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TMI Blog2021 (5) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... evity. The facts as well as grounds of appeals raised in ITA No.610/SRT/2018, for A.Y. 2013-14, in case of Shri Balubhai Chandubhai Patel has been taken into consideration for deciding the above appeals en masse. 3. The grounds of appeals raised by the assessee in lead case, in ITA No.610/SRT/2018, for AY.2013-14, are as follows: "1.On the facts and in the circumstances of the case, as well as law on the subject, the Learned Income Tax Officer, Ward-1, Bardoli wrongly refered valuation of the agriculture land to DVO. 2.On the facts and in the circumstances of the case DVO Surat has erred in valuation of agriculture property @ Rs. 6.95 per sq. mtr as on 01/04/1981. Your assessee therefore prays that looking to the facts and circumstances of the case the addition made by the Income Tax Officer to the tune of Rs. 77,73,400/- may please be deleted. Your assessee further reserves his right to add, alter or to amend any of the aforesaid grounds at the time of hearing of an appeal." 4. The facts of the case which can be stated quite shortly are as follows: The assessee before us is an individual doing agricultural activities. He filed Return of Income for the year under consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100). 9.On appeal, the ld.CIT(A) confirmed the action of the Assessing Officer. Aggrieved, the assessee is in appeal before us. 10. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that solitary grievance of the assessee in this appeal is that assessing officer has adopted less fair market value of agricultural land, @ Rs. 6.95 per square meter, as compared to fair market value of assessee @ Rs. 180 per square meter, as on 01.04.1981.The assessing officer made addition by adopting less fair market value of agricultural land u/s 55A of the Act on the basis of valuation given by DVO. The assessee has sold an ancestral property at Palsana, Surat along with five other co-sellers on 26.03.2013 for a total sale consideration of Rs. 4,81,74,000/-. The assessee had taken the FMV as on 01.04.1981, @ Rs. 180/- per sq. mtr. on the basis of the Valuation report dated 08.01.2014 of the Govt. Approved Valuer, Shri P.K. Desai. The Assessing Officer re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Valuer) has not based his valuation on any scientific and objective basis by taking into consideration the relevant factors which have an important bearing on the valuation as on 01.04.1981. The ld Counsel further submits that the Registered Valuer (Assessee`s Valuer) had taken the various important factors, such as fertility of land, availability of water, infrastructure facility availability of labour etc. in his report and therefore the value adopted by the registered valuer is to be adopted rather than the value worked out by the DVO(Departmental Valuer). Besides, no opportunity was given to assessee to object or to challenge the report of DVO (Departmental Valuer), during appellate proceedings, therefore, ld CIT(A) has adopted one sided approach to adjudicate the assessee`s appeal. That is, the contention of the ld Counsel is that assessee was not provided sufficient opportunity to object or to challenge the valuation done by the DVO (Departmental Valuer), during the appellate proceedings, which is against the principle of natural justice. 14. We note that where the assessee objects before the assessing officer that value adopted by stamp valuation authority under section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act". Section 23A(1)(i) of the Wealth Tax Act provides that "Any person....... objecting to any order of the Valuation Officer under section 35 having the effect of enhancing the valuation of any asset or refusing to allow the claim made by the assessee under the said section ...............may appeal to the Commissioner (Appeals) against the assessment or order, as the case may be, in the prescribed form and verified in the prescribed manner ...". In effect thus, by the virtue of Section 23A(1)(i) being incorporated, with necessary modifications, in Section 50C, the correctness of a DVO's report can indeed be challenged. It is, however, also important to note that the provisions of Section 23A(6) of the Wealth Tax Act shall, with necessary modifications, also apply in the present context- as has been provided in Section 50C(2) itself. Section 23A(6) of the Wealth Tax Act provides as follows: (6) If the valuation of any asset is objected to in an appeal under clause (a) or clause (i) of sub-section (1), the Commissioner (Appeals) shall,- (a) in case wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee before us is an individual. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has sold a bungalow for Rs. 1,15,00,000 but the stamp duty valuation of the said bungalow, as evident from the sale deed, was Rs. 1,40,00,000. The assessee, however, contended that the fair market price of the property was much less than the stamp duty valuation, and, accordingly, a reference was made to the Departmental Valuation Officer under section 50C(2). The valuation as per DVO was Rs. 1,27,12,402. The assessee made elaborate submissions on incorrectness of this valuation, and submitted that the objections taken by him before the DVO were not properly dealt with. The Assessing Officer was of the view that the valuation done by the DVO binds him and it is his duty to pass an order in conformity with the DVO's report. He referred to, and relied upon, various judicial precedents in support of this proposition. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. Learned CIT(A) observed that "Section 50C of the Act is a deeming provision" and "a deeming provision is to be strictly applied without e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on report of DVO, after all, cannot be treated as the last word on valuation, and there has to be a grievance redressal mechanism against incorrectness of the DVO's valuation- particularly when the DVO has not properly disposed of the objections of the assessee. It is abundantly clear from the precedents cited above, that correctness of a DVO's report can be challenged by the assessee. We note that correctness of the DVO's report is to be examined on merits and there is no adjudication, on that aspect, by the CIT(A). Thus, Ld CIT(A) has to examine correctness of the DVO's report on merits after hearing both sides. Therefore, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh on merits, in accordance with the scheme of the law, after giving a due and reasonable opportunity of hearing to the assessee as well as DVO. 17. We have adjudicated the above issue by taking lead case in the case of Balubhai Chandubhai Patel, in ITA No.610/SRT/2018, for assessment year 2013- 14. Since the matter is same in case of other assessees therefore, our above decision would be applicable mutatis muta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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