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TMI Blog2018 (9) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case are that the assessee has filed his return of income on 19.7.2010 declaring taxable income at Rs. 1,74,530/-. This return was accepted under section 143(1) on 16.5.2011. The AO got information that the assessee was co-owner in agriculture land bearing survey no.205, situated Shilaj, Thaltej. This land was sold on 26.2.2010 for a consideration of Rs. 2,49,99,993/-. According to the AO, the share of assessee comes to Rs. 83,33,331/-. He further observed that the assessee failed to offer net capital gain for taxation in his return of income, therefore, he recorded reasons and reopened the assessment. In the reopened assessment, notices under section 147/142(1) were issued upon the assessee. The assessee had contended that value of agriculture land sold by him as on 1.4.1981 was Rs. 39,36,390/-. He submitted that if the benefit of indexation is being given to this value, then cost of acquisition would be Rs. 2,48,77,353/- and net capital gain would be of Rs. 1,22,640/- in which the assessee's share is one-third which comes to Rs. 40,880/- only. The ld.AO was not satisfied with this computation of capital gain. He made reference to the DVO under section 55A of the Act. The D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashrathbhai Sombhai Prajapati. According this latest report, distance of 8kms. was measured form municipal limit of Ahmedabad Municipal Corporation as on 6.1.1994. The ld.CIT(A) has held that land of the assessee is situated within 8kms. Hence, on transfer of this capital asset, capital gain is assessable in the hands of the assessee. We do not find any merit in this fold of contentions raised by the ld.counsel for the assessee. We have specifically gone through the finding of the ld.CIT(A) wherein the ld.CIT(A) has reproduced on page no.8 of his order, order of the AO dated 2.9.2014 giving effect to the CIT(A)'s order. It is pertinent to note that in the order dated 12.4.2018, the ld.AO again reiterated geographical locations of this land within 8kms. 9. As far as next fold of contention is concerned, whether reference under section 55A for ascertaining fair market value of the land as on 1.4.1981 is justified or not is concerned, we find that the assessee has disclosed value of the land as on 1.4.1981 at Rs. 39,36,290/-. This estimated value adopted by the assessee was on the basis of registered valuer's report. As against this, the ld.AO ought to adopt the value at Rs. 3,15,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.7.2012. We are, however, concerned with the period prior thereto. Clause (b) of section 55A is in two parts and permits a reference to DVO if the Assessing Officer is of the opinion that (i) the fair market value of the asset exceeds the value of the asset so claimed by the assessee by more than such percentage of the value of the asset so claimed or by more than such amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. Sub-clause(i) of clause (b) also for the same reasons recorded above, would have no bearing on the fair market value as on 1.4.1981. The Assessing Officer had not resorted to sub-clause(ii) of clause (b). In any case, clause(b) would apply where clause(a) does not apply since it starts with the expression "in any other case". In other words if assessee has relied upon a Registered Valuer's Report, Assessing Officer can proceed only under clause (a) and clause(b) would not be applicable. 16. In the present case, admittedly the assessee had relied on the estimate made by the Registered Valuer for the purpose of supporting its value of the asset. Any such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts fair market value; The provision specifically provides that if the Assessing Officer is of the opinion that the value disclosed by the assessee is less than the fair market value only, then he can make a reference to the DVO. Now the moot question is as to how the opinion is to be formed by the Assessing Officer. Whether this opinion is subjective or guided by some judicious actions. The formation of opinion should have rational connection with the material brought on record. It should not be based on extraneous or irrelevant reasons. In the present case, the Assessing Officer before making a reference to the Valuation Officer has not brought anything on the record indicating that the assessee has disclosed lesser sale price. There is nothing on the record which can suggest to ignore the report of the registered valuer and to adopt the report of the Valuation Officer. Both these persons are technical persons and before accepting the evidence of an expert, there should be corroboration of some other material. Taking into consideration the overall facts and circumstances of the case, we are of the opinion that the Id. Assessing Officer ought to have not made a reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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