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TMI Blog2016 (2) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... ee filed his return of income on 08-11-2006 declared long term capital loss of ₹ 1,04,12,335/-. During the course of assessment proceedings the AO noted that the assessee after deducting the cost of selling and indexed cost of acquisition determined the net sale consideration at ₹ 1,87,085/-. After claiming deduction u/s.54B and 54F on account of investment in agricultural land and purchase of residential house the assessee had declared long term capital loss of ₹ 1,04,12,335/-. During the course of assessment proceedings the AO asked certain details which the assessee provided. 3. So far as indexed cost of acquisition is concerned the AO noted that the assessee has adopted ₹ 310/- per sq.mtr of the agricultural land as on 01-04-1981. He observed from the valuation report of the approved valuer filed by the assessee that the approved valuer has cited 2 sale instances. The first sale instance pertains to a plot admeasuring 1091 sq.mtrs located at Hadapsar which has been registered in Pune during 1984 @ 298/- per sq.mtr. Following the regression method based on the circular of Town Planning and Valuation department, Pune and various circulars issued from ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,76,378/-. The AO determined the long term capital gain at ₹ 1,45,46,250/-. 4. The assessee approached the CIT(A) who gave part relief. Subsequently, the assessee filed an appeal before the Tribunal and the Tribunal vide ITA Nos.638 639/PN/2010 order dated 17-02- 2012 restored the issue to the file of the CIT(A) with a direction to decide the issue afresh by observing as under : 3. We have examined the grounds and the facts available on records and find that the information furnished now will help bringing new primary evidences required for the administration of justice. Ld DR for the revenue find merits in the above argument of the assessee s counsel. Considering the importance of the said additional evidence, we are of the opinion the same should be admitted and the matter should be restored to the files of the Ld. CIT (A). The first appellate authority shall admit the same and adjudicate the issue afresh in both the cases after utilizing the facts emanating from said additional evidences. The Ld. CIT (A) shall grant reasonable opportunity of being heard to the assessee while adjudicating the same and at the time of passing a speaking order as per the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 to 1131/PN/2013 order dated 27-08-2014 he submitted that the Tribunal in the said decision has dismissed the appeal filed by the Revenue and upheld the order of the CIT(A) wherein the CIT(A) had deleted the addition made by the AO by accepting the assessee s contention that no reference could be made by the AO if the value declared by the assessee is more than the fair market value. He accordingly submitted that since in the instant case the fair market value declared by the assessee is more than the fair market value of the agricultural land, therefore, the AO had no jurisdiction to refer the matter to the DVO. He accordingly submitted that this being a covered matter the order of the CIT(A) should be set aside and the ground raised by the assessee should be allowed. 10. The Ld. Departmental Representative on the other hand heavily relied on the order of the AO and the CIT(A). He submitted that the assessee by adopting higher value as on 01-04-1981 is trying to inflate the indexed cost of acquisition and thereby reducing the taxable capital gain. The DVO had determined the value of the land at ₹ 75/- per sq. mtr whereas the registered valuer of the assessee has determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 was issued on 25.01.2011; d) F.M.V. as on 1.04.1981 adopted by the Assessing Officer on the basis of Report of DVO obtained in the case of other person at ₹ 5,92,471/- and e) Capital Gain assessed by the Assessing Officer at ₹ 1,39,25,210/- 2.4 The assessee sold the ancestral property situated Hadpasar at ₹ 159,29,250/-. Since the property was held prior to 01.04.1981, the assessee got the valuation as on 01.04.1981 from the Government Approved Valuer, who has certified the valuation as on 01.04.1981 at ₹ 32,85,000/-. Accordingly the assessee computed the long term capital gain at ₹ 173,44,985/- and claimed exemption u/s.54B 54C amounting to ₹ 173,94,000/-. The Assessing Officer did not agree with the valuation as per Govt. Approved Valuer submitted by the assessee. The Assessing Officer adopted the Valuation Report of the Departmental Valuation Officer, Solapur in respect of some other land who valued the land at ₹ 101/- per sq. mtr. and accordingly the Assessing Officer has considered the cost of land in the hands of the assessee at ₹ 5,92,471/- and computed the capital gain at ₹ 313,19,210/- after taking into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the Assessing Officer for making the reference u/s. 55A of the Act as well as the amendment made to Sec. 55A (a) and held as under: 7. We find that s. 55A(a) of the Act very clearly at the relevant tie provided that a reference could be made to the DVO only when the value adopted by the assessee was less than the fair market value. In the present case, it is an undisputed position that the value adopted by the respondent-assessee of the property at ₹ 35.99 lakhs was much more than the fair market value of ₹ 6.68 lakhs even as determined by the DVO. In fact, the AO referred the issue of valuation to the DVO only because in his view the valuation of the property as on 1981 as made by the respondent-assessee was higher than the fair market value. In the aforesaid circumstances, the invocation of s. 55A(a) of the Act is not justified. 8. The contention of the Revenue that in view of the amendment to s. 55A(a) of the Act in 2012 by which the words is less than the fair market value are substituted by the words is at variance with its fair market value is clarifiactory and should be given retrospective effect. This submission is in face of the fact that the 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uer's report. Therefore, the AO was required to form an opinion that the value so claimed is less than the fair market value. The estimated value proposed by the DVO is shown at ₹ 3,97,000, which is less than the fair market value shown by the assessee as on 1st April, 1981. Therefore, cl. (a) of s. 55A of the Act cannot be made applicable. Clause (b) of s. 55A of the Act 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, cl. (b) of s. 55A of the Act also cannot be invoked. Therefore, there is no question of having recourse to sub-cl. (ii) of cl. (b) of s. 55A of the (Act. 12. There is one more aspect of the matter. For invoking s. 55A of the Act, there has to be a claim made by the assessee, before the AO can record opinion either under cl. (a) or cl. (b) of s. 55A of the Act to make a reference to the Valuation Officer. The facts of the present case go to show that the reference was made on 26th April, 1996, whereas, the return of income had been filed by the assessee only on 27th Aug., 1996. Hence, on the date of making the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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