9911796707
TMI Blog2018 (1) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... in at Rs. 12,03,110/- and paid the taxes accordingly. AO noted that the property was acquired 70 years back and the valuation report as on 01.04.1984 was also not furnished. In the absence of valuation report, the cost of acquisition determined by the assessee as on 01.04.1981 at Rs. 36,33,769/- had no base and accordingly, the indexed cost of acquisition was also not correct. AO therefore had reason to believe that income of Rs. 52,32,627/- chargeable for long term capital gains had escaped assessment within the meaning of explanation of 2(b) of Sec.147 of the Act. He accordingly, issued notice u/s 148 of the Act dt.29.03.2012 and served on the assessee. Subsequently, notice u/s 142(1) of the Act along with a questionnaire was also served upon assessee on 22.10.2012 and there was no compliance. He accordingly framed an assessment u/s 144 r.w.s. 147 of the Act vide order dt.19.03.2013 and determined the total taxable income at Rs. 51,36,120/-. Aggrieved by the order of AO, assessee carried the matter before Ld. CIT(A), who vide order dt.16.03.2015 (in appeal No.ABD/CIT(A)/91/2013-14)(A1/7)) allowed the appeal of assessee by holding as under : "9.1 The first issue to be decided is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e words "is less than its fair market value" is applicable from 01/07/2012 and cannot be considered as clarificatory, having retrospective application. The Hon'ble Court has also rejected the reliance placed by the revenue on CBDT Circular No.96 dated 25/11/1972. The Hon'ble Court has also rejected the contention of the revenue that the AO has power to call for the report from the DVO to determine fair market value u/s 131, 133(6) and 142(2) of the Act. (2) Smt.Krushnabai Tingre Vs. ITO (2006) 101 ITD 317 (Pune) In this case, it 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; 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 u/s 55A was not valid. (3) Smt.Sarala N. Sakraney Vs. ITO [2011]130 ITD 167 (Mum) In this case, it has been held that Fair Market Value of the property as on 1st April, 1981, declared by the assessee as per Government Registered Valuer's report being more than the Fair Market Value as estimated by the DVO on reference by A.O., said re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r clause (b)(i) of section 55A of the Act. The Assessing Officer could not refer the property for valuation by DVO under clause (b)(ii) of section 55A as the assessee has adopted the value as on 01.04.1981 on the basis of valuation report of government approved valuer Shri Atul Thombare. In the case of Smt. Sarala N. Sakraney Vs. ITO, A.Y. 2006- 07 (2011) 140 TTJ 411 (Mum) has held that the fair market value of property as on 01.04.1981 declared by the assessee as per government registered valuer's report being more than fair market value as estimated by the DVO on reference by the Assessing Officer, said reference is not valid and consequently, estimation of fair market value of the property as made by the assessee has to be accepted. The ratio of Smt. Sarala N. Sakraney (supra) has been laid down by following the decision of Hon'ble Bombay High Court in the case of CIT Vs. Daulal Mohta (HUF) in IT appeal No.1031 of 2008 decided on 22.09.2008. In view of above, it is evident that the reference made by the Assessing Officer for valuation of property as on 01.04.1981 is without jurisdiction. 4.1 The stand of the assessee is fortified from the amendment made to section 55A w.e.f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of long term capital gain. 2. Under the facts and circumstances of the case the learned CIT(A) erred in coming to a conclusion that the provisions of section 55A of the IT Act,1961 by way of reference to a DVO by the Assessing Officer is operative with effect from 1.7.2012 and in respect of transaction executed after this date. In this regard attention is drawn to the Memorandum to Finance Bill, 2012 explaining the scope and intent of introduction of provisions of section 55A of the IT Act,1961. 3. Under the facts and circumstances of the case the view upholding by the learned CIT(A) is not in accordance with the Memorandum to Finance Bill,2012 explaining the scope and intent of provisions of section 55A of the IT Act,1961 as it was very clearly stated in section 55A that, in a case where capital asset become property of the assessee before 1.4.1981 and assessee has option of substituting fair market value as the cost of asset in such cases adoption of higher value as the fair market value as on 1.4.1981 was rampant and leading to lower amount of capital gain being offered to tax. 4. The learned CIT(A) erred in coming to a conclusion that, this amendment is effec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
