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TMI Blog2020 (8) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... the PMV of a capital asset where the AO is of the opinion that the value of the asset as claimed by the appellant, is less than its PMV. However, in the instant case, the AO has referred the matter to the DVO to verify the correctness of the value adopted by the Valuer's report as on 1.04.1981. This is not in line with the provisions of Section 55A of the Act as the section implies that the AO should be of the considered opinion that the value of asset claimed by the appellant is less than its PMV and not for any verification purpose. In the DVO's report, the PMV as on 1.04.1981 was determined at ₹ 68,45,000/- which was much lower than the valuation of the Approved Valuer of the aggregate amount of ₹ 2,27,08,814/-. Therefore, in light of the existing provisions of Section 55A of the Act, relevant for the A.Y. under consideration, the AO did not have the mandate to refer the matter for valuation of FMV as on 1.04.1981 to the DVO u/s 55A of the Act amendment to Section 55A of the Act by the Finance Act, 2012 wherein the words 'is less than its fair market value' was substituted by 'is at variance 'with its fair market value' is w.e.f. 1.07. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 as lead case for adjudication. ITA No.1941/PUN/2019 A.Y.2009-10 4. The brief facts of the case are that the assessee filed its return of income on 31.08.2009 with an income of ₹ 3,17,80,200/- and assessment order dated 30.12.2011 was passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act‟) assessing total income at ₹ 14,84,83,280/- which included the Long Term Capital Gains at ₹ 14,82,08,800/- for sale of property of which the assessee was a co-owner having a share of 16,693 sq. mtrs. During the assessment proceedings, reference was made to the District Valuation Officer (DVO)-1, Mumbai u/s.55A of the Act to determine (a) the Fair Market Value of the property as on the date of sale and (b) to verity the correctness of the cost of acquisition as on 01.04.1981 adopted on the basis of the Approved Valuer‟s report. Since the DVO expressed his inability to give the valuation report before 30.12.2011, the assessment order was passed in accordance with the directions given by the Joint Commissioner of Income Tax, Range-5, Pune u/s.144A of the Act subject to the receipt of the Valuation Report of DVO. 5. During First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceedings, the AO referred the property to the DVO u/s 55A of the Act, vide his letter dated 26.09.2011, for (a) valuation of FMV as on the date of sale i.e. 4.09.2008 and also (b) to verify the correctness of the cost of acquisition as on 1.04.1981 adopted on the basis of the Approved Valuer's report. Since the assessment was getting barred by limitation of time on 31.12.2011 and the DVO categorically stated that the Valuation Report could not be submitted by that date, the AC passed the assessment order u/s 143(3) of the Act by assessing the Long term capital gains at ₹ 14,82,08,800/- subject to change on receipt of the valuation report from the DVO. The DVO's report dated 28.08.2015 was -received after the date of completion of the assessment order. The DVO's report has been forwarded to this office by the AO. 7.3.2 During the appellate proceedings, the valuation report of the DVO dated 28.Ub.2015 and the appellant's objections/ submissions thereon have been duly considered. In the DVO's valuation report dated 28.08.2015, (a) the FMV of the entire property, of which the appellant was a co-owner having share of 16,693 sq. mtrs., was determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; comments have been given: 5. Objection : Valuation as at 01.04.1981 We have submitted a letter dated 21.05.2015 (Copy enclosed) acknowledged by Your Office, wherein Bombay High Court decisions are quoted. It is learnt that decision in the case of Doulal Mohta HUF 360 ITR 561 is accepted by the Department. Reply : The implication of decision in the case of Doulal Mohta HUF 360 ITR 561 for the instant case is to be seen /reviewed by Assessing Officer. 7.3.3.2 In light of the DVO's comment on the applicability of the decision of the case of Daulal Mohta (HUF) in the appellant's case, the issue is taken up for consideration. On perusal of the letter of reference by the AO to the DVO dated 26.09.2011, it is observed that as far as the valuation as on 1.04.1981 is concerned, the AO has referred to the DVO stating, 03. Further, the cost of acquisition as on 1.04.1981 is adopted on the basis of Valuer's report, the correctness of which requires verification, As per the provisions of Section 55A of the Act for the year under consideration, reference can be made by the AO to the Valuation Officer for ascertaining the PMV of a capital asset whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Less : Indexed Cost of Acquisition 3,15,74,810/- ( As per Approved Valuer s report @ ₹ 352 per Sq. mtrs.) Long Term Capital Gains 4,86,62,932/- 7.3.5 Hence, in light of the above, the Long term capital gains is restricted to ₹ 4,86,62,932/- accordingly. Therefore, Ground of Appeal Nos. 2, 3, 4 5, filed by the appellant, are accordingly PARTLY ALLOWED. From the above, it is evident that the Ld. CIT(Appeals) has given a categoric findings on the issue after placing reliance on the various judicial pronouncements and therefore, there is no reason to interfere with the findings of the Ld. CIT(Appeals) and the same is thereby upheld. Thus, the grounds raised in the appeals are dismissed. 9. In the result, appeal of the Revenue in ITA No.1941/PUN/2019 is dismissed. ITA No.1943/PUN/2019 A.Y.2009-10 10. Since facts common and issues are similar, our decision rendered in ITA No.1941/PUN/2019 shall mutatis mutandis apply in ITA No.1943/PUN/2019. In this case also, the findings of the Ld. CIT(Appeals) is upheld a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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