assessee was higher than the fair market value determined by the DVO, the reference made by the AO was deemed invalid. Issue 2: Acceptance of Valuation by DVO vs. Registered Valuer The AO had rejected the valuation of ?4,31,30,000/- provided by the assessee's registered valuer and adopted the DVO's valuation of ?1,98,53,912/-. The CIT(A) found that the AO's reference to the DVO was without proper jurisdiction and directed the deletion of the addition of ?16,54,92,985/-. The Tribunal upheld the CIT(A)'s decision, emphasizing that the AO could not refer the case to the DVO when the value claimed by the assessee was more than the fair market value determined by the DVO. The Tribunal also considered the judgment of the Hon'ble Bombay High Court in the case of CIT vs. Pooja Prints, which held that neither Section 55A(b)(ii) nor the amended Section 55A(a) could be invoked for referring the valuation of an asset as on 01.04.1981 if the AO believed the value claimed by the assessee was more than the fair market value. Issue 3: Applicability of Amended Provisions of Section 55A(a) The amendment to Section 55A(a) effective from 1st July 2012, which allowed the AO to refer a valuation if it was "at variance with its fair market value," was not applicable to the assessment year in question (2011-12). The Tribunal held that the provisions applicable prior to the amendment were relevant, and under those provisions, the AO could not refer the valuation to the DVO if the value claimed by the assessee was more than the fair market value. Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s order that the AO's reference to the DVO was invalid and that the valuation provided by the assessee's registered valuer should be accepted. The Tribunal emphasized that the AO could not invoke Section 55A(b)(ii) without first determining that Section 55A(a) was not applicable, which was not done in this case. The decision was supported by precedents from the Hon'ble Bombay High Court and the Hon'ble Calcutta High Court, which reinforced the Tribunal's stance on the invalidity of the reference to the DVO under the circumstances presented.
|
