9911796707
TMI Blog2018 (6) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... come for Assessment Year 2011-12 on 17.08.2012, declaring a total income of Rs. 5,52,163/-. During the scrutiny proceedings, it was observed by the Assessing Officer that the assessee disclosed capital gain of Rs. 20,65,700/- out of transfer of 227Cottahs of land at Howrah in Kolkata. The valuation report for arriving at the valuation as on 01.04.1981 and on the date of transfer was furnished by the assessee. The valuation of the property was shown by the assessee at Rs. 4,31,30,000/- as on 01.04.1981, but as per assessing officer, which was a mismatch in comparison to the deemed value of transfer of Rs. 30,87,20,000/- .Therefore, the Assessing Officer referred the matter to the District valuation officer (DVO) for getting the valuation of the land as on 01.04.1981.The valuation report of DVO was received by the assessing officer on 26.03.2014 and the valuation as on 01.04.2081 of the land as valued by DVO was Rs. 1,98,53,912/- as against Rs. 4,31,30,000/- shown by the assessee. The Assessing Officer sent the report of DVO to the assessee for offering his comments. On receipt of the valuation report the assessee filed its submission before the Assessing Officer stating that valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue was an essential precondition. However, in the instant case admittedly, the fair market value claimed by the appellant as on 01.04.1981 at Rs. 4,31,30,000/- was more than the value determined by the DVO at Rs. 1,98,53,912/- therefore, the AO cannot make reference to the DVO. Hence the reference to the DVO and the determination of fair market value of the capital asset as on 01.04.1981 was found to be invalid and this way, the ld CIT(A) directed the A.O. to delete the addition of Rs. 16,54,92,985/-. 5. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us. 6. The ld. DR for the Revenue vehemently submitted before us that the Assessing Officer referred the case to the DVO for valuation of property as on 01.04.1981. The valuation of property done by DVO was much less than that shown by assessee. The Assessing Officer referred the matter to DVO under section 55A(b)(ii) of the I.T. Act which relates to "in any other case, if the Assessing Officer is of opinion-that having regard to the nature of the asset and other relevant circumstances, it is necessary to do so." Therefore, ld. DR for the Revenue has submitted that the Assessing Officer has not referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the reason why he inflated the fair market value on 1st April, 1981. The reference made by the Assessing Officer was competent. The Learned Tribunal was correct in holding that the clause (b)(ii) to section 55A carries a broader spectrum which certainly empowers the Assessing Officer to make reference to the DVO wherein in his opinion the fair market value estimated by the assessee is not proper and since in the present case the reference has been made by the Assessing Officer u/s.55A(b)(ii) of the Act, in our considered opinion such action of Assessing Officer was well within the parameters of the spirit of the section which empowers the Assessing Officer to make a reference to DVO i.e. "in any other circumstances which he thinks that it is necessary to refer the matter to the DVO" and, therefore, in the present case, the action of Assessing Officer in making reference to DVO while not accepting the valuation shown by the assessee on the basis of the registered valuer's report was well permissible under the law. For the aforesaid reasons, the appeal fails and is dismissed. Both the questions formulated at the time of admission of the appeal are answered in the negative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r value than the fair value determined by the DVO. The first technical issue arises before us is whether the reference made by the Assessing Officer to the DVO for the valuation of the property is valid for the year under consideration. In this regard, we note that an amendment u/s 55A(a) of the Act, was effective from 1st July 2012, inserting in section 55A(a) as follows: "is at variance with its fair market value". Prior to the amendment u/s 55A(a) of the Act, the provisions of the said section read as under: "55A. Reference to Valuation Officer With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer-- (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion that the value so claimed is less than its fair market value......... It is abundantly clear from the provisions of section 55A(a), as noted above, that prior to 1st July, 2012, the Assessing Officer can refer the valuation of capital assets to a Valuation Officer in a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction, as such reference could have been made by him only if, in his opinion, the value claimed by the assessee was less than the fair market value, which was not so in the case of the assessee. 9.Contention referred to, before us, by the learned DR for the Revenue that the provisions of section u/s 55A(b)(ii) of the Act makes the issue open for Assessing Officer and he may refer the case to DVO; even he is of the view that value disclosed by assessee was higher than fair market value. Apart from this, the ld. DR for the Revenue has relied on the judgment of the Hon'ble Kolkata High Court in the case of Nirmal Kr. Ravindra Kumar - HUF vs. CIT in ITA No.293 of 2008, dated 09.06.2016 which we have noted in para No. 6 of our order. We note that on the similar facts, the submissions of ld DR for the Revenue, has been addressed by the coordinate Bench of ITAT Kolkata, in other case, namely M/s. Royal Calcutta Turf Club vs. DCIT, Kolkata in ITA No.231/Kol/2013 for Assessment Year 2008-09, wherein it was held as follows: 12. U/S.55A of the Act, the AO has power to a make a reference to the valuation officer regarding valuation of a capital asset for the purpose of ascertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment will be suitably done as per law to revalue/reassess the Capital Gain. 6.6. In view of above discussion after considering all this, for the sake of interest of revenue and attempting to plug revenue loss, land value is taken as Rs. 45,000/- per cottah as on 01/01/1981, for which the total land value comes to Rs. 20,46,600/- as on 01/01/1981. After indexing cost of the land stands as Rs. 1,12,76,766/- [20,46,600 X 551/100]. As such Index cost of land value is taken as Rs. 1,12,76,766/- in lieu of Rs. 11,10,63,307/-." 14. Before CIT(A) the report of the DVO was made available and in his report, he adopted the FMV as on 1.4.1981 at Rs. 20,46,600. The grievance of the Assessee was that the DVO did not give proper opportunity to the Assessee before giving his report and the grievance in this regard is projected in the additional grounds of appeal raised before the Tribunal. 15. First and foremost objection of the assessees before learned CIT(A) was that reference to the DVO under s. 55A was invalid. Under cl. (a) of s. 55A of the Act, the AO is entitled to make the reference to the Valuation Officer in a case where the value of the asset as claimed by the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and assessment order were duly considered. The value of property was determined by the appellant through Regd. Valuer as on 01.04.1981 at Rs. 2.01 crores and by the A.O. through DVO at Rs. 20,60,244/-In the assessment order value of this property as' 1.4.81 was determined at Rs. 20,46,600/- based on sale instances. As A.O. while finalizing assessment could not get the report from DVO, he based on sales instances completed assessment by taking value on 1.4.81 at Rs. 20,46,600/-. Report of DVO was received on 13-04-2011. Copy of the DVO report was given to the AR during appellate proceeding. It is pertinent to mention here that a sharp difference was found in the valuation done by Registered Valuer at Rs. 2.01 crores and valuation done by DVO at Rs. 20,60,244/-. For this appellant has no reply. Practically this difference can't be so wide. It is not important whether the AO. can refer to DVO or not, but it is important to determine correct value on 01.04.81. Appellant has declared high value of property at 1.4.81 to claim high cost after indexation and pay lesser tax. This device is adopted basically to evade long term capital gain tax. Hence, for the purpose of capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has shown more than the fair market value he obviously, is interested in increasing the index cost for the purpose of avoiding to pay capital gains. Therefore, the practice adopted by him cannot be permitted. Even assuming that there is a case in which the assessee has offered more than the market value, it is not the policy of law to recover more than what is actually due from the assessee. In either case, the contention of the assessee is wrong and not acceptable. In the case before us, the assessee, however, was inspired by sinister motive of avoiding to pay capital gain and that was the reason why he inflated the fair market value on 1st April, 1981. The reference made by the Assessing Officer was competent. The learned Tribunal was correct in holding that the clause (b)(ii) to section 55A carries a broader spectrum which certainly empowers the Assessing Officer to make reference to the DVO wherein in his opinion the fair market value estimated by the assessee is not proper and since in the present case the reference has been made by the Assessing Officer u/s.55A(b)(ii) of the Act, in our considered opinion such action of Assessing Officer was well within the para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be over-emphasised that the discipline demanded by a precedent or the disqualification or diminution of a decision on the application of the per incuriam rule is of great importance, since without it, certainty of law, consistency of rulings and comity of Courts would become a costly casualty. A decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the Court. A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a Co-equal or Larger Bench; or if the decision of a High Court is not in consonance with the views of this Court. It must immediately be clarified that the per incuriam rule is strictly and correctly applicable to the ratio decidendi and not to obiter dicta. It is often encountered in High Courts that two or more mutually irreconcilable decisions of the Supreme Court are cited at the Bar. We think that the inviolable recourse is to apply the earliest view as the succeeding ones would fall in the category of per incuriam." 20. It was submitted by the learned counsel for the Assessee that the earlier view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the legal aspects itself we have decided the issue in favour of the assessee, we refrain from undertaking this academic exercise of disposing of this case on merits.' 5. In view thereof there is no merit in the appeal. Appeal stands dismissed." 21. The Hon'ble Gujarat High Court in the case of HiabenJayantilal Shah (supra) has held on this issue as follows : "Under cl. (a) of s. 55A, the AO is entitled to make the reference to the Valuation Officer in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by the registered valuer, if the AO is of the opinion that the value so claimed is less than the fair market value. In any other case, as provided under cl. (b) of s. 55A, the AO has to record an opinion that (i) the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage or by more than such an amount as may be prescribed; or (ii) having regard to the nature of the asset and other relevant circumstances, it is necessary to make such a reference. As can be seen from the communication dt. nil from DVO to the petitioner insofar as the fair market va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case the reference has been made by the Assessing Officer u/s.55A(b)(ii) of the Act, in our considered opinion such action of Assessing Officer was well within the parameters of the spirit of the section which empowers the Assessing Officer to make a reference to DVO i.e. "in any other circumstances which he thinks that it is necessary to refer the matter to the DVO" and, therefore, in the present case, the action of Assessing Officer in making reference to DVO while not accepting the valuation shown by the assessee on the basis of the registered valuer's report was well permissible under the law. It thus clear that on same facts, the Hon'ble Calcutta High Court has taken irreconcilable view. The earlier view has not been referred to or considered in the later view and all the Judgements have been rendered by Judges of equal strength. In the given circumstances, we are of the view that the ratio laid down by the Hon'ble Supreme Court in the case of Sundeep Kumar Bafna (supr) would be applicable. As rightly contended by the learned counsel for the Assessee, the ratio laid down in the said judgment will support the view that the earlier decisions have to be followed. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
