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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 ..... eport of Shri Ramesh Jain, submitted by the assessee and he must have disposed of the objections of the assessee in respect of DVO report, but he has failed to do so therefore it is against the principle of natural justice. Valuation 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. - ITA No. 610 to 615/SRT/2018 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer that assessee has sold an ancestral immovable property admeasuring 25900 square meters, situated at Block No. 54, R.S. No. 82 and 92 at Antholi, Tal Palsana, Dist. Surat, on 26.03.2013, along with other five co-sellers for a sale consideration of ₹ 4,81,74,000/-. As the assessee has shown value of property at the rate of ₹ 180/- per sq. meter, as on 01.04.1981, which has been considered by very assessing officer very higher side. Therefore, matter of valuation was referred to the D.V.O., Surat on 26.11.2015 by the assessing officer under section 55A(a) of the Income Tax Act for determination of valuation of the property in question as on 01.04.1981. 5.The DVO, Surat has furnished the Valuation Report of property as on 01.04.1981 at ₹ 6.95 per square meter, vide report of DVO dated 24.02.2016. 6.As there was difference in valuation of said immovable property, (as per assessee it was at ₹ 180 per square meter, whereas as per DVO it was at ₹ 6.95 per square meter, as on 01.04.1981), therefore, the Assessing Officer issued a show-cause notice dated 29.02.2016 to the assessee, stating that why not the immovable property should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's share). The Assessing Officer after taking into the Index cost of acquisition and deduction under section 54B of the Act, calculated the LTCG at ₹ 61,52,225/-. 11.Shri P.M. Jagasheth, Learned Counsel for the assessee submits before the Bench that the reference made by the Assessing Officer to the DVO, under section 55A of the Act is erroneous. The ld Counsel contended that the report of the DVO is defective and biased, as the DVO in case of other assessees, had given a valuation report of the villages near to assessee`s village in which DVO had given the FMV @ ₹ 229/- and ₹ 251/-, while in assessee`s case DVO has given FMV @₹ 6.95/-The ld Counsel contended that the sales instances taken by the DVO is not comparable, besides, the valuation report of valuer of Shri Ramesh Jain, which is placed on paper book page No. 17, has not been considered by the ld CIT(A). The ld Counsel also contended that assessee has right to challenge the DVO report, however, the opportunity to challenge the DVO report was neither given by assessing officer not by ld CIT(A), therefore, ld Counsel prayed the Bench that matter may be remitted back to the file of the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efer question of valuation of capital asset to DVO in accordance with section 55A of the Act, in this regard, the reliance can be placed on the judgment of the Hon`ble High Court of Allahabad in the case of Chandra Narain Chaudhri,[2013] 38 taxmann.com 275 (Allahabad), wherein it was held as follows: 14. We are of the view that whenever objection is taken or claim is made before AO, that the value adopted or assessed or assessabe by the Stamp Valuation Authority under sub-section (1) of Section 50-C exceeds the fair market value of the property on the date of transfer, the AO has to apply his mind on the validity of the objection of the assessee. He may either accept the valuation of the property on the basis of the report of the approved valuer filed by the assessee, or invite objection from the department and refer the question of valuation of the capital asset to DVO in accordance with Section 55-A of the Act. In all these events, the AO has to record valid reasons, which are justifiable in law. He is not required to adopt an evasive approach of applying deeming provision without deciding the objection or to refer the matter to the DVO under Section 55-A of the Act as a mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this behalf by the Assessing Officer, give an opportunity of being heard to any Valuation Officer nominated for the purpose by the Assessing Officer. 6. Section 24(5) of the Wealth Tax Act, 1957, the scheme of which also stands incorporated in Section 50C as is specifically stated therein, provides as follows: (5) The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and any such orders may include an order enhancing the assessment or penalty : Provided that if the valuation of any asset is objected to, the Appellate Tribunal shall,- (a) in a case where such valuation has been made by a Valuation Officer under section 16A, also give such Valuation Officer an opportunity of being heard; (b) in any other case, on a request being made in this behalf by the 51[Assessing Officer], give an opportunity of being heard also to any Valuation Officer nominated for the purpose by the Assessing Officer 7. What essentially follows from the above provision is that in the event of the correctness of the DVO s report is called into question in an appeal before the Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no interference is thus called for. The assessee is not satisfied and is in further appeal before us. He is once again challenging the correctness of the DVO s report, is pointing out, what he perceives as, glaring errors in the methodology adopted by the DVO and is submitting that the CIT(A) fell in error in not adjudicating upon the same on merits. 10. In view of our analysis of the legal provisions earlier in this order, the assessee is indeed correct, even though somewhat serendipitously that the CIT(A) ought to have examined the matter on merits. Of course, before doing so, the CIT(A) was under a statutory obligation to serve notice of hearing to the DVO and thus afford him an opportunity of hearing. Clearly, learned CIT(A) took too narrow and somewhat superficial a view of his powers under the scheme of the law, and the assessee did not point out the specific legal provisions to him either. Be that as it may, the fact remains 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). In view of these discussions, as also bearing in mind entirety of the case, we deem it fit and proper to remit the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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