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TMI Blog2019 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... se two lands and therefore, it was not necessary for making a reference under Section 55A of the Act. Even before the Assessing Officer, the assessee had produced the report of a registered valuer and the assessee had based his claim on the estimate made by the registered valuer. The Assessing Officer has shown no reason whatsoever for rejecting the valuation made by the registered valuer except the wrong notion entertained by him that the cost of acquisition of land owned and sold by the son of the assessee was approved by this Court as ₹ 1,000/- per cent. Thus in a case where the AO is of the opinion that the value of the capital asset claimed by the assessee, on the basis of the estimate made by a registered valuer, is less than its fair market value, it is not mandatory for the Assessing Officer to make a reference under Section 55A of the Act to the Valuation Officer. The substantial question of law is answered accordingly. However, on the facts of the case, we find that the Assessing Officer should have made a reference under Section 55A of the Act. - decided in favour of assessee. - I. T. Appeal No. 75 of 2015 - - - Dated:- 19-3-2019 - MR C. K. ABDUL REHIM AN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal. The Tribunal found that there existed no circumstances to make a reference under Section 55A of the Act as demanded by the appellant. The Tribunal found that the cost of acquisition determined in respect of the land owned by the son of the assessee was approved by this Court in the case filed by him and therefore, there was no illegality committed by the Assessing Officer and the appellate authority in adopting the same value as the cost of acquisition in respect of the land owned and sold by the assessee. Accordingly, the Tribunal dismissed the appeal. 6. We have heard Sri.S.Vijayan Nair, learned counsel for the appellant and also Sri.Christopher Abraham, learned Standing Counsel for the Income Tax Department. 7. Learned counsel for the appellant contended that when the Assessing Officer was of the opinion that the value of the capital asset estimated by the assessee on the basis of the report of a registered valuer was less than its fair market value, it was incumbent upon the Assessing Officer to make a reference under Section 55A of the Act to the Valuation Officer. Learned counsel would further contend that this Court had not approved the cost of acquisition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade to Valuation Officer. There is no question of the Assessing Officer invoking the power under that provision for any other purpose or under any other circumstance (See Amiya Bala Paul v. CIT : AIR 2003 SC 2702 ). 11. At this juncture, we may note that as per Section 55(2)(b) of the Act, as it stood at the relevant time, cost of acquisition in relation to a capital asset, where capital asset became the property of the assessee before the first day of April, 1981, means cost of acquisition of the asset to the assessee or the fair market value of the asset on the first day of April, 1981, at the option of the assessee. The policy of law was to take the fair market value as on 1st April, 1981 as the basis for the purpose of indexation. 12. On a plain reading of Section 55A of the Act, it can be found that in a case where the Assessing Officer is of the opinion that the value of the capital asset as claimed by the assessee, in accordance with the estimate made by a registered valuer, is less than its fair market value, he may refer the valuation of the asset to a Valuation Officer. The question, whether it it is mandatory for the Assessing Officer to make a reference to the Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate authority and the Tribunal have misread the decision of this Court in the case filed by the son of the assessee. Learned counsel for the appellant has produced a copy of the judgment of this Court in the case I.T.Appeal No.94/2009 filed by the son of the assessee, for our perusal. On a perusal of this judgment, we find that this Court had not approved or disapproved the valuation of the capital asset made by the Assessing Officer in respect of the land owned and sold by the son of the assessee. In that case, the son of the assessee did not seek any reference under Section 55A of the Act at the first appellate stage. He raised such a contention only at the appellate tribunal stage and for that reason this Court did not interfere with the valuation of the capital asset made by the Assessing Officer. The judgment in I.T.Appeal No.94/2009 also does not indicate that the son of the assessee had produced report of any registered valuer before the Assessing Officer. Therefore, the authorities under the Act were not justified in holding that this Court had approved the cost of acquisition of the land owned and sold by the son of the assessee, as ₹ 1,000/- per cent. 16. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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