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TMI Blog2018 (1) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were recorded by the Assessing Officer. If the AO failed to record the valid reasons then reassessment would be bad in law. We are of the view that when the notice under section 148 has been issued and addition has been made by adopting the value estimated by the Valuation Officer and when we found that the AO is not empowered to refer any property for valuation in a case where no assessment proceedings or reassessment proceedings of the assessee is pending before him, there is no justification to make any addition in such cases. CIT(A) is correct in law as he relied the case of CIT vs. Umiya Co-op. Housing Society Ltd. (2006 (7) TMI 200 - GUJARAT HIGH COURT), wherein it was held that where no assessment and/or reassessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- on sale of Land Building. The sale consideration was shown at ₹ 15,06,00,000/- and cost of acquisition was taken at ₹ 10,13,40,896/- resulting into Long Term Capital Gain of ₹ 4,92,59,704/-.Facts of the case are that Mrs. Lai Yun Hsiang Liu, owner of the properties admeasuring an area of 4 Bighas 1 Cottah 11 Chittacks comprised in C.S.Plot No-355 and 3 Bighas 1 Cottah 11 Chittacks comprised in C.S Plot No.331 and 332 purchased on 08.03.1959 and 16.06.1959 respectively, and she died on 17.01.1998. The said property was executed by a will whereby Mr. Peter Liu was made the sole executor and gave bequeather and devised all her properties including the said property in favour of her children in the manner provided in thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C.I.T., Circle-33, Kolkata had referred the matter for valuation to the Valuation Cell, which resulted in reduction in valuation as on 01.04.1981.On identical principles, the cost of acquisition of the land(approximately 142 Cottahs) sold by the assessee AOP would be drastically reduced and thus the calculation of the LTCG of the assessee AOP would be substantially increased. Therefore, a reference was made to the District Valuation Officer, Valuation Cell by the ITO, Ward-33(4), Kolkata vide letter No. ITO/Wd-33(4)/AAAAE2967P/2012- 13/100 dated 24.07.2012 u/s.55A of the Income-tax Act, 1961 ascertaining the fair market value of the said property.Hence, it was logical to conclude in respect of this property also, being appurtenant thereto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that: When the notice under section 148 has been issued and addition has been made by adopting the value estimated by the Valuation Officer and when we found that the Assessing Officer is not empowered to refer any property for valuation in a case where no assessment proceedings or reassessment proceedings of the assessee is pending before him, we see no justification to make any addition in such cases , Following the above decision, the ld CIT(A) held that reference made to DVO by the Assessing Officer was beyond his jurisdiction and reopening the case on the basis of DVO s report in another case was also not valid. Therefore, ld. CIT(A) allowed the assessee s appeal on the said technical ground and held the reopening U/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition has been made by adopting the value estimated by the Valuation Officer and when we found that the AO is not empowered to refer any property for valuation in a case where no assessment proceedings or reassessment proceedings of the assessee is pending before him, there is no justification to make any addition in such cases. Therefore, we are of the view that action of CIT(A) is correct in law as he relied on the judgment of Gujarat High Court in the case of CIT vs. Umiya Co-op. Housing Society Ltd. reported in 314 ITR 272 (Guj), wherein it was held that where no assessment and/or reassessment proceedings are pending, AO is not empowered to refer to the Valuation Officer, any matter for ascertaining cost of construction of any prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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