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TMI Blog2014 (3) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... of consideration' appearing in section 48 of the Act does not have any reference to the fair market value but to the consideration referred to in the sale deeds as the sale price of the assets which have been transferred. In view of the above, it is concluded that reference under Section 55A of the Act to the Valuation Officer for ascertaining the Fair market value of the capital asset was unjustified. Accordingly, the substantial questions of law are answered against the revenue and in favour of the assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... he other hand, learned counsel for the respondent assessee submitted that reference under section 55A of the Act could only be made in respect of cases covered by provisions under Sections 45(IA), Section 45(2) and 45(4) of the Act. Sections 45 and 48 refer to full value of consideration. Unless there was a provision specifically providing that the fair market value will be treated to be full value of consideration, the fair market value cannot be taken as the full value of consideration as per Section 45 read with section 48 of the Act. Reliance was placed on judgments in CIT and another v. George Henderson & Co. Limited, (1967) 66 ITR 622 (SC) and CIT v. Gillanders Arbuthnot & Co. (1973) 87 ITR 407 (SC) and Delhi High Court judgment in CIT vs. Smt. Nilofer I.Singh, (2009) 309 ITR 233. 5. After hearing learned counsel for the parties, we do not find any merit in the appeal. The primary question that arises for consideration in the appeal is whether the Assessing Officer was justified in making a reference to the DVO under Section 55A of the Act for ascertaining the fair market value of the capital asset which was transferred. 6. Section 55A of the Act appears in Chapter IV, Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer of a capital asset affected in the previous year shall be exigible to income tax under the head capital gains. For purposes of mode of computation under Section 48 of the Act, it shall be computed by deducting from the 'Full Value of consideration' received or accruing as a result of the transfer of the capital asset, the amount of expenditure incurred wholly and exclusively in connection with such transfer as also the cost of acquisition of the asset and the cost of any improvement thereto. In other words, on a combined reading of section 45(1) and Section 48 of the said Act,it is apparent that when a sale of property takes place, the capital gains arising out of such a transfer have to be computed by looking at the full value of the consideration received or accruing as a result of such transfer after deducting the amount of expenditure incurred wholly and exclusively in connection with such transfer as also the cost of acquisition of the asset and the cost of any improvement thereto. 9. Section 48 of the Act envisages 'Full value of consideration'. The expression "Full value of consideration' cannot be read to mean 'Fair Market value' a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that if certain conditions are satisfied as mentioned in the first proviso to section 12B(2), the market value of the asset transferred, though not equivalent to the full value of the consideration for the transfer, may be deemed to be the full value of the consideration..." It was concluded that the expression 'full value of consideration' for sale used in Section 12B(2) of the Income Tax Act, 1922 (in short, 'the 1922 Act') cannot be construed as the market value but as the price decided upon by the parties to the transaction. It needs to be mentioned that the provisions of Section 12B of the 1922 Act pertained to capital gains and sub section (1) was pari materia to Section 45(1) of the Act whereas sub section (2) of Section 12B of 1922 Act was corresponding to section 48 of the Act. 10. The Hon'ble Supreme Court reiterated the aforesaid view in CIT v. Gillanders Arbuthnot & Co. (1973) 87 ITR 407. Thus, it emerges that the expression 'Full value of consideration' appearing in section 48 of the Act does not have any reference to the fair market value but to the consideration referred to in the sale deeds as the sale price of the assets which have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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