9911796707
TMI Blog2012 (5) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... also in the generation of power. It is regularly assessed to income tax under the Income Tax Act, 1961, hereinafter referred to as 'the Act'. Under a sale deed dated 10.04.2006, the petitioner sold the Okhla land which is situated at Mathura Road, Okhla, New Delhi. It was sold to M/s. S.S.P. Buildcon Pvt. Ltd. for a consideration of Rs. 1,40,20,00,000/-. The property had been taken on lease by the petitioner from Delhi Shimla Catholic Archdiocese under a lease agreement dated 24.04.1953 for a period of 99 years. By a deed of conveyance dated 12.02.1999, the residuary rights in the Okhla land were transferred in favour of the petitioner. In the income tax return filed by the petitioner in respect of the assessment year 2007-08, the petitioner declared capital gain on the sale of Okhla land. It appears that the date of acquisition of the property was taken as 12.02.1999 allegedly by mistake and, therefore, in the course of the assessment proceedings, the petitioner modified the claim by letter dated 18.11.2010. By virtue of the modification, the petitioner claimed that it had the option to take the fair market value of the Okhla land as on 01.04.1981 in the place of the original cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95,000/- declared by the petitioner, that the petitioner has filed the present writ petition. When notice was issued by this Court on 30.05.2011, an order was also passed that the valuation shall be completed by the District Valuation Officer, the first respondent herein but the same shall not be given effect to without leave of this Court. It appears that thereafter on 12.07.2011 the Assessing Officer had issued a notice under Section 148 of the Act, presumably on the basis of the report of the District Valuation Officer, but by order passed on 20.10.2011 the said notice was permitted to be withdrawn by this Court subject to the outcome of the writ petition. 6. The main contention urged on behalf of the petitioner is that the reference made to the District Valuation Officer is invalid once the assessment under Section 143(3) of the Act was completed on 29.12.2010 and thereafter the DVO cannot proceed with the same. In support of the contention, reliance is placed on the judgment of a Single Judge of the Calcutta High Court in Reliance Jute & Industries Ltd. v. Income-tax Officer, [1984] 150 ITR 643. It is consequently urged that the DVO's report, even if it has been prepared, wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Section 55A and also because proceedings for valuation are not maintainable once the assessment is framed. It is submitted that there was no material before the Assessing Officer on the basis of which he could have formed the opinion to invoke Section 55A. It is further submitted that the Assessing Officer has exercised the power in an arbitrary manner without having due regard to the legal provisions. It is further urged that there has been a mechanical presentation in the assessment order that the valuation report from the registered valuer, submitted by the petitioner before the Assessing Officer, was on the higher side. According to the petitioner, this is a subjective opinion of the Assessing Officer which is not within the contemplation of law. Reliance is placed on the judgment of the Supreme Court in ACIT v. Dhariya Construction Co., [2010] 328 ITR 515 and the judgment of Division Bench of this Court in CIT v. Smt. Suraj Devi, [2010] 328 ITR 604. 10. Section 55A of the Act reads as under: - "55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of capital asset to a Val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the registered valuer's report. This letter was filed about 1½ months before the date on which the assessment would have become barred by time. The Assessing Officer while examining the computation of the capital gains was of opinion that the figure of Rs. 21,72,95,000/- shown as the fair market value of the property as on 01.04.1981 was on the higher side and accordingly referred the matter to the DVO, Government Valuation Cell, New Delhi on 20.12.2010. In doing so, he was only exercising his power under Section 55A (b)(ii) of the Act under which he may refer the valuation to the DVO if he considers it necessary so to do, having regard to the nature of the asset and other relevant circumstances. The contention of the petitioner that the Assessing Officer had no basis to form the opinion is not acceptable. The original computation of the capital gains as per the return filed by the petitioner was Rs. 130.19 crores as seen from para 14.1 of the assessment order. After the revised computation/ modification of the capital gains was filed, the figure of capital gains came down drastically to Rs. 14,07,16,551/- there was thus a reduction of approximately Rs. 116 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that point of time that the Court may be called upon to examine the validity of the action taken by the revenue authorities. That stage has not yet arisen in the present case. It is in this behalf pointed out in the counter affidavit that the reference to the DVO does not become invalid on the completion of the assessment proceedings before the receipt of the valuation report and that after the receipt of the valuation report after completion of the assessment proceedings, the report would become part of the record which may enable the income tax authorities to take action as permissible under the Act, such as Section 147, Section 263, appellate power under Section 250 or Section 251 etc. It is not necessary to examine the contention of the petitioner that once the assessment proceedings are completed, the pending proceedings under Section 55A become infructuous or invalid or get automatically terminated. 13. The petitioner placed reliance on the judgment of the Supreme Court in ACIT v. Dhariya Construction Co. (supra) and the judgment of Division Bench of this Court in CIT v. Smt. Suraj Devi (supra). In these cases, it has been held that the reopening of an assessment under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e noticed that the judgment of this Court in Smt. Suraj Devi's case was not concerned with the validity of a reference made to the DVO under Section 55A of the Act for the purpose of estimating the fair market value of a property as on 01.04.1981 for computing the capital gains nor was the Court concerned with the validity of a reference made to the DVO under Section 55A, which was pending when the assessment order was passed (proceedings were completed). This judgment does not touch upon the point raised by the petitioner in the present writ petition. 14. In any case we do not think we would be justified in preventing the Assessing Officer from collecting evidence which may be used by him for the purpose of bringing what in his opinion is the proper amount of capital gains on the sale of Okhla land. As to how he proposes to use the evidence against the assessee is a matter of speculation which we refrain from indulging in. The petitioner would be at liberty to strain every nerve in opposing and challenging any action sought to be taken by the Assessing Officer or any other departmental authority under the Act, if and when such an action is taken. We say nothing about the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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