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TMI Blog2024 (2) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... se the orders of lower authorities on this issue. - Shri Mahavir Singh, Vice President And Shri Manoj Kumar Aggarwal, Accountant Member For the Appellant : Shri N.Arjun Raj, CA (Amicus Curie) For the Respondent : Shri R. Clement Ramesh Kumar, CIT ORDER PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-2, Madurai in ITA No.010/2013-14 dated 08.08.2019. The assessment was framed by the Income Tax Officer, Ward-II(1), Madurai for the assessment year 2010-11 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter the Act ) vide order dated 14.03.2013. 2. The first issue on merits is as regards to assessment of capital gains. 3. Brief facts are that the assessee was the owner of 1/3rd of vacant land measuring 4840 sq.ft., located at old Door No.11/New Door No.44, Letangs Road, Purasawalkam, Chennai. The assessee declared capital loss in the return of income filed on 01.07.2010 for the assessment year 2010-11 of Rs. 87,57,468/- on sale of above property for a total sale consideration (for her 1/3rd share) of Rs. 41,94,664/- on 03.10.2009. The AO noted that he assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gher than the value determined by the DVO. The appellant had been caught on wrong footing by the Assessing Officer. It is trite law that the law passed by the legislature has to be given an constructive interpretation in a manner to achieve the purpose for which the legislation has been made and not in a manner to defeat the basic purpose of legislation. If the argument of the appellant ought to be accepted then the provisions for the purpose of computation of capital gains as contained under the Income Tax Act will fail and there will be cases of rampant evasion of capital gains. In my considered view, I hold that the provisions of the Act should be given a purposive construction was so as not to defeat the purpose for which it has been enacted. In view of the matter, I hold that the Assessing Officer has correctly computed the capital gains in case of the appellant and the assessment order does not require any interference. Accordingly, all the grounds taken by the appellant are dismissed. Aggrieved, assessee is in appeal before the Tribunal. 5. As none is present from assessee s side, we have requested Shri N. Arjun Raj, CA to represent as Amicus Curie in this case and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee also referred to the amendment made in section 55A(a) of the Act by the Finance Act, 2012 which is made effective from 01.07.2012 and the Parliament has not given retrospective effect to the amendment. Therefore, the amendment will not apply to the present assessment year i.e., 2010-11. He stated that this issue is also dismissed by the Hon ble Bombay High Court in the case of Puja Prints, supra. 7. On the other hand, the ld. Senior DR Shri P. Sajit Kumar made argument that there is no basis for the fair market value taken by the assessee as on 01.04.1981 at Rs. 21,08,688/-. According to him, there should be a reasonable basis or some evidence for the fair market value of this property as claimed by assessee. He also made submission that the fair market value of property as on 01.04.1981 cannot be more than the sale consideration received by the assessee at Rs. 41,94,664/-. He referred to the provisions of section 55A of the Act, that reference has to be made to DVO for the purpose of valuation and he rightly estimated the fair market value of the property. 8. We have heard rival contentions and gone through the facts and circumstances of the case. Admitted fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Departmental Valuation Officer only when the value adopted by the assessee was less than the fair market value. In the present case, it is an undisputed position that the value adopted by the respondent-assessee of the property at Rs. 35.99 lakhs was much more than the fair market value of Rs. 6.68 lakhs even as determined by the Departmental Valuation Officer. In fact, the Assessing Officer referred the issue of valuation to the Departmental Valuation Officer only because in his view the valuation of the property as on 1981 as made by the respondent-assessee was higher than the fair market value. In the aforesaid circumstances, the invocation of Section 55A(a) of the Act is not justified. 8 The contention of the revenue that in view of the amendment to Section 55A(a) of the Act in 2012 by which the words is less then the fair market value is substituted by the words is at variance with its fair market value is clarifactory and should be given retrospective effect. This submission is in face of the fact that the 2012 amendment was made effective only from 1 July 2012. The Parliament has not given retrospective effect to the amendment. Therefore, the law to be applied in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antial question of law. 8.1 Further, the amendment brought out by the Finance Act, 2012 w.e.f. 01.07.2012 in section 55A(a) of the Act, wherein in place of is less than its fair market value the substituted words are is at variance with its fair market value . The relevant provision reads as under:- 55A. Reference to Valuation Officer. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion that the value so claimed is at variance with its fair market value From the above provision, it is clear that where value of capital assets shown by the assessee being less than its fair market value, reference can only be made to DVO in that condition, but in case the value of capital asset shown is more than fair market value, reference cannot be made as held by Hon ble Bombay High Court in the case of Daulal Mohta (HUF), supra. In the present case, the assessee has decla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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