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TMI Blog2013 (5) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted by the learned Counsel, AO lacks jurisdiction for referring the FMV under section 55A wherein the Valuation determined by the DVO is less than the FMV declared by assessee. See Smt. Sarla N. Sakraney v. ITO [2010 (7) TMI 832 - ITAT MUMBAI] & HIABEN JAYANTILAL SHAH Versus INCOME-TAX OFFICER AND ANOTHER [2008 (4) TMI 292 - GUJARAT HIGH COURT] wherein held reference by the Assessing Officer to the DVO under section 55A for valuation of FMV of the property as on 1-4-1981 is not valid for the reasons that FMV declared by the assessee as per Government registered valuer's report was more than the FMV as estimated by the DVO. Since determination of the FMV as on 1-4-1981 was based on the report of the DVO, the same is held to be invalid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale to the Departmental Valuation Officer. Since the report was not received by the time the assessment was completed, he left a note that the order will be modified under section 155 after receipt of the report. Accordingly, he has given an opportunity to assessee when the report was received, obtained assessee's objections vide letter dated 02.05.2009 and revised the capital gains working to Rs.54,30,860. In doing so, AO adopted the market value as on 09.12.2005 at Rs.1,68,85,645 as against Rs.1,26,00,000 adopted by assessee while computing his share. The market value as on 1.4.1981 was however, taken at Rs.5,21,913 as against Rs.6,25,590 taken by assessee. The matter was contested before the CIT (A) with reference to adoption of FMV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer. Therefore, Ground Nos. 1 2 are dismissed as withdrawn. 4. The learned Counsel submitted that assessee adopted the FMV on the basis of the valuation report obtained at Rs.6,25,590 whereas the D.V.O has reduced the FMV as on 01.04.1981 to Rs.5,21,913. It was his submission that AO has no jurisdiction to refer the valuation under section 55A on the reason that the FMV declared by assessee was more than the F M value estimated by the DVO. He relied on the decision of the Coordinate Bench in the case of Smt. Sarla N. Sakraney v. ITO [2011] 130 ITD 167. 5. The learned DR however, referred to the orders of the CIT (A) to submit that assessee has accepted the same before AO and therefore, the CIT (A) rejected assessee's contentions. In r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd Member decision in the case of Ms. Rubab M. Kazerani (supra) and the Hon'ble ITAT Pune decision in the case of Smt. Krishnabai Tingre (supra). Further reference was also made to the decision of Hon'ble Gujarat High Court in the case of Hiaben Jayantilal Shah (supra). It has to be mentioned here that there is a decision of ITAT Mumbai Bench in the case of Vijaykumar M. Shah v. Dy. Addl. CIT [2009] 29 SOT 338; wherein a contrary view was taken. In the said decision, Mumbai Bench of the Tribunal had taken a view that the Assessing Officer is empowered to make reference under sub-clause (ii) of section 55A(b), even in cases where FMV claimed by the assessee is higher than actual fair market value and that a reference can be made even where c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been held that reference to DVO can only be made in cases where the value of capital asset shown by the assessee is less than its fair market value of land as on 1st April, 1981 shown by the assessee on the basis of approved valuer's report being more than its fair market value, reference under section 35A was not valid. Respectfully following the propositions laid down these two cases by the coordinate Benches we uphold the contention of the assessee and hold that the reference made by the Assessing Officer to the DVO under section 55A in the peculiar facts and circumstances of the case is bad in law. Thus, on the sole grounds of appeal, of the assessee has to be allowed. Before passing, we have to mention that the assessee has sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the value so claimed is less than the fair market value. The estimated value proposed by the DVO is shown at Rs. 3,97,000, which is less than the fair market value shown by the assessee as on 1st April, 1981. Therefore, clause (a) of section 55A cannot be made applicable. Clause (b) of section 55A can be invoked only in any other case, namely when the value of the asset claimed by the assessee is not supported by an estimate made by a registered valuer . In the facts of the present case, clause (b) of section 55A also cannot be invoked. Therefore there is no question of having recourse to sub-clause (ii) of clause (b) of section 55A of the Act." 14. In view of the aforesaid decisions, we are of the view that reference by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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