Baban L. Tingre (HUF), Pune V. Income-tax Officer,

ITA 1173/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2914 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 31-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 03-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBHASH K R
• Assessee Lawyers: AJAY R SINGH; RAMESH RAO
• Keywords: Value adopted by valuation officer; Retrospective amendment; Cost of acquisition; Fair market value; Valuation report
• Section: 54F; 148

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.530/PN/2014 '% % / ASSESSMENT YEAR : 2006-07 SHRI RAMESH LAXMAN TINGRE (HUF), SURVEY NO.36/2/2, ROAD NO.3, TINGRENAGAR, PUNE 411015. PAN NO.AAKHR7064R . / APPELLANT V/S ITO, WARD-2(3), PUNE . / RESPONDENT . / ITA NO.531/PN/2014 '% % / ASSESSMENT YEAR : 2006-07 SHRI ROHIDAS L. TINGRE (HUF), SURVEY NO.36/2/2, ROAD NO.3, TINGRENAGAR, PUNE 411015. PAN NO.AAKHR7063R . / APPELLANT V/S ITO, WARD-2(3), PUNE . / RESPONDENT . / ITA NO.1173/PN/2014 '% % / ASSESSMENT YEAR : 2006-07 SHRI BABAN L. TINGRE (HUF), SURVEY NO.36/2/2, ROAD NO.5, TINGRENAGAR, PUNE 411015. PAN NO.AAFHB5031H . / APPELLANT V/S ITO, WARD-2(3), PUNE . / RESPONDENT 2 ITA NOS.530, 531 AND 1173/2014 / APPELLANT BY : SHRI AJAY R. SINGH & SHRI RAMESH RAO / RESPONDENT BY : SHRI SUBHASH K.R. / ORDER PER R.K. PANDA, AM : THE ABOVE 3 APPEALS FILED BY THE RESPECTIVE ASSESSES AR E DIRECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A)-II, P UNE RELATING TO A.Y. 2006-07. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.530/PN/2014 ( SHRI RAMESH L. TINGRE) : 2. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THE TRIBUNA L. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 08-11-2006 DECLARED LONG TERM CAPITAL LOSS OF RS.1,04,12,335/-. DURING THE COURSE OF ASSESSMENT PROCEED INGS THE AO NOTED THAT THE ASSESSEE AFTER DEDUCTING THE COST O F SELLING AND INDEXED COST OF ACQUISITION DETERMINED THE NET SALE CONSIDE RATION AT RS.1,87,085/-. AFTER CLAIMING DEDUCTION U/S.54B AND 54F ON ACCOUNT OF INVESTMENT IN AGRICULTURAL LAND AND PURCHASE OF RESIDENTIAL HOUSE THE ASSESSEE HAD DECLARED LONG TERM CA PITAL LOSS OF RS.1,04,12,335/-. DURING THE COURSE OF ASSESSMENT PROCEED INGS THE AO ASKED CERTAIN DETAILS WHICH THE ASSESSEE PROVIDED. 3. SO FAR AS INDEXED COST OF ACQUISITION IS CONCERNED THE AO NOTED THAT THE ASSESSEE HAS ADOPTED RS.310/- PER SQ.M TR OF THE AGRICULTURAL LAND AS ON 01-04-1981. HE OBSERVED FROM THE VALUATION / DATE OF HEARING :11.01.2016 / DATE OF PRONOUNCEMENT:15.01.2016 3 ITA NOS.530, 531 AND 1173/2014 REPORT OF THE APPROVED VALUER FILED BY THE ASSESSEE THAT THE APPROVED VALUER HAS CITED 2 SALE INSTANCES. THE FIRST SALE INSTANCE PERTAINS TO A PLOT ADMEASURING 1091 SQ.MTRS LOCATED AT HADAPSAR WHI CH HAS BEEN REGISTERED IN PUNE DURING 1984 @ 298/- PER SQ.MTR. FOLLOWING THE REGRESSION METHOD BASED ON THE CIRCULAR OF TOWN PLAN NING AND VALUATION DEPARTMENT, PUNE AND VARIOUS CIRCULARS ISSUED FRO M TIME TO TIME THE APPROVED VALUER HAS ASSUMED REDUCTION OF PR ICE FROM 1984 TO 1981. HE FURTHER NOTED THAT THE FIRST INSTANCE IS A DEVELOPED PROPERTY WITHIN THE RANGE OF 6 TO 8 KMS FROM THE CENTRE IF PUNE RAILWAY STATION AND GPO ARE TAKEN AS REFERENCE POINT OF PUNE AGGLOMERATION. THE SECOND SALE INSTANCE COLLECTED BY THE APPROVED VALUER IS THE LAND DEVELOPED BY ARMY WELFARE ORGANISATION, N EW DELHI WHO HAD PURCHASED THE LAND NEAR PMC LIMIT IN MOHAMMA D WADI NEAR HADAPSAR. IN THIS CASE THE ORGANIZERS HAD CO NSTRUCTED THE FLAT ON THE LAND AND SOLD TO THE ARMY PERSONNEL ON N O-PROFIT AND NO-LOSS BASIS BEING WELFARE SCHEME. @ RS.110/- PER SQ.FT. OF BUILT UP AREA. AFTER APPLYING THE LAND AND BUILDING METHOD, APPROVE D VALUER CONSIDERED THE COST OF ACQUISITION AT RS.80/- PER SQ.FT. AT FSI ONE AND HAS DERIVED LAND RATE @ RS.30/- PER SQ.FT.I.E. RS.322.92 S Q.MTR OR SAY RS.325.00 PER SQ.MTR. HERE ALSO HE NOTED THAT TH E VALUE ARRIVED AT BY THE APPROVED VALUER IS OF DEVELOPED LAND. T HE AO NOTED FROM THE DOCUMENTS AND OTHER DETAILS FILED BY THE ASSESSEE THAT THE LAND TRANSFERRED BY HIM TO THE DEVELOPER/BUILDER IS AGRICULTURAL LAND AND NOT A DEVELOPED LAND LIKE THE ONES CIT ED BY THE APPROVED VALUER. THE AGRICULTURAL LAND TRANSFERRED BY THE ASSESSEE IS SITUATED AT TINGRENAGAR, VILLAGE DHANORI, TALUKA HAVELI, SUR VEY NO.36/2/2 AND IS SITUATED OVER 10 KMS AWAY FROM PUNE RA ILWAY STATION/GPO. HE DEPUTED THE WARD INSPECTOR TO THE OFFIC E OF THE LAND RECORDS TO PHYSICALLY VERIFY AND OBTAIN SOME SALE INS TANCES OF 4 ITA NOS.530, 531 AND 1173/2014 AGRICULTURAL LAND, PARTICULARLY THE TRANSACTIONS THAT HAVE TAKEN PLACE IN OR AROUND 1981, IN VILLAGE DHANORI, TINGRENAGAR. THE INS PECTOR REPORTED 5 SUCH SALE INSTANCES OF AGRICULTURAL LAND OF VILLA GE DHANORI BEARING VARIOUS SURVEY NOS. 1985/1986 AND RECORDED THE SALE PRICE PER SQ.MTR AT RS.10/- TO RS.20/-. THE AO NOTED THAT EV EN IF THE PRICE RATE PER SQ.MTR AT RS.20/- IS TAKEN AND AFTER APPL YING THE SAME REGRESSION METHOD AS DONE BY THE APPROVED VALUER THE VALUE PER SQ.MTR WOULD BE RS.15/- PER SQ.MTR AS ON 01-04-1981. HE , THEREFORE, REJECTED THE RATE OF RS.350/- PER SQ.MTR ADOP TED BY THE REGISTERED VALUER OF THE ASSESSEE. APPLYING THE RATE OF RS.15/- PER SQ.MTR IN CASE OF THE ASSESSEE, THE AO DETERMINED THE IND EXED COST OF ACQUISITION AT RS.7,30,131/-. AFTER DEDUCTING THE SAME F ROM THE NET SALE CONSIDERATION OF RS.1,52,76,378/-. THE AO DETERMINE D THE LONG TERM CAPITAL GAIN AT RS.1,45,46,250/-. 4. THE ASSESSEE APPROACHED THE CIT(A) WHO GAVE PART RELIEF. SUBSEQUENTLY, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIB UNAL AND THE TRIBUNAL VIDE ITA NOS.638 & 639/PN/2010 ORDER DATED 17-02- 2012 RESTORED THE ISSUE TO THE FILE OF THE CIT(A) WITH A DIR ECTION TO DECIDE THE ISSUE AFRESH BY OBSERVING AS UNDER : 3. WE HAVE EXAMINED THE GROUNDS AND THE FACTS AVAIL ABLE ON RECORDS AND FIND THAT THE INFORMATION FURNISHED NOW W ILL HELP BRINGING NEW PRIMARY EVIDENCES REQUIRED FOR THE ADMINISTRATION OF JUSTICE. LD DR FOR THE REVENUE FIND MERITS IN THE ABOVE ARGUMENT OF THE ASSESSEES COUNSEL. CONSIDERING THE IMPORTANCE OF THE SAID ADDIT IONAL EVIDENCE, WE ARE OF THE OPINION THE SAME SHOULD BE ADMITTED AND T HE MATTER SHOULD BE RESTORED TO THE FILES OF THE LD. CIT (A). THE FIR ST APPELLATE AUTHORITY SHALL ADMIT THE SAME AND ADJUDICATE THE ISSUE AFRESH IN BOTH THE CASES AFTER UTILIZING THE FACTS EMANATING FROM SAID ADDITIO NAL EVIDENCES. THE LD. CIT (A) SHALL GRANT REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE WHILE ADJUDICATING THE SAME AND AT THE TIME OF PASSING A SPEAKING ORDER AS PER THE PROVISIONS OF SEC.250 SUB-SECTIO N (6) OF THE ACT. ACCORDINGLY THE GROUNDS ARE SET ASIDE. 5 ITA NOS.530, 531 AND 1173/2014 5. SUBSEQUENTLY, THE CIT(A) DIRECTED THE AO TO ADOPT TH E VALUE @ RS.75/- PER SQ. MTR WHICH WAS THE VALUE DETERMINED BY TH E DVO. IT MAY BE PERTINENT TO MENTION HERE THAT WHILE PASSING THE ASSESSMENT ORDER THE REPORT OF THE DVO WAS NOT AVAILABLE ALTHOUGH T HE MATTER WAS REFERRED TO THE DVO BY THE AO. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. ALTHOUGH THE ASSESSEE HAS TAKEN A NU MBER OF GROUNDS, THE LD. COUNSEL FOR THE ASSESSEE CONFINED HIS ARG UMENTS TO GROUND OF APPEAL NO.5 ONLY AND DID NOT PRESS THE OTHER GROUNDS. IN ABSENCE OF ANY OBJECTION FROM THE LD. DEPARTMENTAL REPRE SENTATIVE, THE OTHER GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED AS NOT PRESSED. 7. SO FAR AS GROUND OF APPEAL NO.5 IS CONCERNED THE SAME READS AS UNDER : 5. THE LD.CIT(A) FAILED TO APPRECIATE THAT THE ASSESSI NG OFFICER HAD NO JURISDICTION TO MAKE A REFERENCE TO GOVERNMENT VA LUER U/S.55A OF THE ACT FOR DETERMINATION OF FAIR MARKET VALUE FOR COMPUTING CAPITAL GAIN WHEN THE VALUE OF ASSET DISCLOSED IN THE RETURN IS MORE THAN ITS FAIR MARKET VALUE AS ON 01-04-1981. 8. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE DE CISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PUJA P RINTS REPORTED IN 360 ITR 697 SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT AMENDMENT TO SECTION 55A (A) OF THE ACT IN 2012 BY WHICH THE WORDS IS LESS THAN ITS FAIR MAR KET VALUE WERE SUBSTITUTED BY THE WORDS IS AT VARIANCE WITH ITS FA IR MARKET VALUE WAS MADE EFFECTIVE ONLY FROM JULY 1 ST , 2012. PARLIAMENT HAS NOT GIVEN RETROSPECTIVE EFFECT TO THE AMENDMENT. THEREFO RE, THE LAW HAS TO BE APPLIED IN THE ASSESSEES CASE WAS SECTION 55 A(A) AS EXISTING DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR 6 ITA NOS.530, 531 AND 1173/2014 2006-07. AT THE RELEVANT TIME, VERY CLEARLY, REFERENCE CO ULD BE MADE TO THE DEPARTMENTAL VALUATION OFFICER ONLY IF THE VALUE DEC LARED BY THE ASSESSEE WAS IN THE OPINION OF THE AO IS LESS THAN ITS FAIR MARKET VALUE. HE SUBMITTED THAT THE HONBLE BOMBAY HIGH COURT WHILE PASSING THIS DECISION HAS FOLLOWED ITS EARLIER DECISION IN THE C ASE OF CIT VS. DAULAL MOHTA (HUF) REPORTED IN 360 ITR 680. 9. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIB UNAL IN THE CASE OF ITO VS. SMT. VIJAYA CHANDRAKANT TUPE AND OTHER CONNECTED APPEALS VIDE ITA NO.1129/PN/2013 TO 1131/PN/ 2013 ORDER DATED 27-08-2014 HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HAS DISMISSED THE APPEAL FILED BY THE REVENUE AND UPHELD THE ORDER OF THE CIT(A) WHEREIN THE CIT(A) HAD DELETED TH E ADDITION MADE BY THE AO BY ACCEPTING THE ASSESSEES CONTENTION THAT NO REFERENCE COULD BE MADE BY THE AO IF THE VALUE DECLARED BY THE ASSESSEE IS MORE THAN THE FAIR MARKET VALUE. HE ACCORDIN GLY SUBMITTED THAT SINCE IN THE INSTANT CASE THE FAIR MARKET VALUE DECLARED BY THE ASSESSEE IS MORE THAN THE FAIR MARKET V ALUE OF THE AGRICULTURAL LAND, THEREFORE, THE AO HAD NO JURISDICTION TO R EFER THE MATTER TO THE DVO. HE ACCORDINGLY SUBMITTED THAT THIS BEING A COVERED MATTER THE ORDER OF THE CIT(A) SHOULD BE SET AS IDE AND THE GROUND RAISED BY THE ASSESSEE SHOULD BE ALLOWED. 10. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE AO AND THE CIT(A). HE SUBMITTED THAT THE ASSESSEE BY ADOPTING HIGHER VALUE AS ON 01-04 -1981 IS TRYING TO INFLATE THE INDEXED COST OF ACQUISITION AND THER EBY REDUCING THE TAXABLE CAPITAL GAIN. THE DVO HAD DETERMINED THE VALUE OF THE LAND AT RS.75/- PER SQ. MTR WHEREAS THE REGISTERED VALUE R OF THE ASSESSEE HAS DETERMINED THE SAME AT RS.310/- PER SQ. M TR WHICH IS 7 ITA NOS.530, 531 AND 1173/2014 VERY HIGH AND IT IS JUST TO REDUCE THE TAXABLE CAPITAL GA IN. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UP HELD AND THE GROUND RAISED BY THE ASSESSEE SHOULD BE DISMISSED. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE. TH ERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE IN THE INSTANT CA SE HAS DETERMINED THE COST OF ACQUISITION OF AGRICULTURAL LAND AS ON 01-04- 1981 AT RS.310/- PER SQ. MTR AS DETERMINED BY THE REGIS TERED VALUER. WE FIND THE DVO IN THE INSTANT CASE HAS DETERMIN ED THE VALUE OF THE LAND AT RS.75/- PER SQ. MTR AS ON 01-04-198 1. IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE VALUE ADOPTED BY THE ASSESSEE IS MORE THAN THE FAIR MARKET V ALUE, THEREFORE, THE AO HAS NO AUTHORITY TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SMT. VIJAYA CHANDRAKANT TUPE AND OTHER CONNECTED APPEALS (SUPRA). THE TRIBUNAL DECIDED THE ISSUE IN FAOVUR OF THE ASSESSEE AND AGAINST THE REVENUE BY HOLDING THAT THE AO CANNOT MAKE A REFER ENCE TO THE DVO IF THE VALUE DECLARED BY THE ASSESSEE IS MORE THAN T HE FAIR MARKET VALUE. THE RELEVANT OBSERVATION OF THE TRIBUNAL FRO M PARA 2.3 ONWARDS READ AS UNDER : 2.3 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MATE RIAL ON RECORD, WE FIND THAT THE ISSUE BEFORE US IS WITH REGAR D TO VALUATION ADOPTED BY THE ASSESSEE AS ON 01.04.1981 ON THE BASIS OF REPORT OF GOVT. APPROVED VALUER AND DELETION OF ADDITION BY THE CIT (A) BY ACCEPTING THE CONTENTION OF THE ASSESSEE THAT NO REFERENCE COULD BE M ADE BY THE ASSESSING OFFICER IF VALUE DECLARED BY THE ASSESSEE AS ON 01 .04.1981 ON THE BASIS OF REPORT OF THE GOVERNMENT APPROVED VALUER IS MORE THAN F.M.V. THE ASSESSEE IS AN INDIVIDUAL AND DURING THE YEA R UNDER CONSIDERATION HAD DISCLOSED LONG TERM CAPITAL GAIN ON SALE OF PROPERTY. THE DATE WISE RELEVANT DETAILS IN CHRONOLOGICAL ORDER ARE AS UNDER:- 8 ITA NOS.530, 531 AND 1173/2014 A) RETURN OF INCOME DECLARING INCOME RS. 349460/- FILED ON 31.07.2007; B) F.M.V OF THE PROPERTY AS ON 1.04.1981 AS PER GOVT. AP PROVED VALUER REPORT AT RS. 32,85,000/-; C) DATE OF NOTICE U/SEC. 148 WAS ISSUED ON 25.01.2011; D) F.M.V. AS ON 1.04.1981 ADOPTED BY THE ASSESSING OFFICER ON THE BASIS OF REPORT OF DVO OBTAINED IN THE CASE OF OTHER PERSON AT RS. 5,92,471/- AND E) CAPITAL GAIN ASSESSED BY THE ASSESSING OFFICER AT RS. 1,39, 25,210/- 2.4 THE ASSESSEE SOLD THE ANCESTRAL PROPERTY SITUATED HADP ASAR AT RS.159,29,250/-. SINCE THE PROPERTY WAS HELD PRIOR TO 01.04.1981, THE ASSESSEE GOT THE VALUATION AS ON 01.04.1981 FROM THE GOV ERNMENT APPROVED VALUER, WHO HAS CERTIFIED THE VALUATION AS O N 01.04.1981 AT RS.32,85,000/-. ACCORDINGLY THE ASSESSEE COMPUTED THE L ONG TERM CAPITAL GAIN AT RS.173,44,985/- AND CLAIMED EXEMPTI ON U/S.54B & 54C AMOUNTING TO RS.173,94,000/-. THE ASSESSING OFFICER DID NOT AGREE WITH THE VALUATION AS PER GOVT. APPROVED VALUER SUBMITTED BY THE ASSESSEE. THE ASSESSING OFFICER ADOPTED THE VALUATION REPORT OF T HE DEPARTMENTAL VALUATION OFFICER, SOLAPUR IN RESPECT OF SOME OTHER L AND WHO VALUED THE LAND AT RS.101/- PER SQ. MTR. AND ACCORDINGLY THE ASSESSI NG OFFICER HAS CONSIDERED THE COST OF LAND IN THE HANDS OF THE ASSESSEE A T RS.5,92,471/- AND COMPUTED THE CAPITAL GAIN AT RS. 313,19,210/- AF TER TAKING INTO ACCOUNT EXEMPTION AT RS.173,94,000/- AND MADE THE AD DITION OF RS. 139,25,210/-. WHILE DOING SO, THE ASSESSING OFFICER HAS NOT GIVEN THE COPY OF THE REPORT OF THE DVO TO THE ASSESSEE AND THERE FORE HE RELIED UPON THE REPORT OF THE DVO UNILATERALLY. MOREOVER, THE DVO REPORT WAS OBTAINED IN THE CASE OF GORAKH MARUTI TUPE & OTHERS AND IS IN RESPECT OF THE PROPERTY WHICH IS ALTOGETHER DIFFERENT FROM THE PROPERTY SOLD BY THE ASSESSEE. THE FIRST APPELLATE AUTHORITY ON DUE EXAMINAT ION OF THE FACTS AND BOTH FACTUAL AND LEGAL SUBMISSION FURNISHED BY THE ASSESSEE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER VIDE PARA 4 TO 4.6 OF HIS ORDER. 2.5 WE FIND THAT THE STAND OF THE ASSESSEE HAS BEEN THAT THE ASSESSING OFFICER HAS NO POWER TO RELY ON THE REPORT OF THE D.V.O. OBTAINED IN THE CASE OF OTHER PERSON. AS PER PROVISIO NS OF SECTION 55A OF THE ACT, AS WAS ON THE STATUTE PRIOR TO 01.07.2012, THE ASSESSING OFFICER HAS NO POWER TO MAKE A REFERENCE TO THE DVO, UNLESS AN D UNTIL THE VALUATION ADOPTED BY THE ASSESSEE WAS LESSER THAN THE VALU E WHAT ASSESSING OFFICER BELIEVES TO BE. A SIMILAR VIEW HAS BEEN TAKEN IN THE FOLLOWING CASES:- A) CIT VS. DAULAL MOHTA HUF (2014) 360 ITR 680 (BOM). B) CIT VS. RAMANKUMAR SURI (255 CTR 257) C) CIT V PUJA PRINTS (2014) 360 ITR 697 (BOM). D) M.V. SHAH, OFFICIAL LIQUIDATOR, ANANT MILLS LTD VS. U . J. MATAIN & ANR. (1994) 209 ITR 568 (GUJ). 9 ITA NOS.530, 531 AND 1173/2014 E) ITAT PUNE BENCH IN THE CASE OF KRISHNABAI TINGRE VS. I TO 101 ITD 317 2.6 IN THIS REGARD, THE STAND OF THE ASSESSEE HAS BEEN THA T THE ASSESSING OFFICER HAS NOT DOUBTED OR CHALLENGED THE VALU ATION REPORT OF THE APPROVED VALUER AS PROVIDED BY THE ASSESSEE AND REFE RRED TO BY THE ASSESSING OFFICER. THUS, THERE IS NO REFERENCE TO VALUAT ION OFFICER BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT EVEN FORME D AN OPINION AS CONTEMPLATED BY SECTION 55A OF THE ACT. THE FMV A S ON 01.04.1981 ADOPTED BY THE ASSESSEE IS BASED UPON THE VALUATION REPOR T OF THE REGISTERED APPROVED VALUER. THE VALUE ADOPTED BY TH E ASSESSEE IS NOT LESS THAN THE VALUATION ADOPTED BY THE ASSESSING OFFICER. WE FIND THAT ITAT, PUNE IN THE CASE OF ITO VS. SANGEETA JEEVAN BHO SALE IN ITA NO.1125/PN/2012 DATED 30.05.2014 AND IN THE CASE OF RAMDAS SONBA TUPE VS. ITO IN ITA NO.534/PN/2013 DATED 08.07.2014 HAS HELD AS UNDER: 6. IN THE CASE OF PUJA PRINTS (SUPRA) THE HON'BLE HIG H COURT HAS EXAMINED THE POWERS OF THE ASSESSING OFFICER FOR MAKING THE REFERENCE U/S. 55A OF THE ACT AS WELL AS THE AMENDMENT MADE TO SEC. 55A (A) AND HELD AS UNDER: 7. WE FIND THAT S. 55A(A) OF THE ACT VERY CLEARLY AT THE RELEVANT TIE PROVIDED THAT A REFERENCE COULD BE MAD E TO THE DVO ONLY WHEN THE VALUE ADOPTED BY THE ASSESSEE WAS LESS THAN THE FAIR MARKET VALUE. IN THE PRESENT CASE, IT IS AN UNDI SPUTED POSITION THAT THE VALUE ADOPTED BY THE RESPONDENT-ASSES SEE 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 TH E DVO. IN FACT, THE AO REFERRED THE ISSUE OF VALUATION TO THE D VO ONLY BECAUSE IN HIS VIEW THE VALUATION OF THE PROPERTY AS O N 1981 AS MADE BY THE RESPONDENT-ASSESSEE WAS HIGHER THAN THE FAIR MARKET VALUE. IN THE AFORESAID CIRCUMSTANCES, THE INV OCATION OF S. 55A(A) OF THE ACT IS NOT JUSTIFIED. 8. THE CONTENTION OF THE REVENUE THAT IN VIEW OF TH E AMENDMENT TO S. 55A(A) OF THE ACT IN 2012 BY WHICH T HE WORDS IS LESS THAN THE FAIR MARKET VALUE ARE SUBSTITUTED BY THE WORDS IS AT VARIANCE WITH ITS FAIR MARKET VALUE IS CLARI FIACTORY AND SHOULD BE GIVEN RETROSPECTIVE EFFECT. THIS SUBMISSION IS IN FACE OF THE FACT THAT THE 2012 AMENDMENT WAS MADE EFFECTI VE ONLY FROM 1 ST JULY, 2012. THE PARLIAMENT HAS NOT GIVEN RETROSPEC TIVE EFFECT TO THE AMENDMENT. THEREFORE, THE LAW TO BE APPLIED IN THE PRESENT CASE IS S. 55A(A) OF THE ACT AS EXISTING DURING T HE PERIOD RELEVANT TO THE ASST. YR. 2006-07. AT THE RELEVANT TI ME, VERY CLEARLY REFERENCE COULD BE MADE TO DVO ONLY IF THE VALUE DECLARED BY THE ASSESSEE IS IN THE OPINION OF AO LESS THAN ITS FAIR MARKET VALUE. 9. THE CONTENTION OF THE REVENUE THAT THE REFERENCE TO THE DVO BY THE AO IS SUSTAINABLE IN VIEW OF S. 55A(A)(II) [ 55A(B)(II)] OF THE ACT IS NOT ACCEPTABLE. THIS IS FOR THE REASON TH AT S. 55A(B) OF THE ACT VERY CLEARLY STATES THAT IT WOULD APPLY I N ANY OTHER CASE I.E. A CASE NOT COVERED BY S. 55A(A) OF THE ACT. IN T HIS CASE, IT IS AN UNDISPUTABLE POSITION THAT THE ISSUE IS COVERED BY S. 55A (A) OF THE ACT. THEREFORE, RESORT CANNOT BE HAD TO THE RESID UARY CLAUSE 10 ITA NOS.530, 531 AND 1173/2014 PROVIDED IN S. 55A(B)(II) OF THE ACT. IN VIEW OF THE ABOVE, THE CBDT CIRCULAR DT. 25TH NOV., 1972 CAN HAVE NO APPLI CATION IN THE FACE OF THE CLEAR POSITION IN LAW. THIS IS SO AS THE UND ERSTANDING OF THE STATUTORY PROVISIONS BY THE REVENUE AS FOUND IN CIRCULAR ISSUED BY THE CBDT IS RIOT BINDING UPON THE ASSESSEE AND I T IS OPEN TO AN ASSESSEE TO CONTEND TO THE CONTRARY. 7. IN THE CASE OF HIABEN JAYANTILAL SHAH (SUPRA) THE HON'BLE GUJARAT HIGH COURT HAS HELD AS UNDER: 10. UNDER CL. (A) OF S. 55A OF THE ACT THE AO IS ENTI TLED TO MAKE THE REFERENCE TO THE VALUATION OFFICER IN A CASE WHE RE THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MADE BY THE REGISTERED VALUER, IF THE AO IS OF THE OPINION THAT THE VALUE SO CLAIMED IS LESS THAN THE FAIR MARKET VALUE. IN ANY OTHER CASE, AS PROVIDED UNDER CL. (B) OF S. 55A OF THE ACT, THE AO HAS TO RECORD AN OPINION THAT (I) THE FA IR MARKET VALUE OF THE ASSET EXCEEDS THE VALUE OF THE ASSET AS CLAIMED B Y THE ASSESSEE BY MORE THAN SUCH PERCENTAGE OR BY MORE THAN SU CH AN AMOUNT AS MAY BE PRESCRIBED; OR (II) HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS NEC ESSARY TO MAKE SUCH A REFERENCE. 11. AS CAN BE SEEN FROM THE COMMUNICATION DATED NIL ( ANNEX. D) FROM RESPONDENT NO. 2 DVO TO THE PETITIONER INSO FAR AS THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1ST APRIL, 19 81 IS CONCERNED, THE PETITIONER HAD CLAIMED THE SAME AT A SUM OF RS.6,25,000 AS PER REGISTERED VALUER'S REPORT. THEREFOR E, THE AO WAS REQUIRED TO FORM AN OPINION THAT THE VALUE SO CLA IMED IS LESS THAN THE FAIR MARKET VALUE. THE ESTIMATED VALUE PROP OSED BY THE DVO IS SHOWN AT RS.3,97,000, WHICH IS LESS THAN THE FAIR MARKET VALUE SHOWN BY THE ASSESSEE AS ON 1ST APRIL, 1981. THEREF ORE, CL. (A) OF S. 55A OF THE ACT CANNOT BE MADE APPLICABLE. CLAUSE (B) OF S. 55A OF THE ACT CAN BE INVOKED ONLY IN ANY OTHER CASE , NAMELY WHEN THE VALUE OF THE ASSET CLAIMED BY THE ASSESSEE IS NO T SUPPORTED BY AN ESTIMATE MADE BY A REGISTERED VALUER. IN THE FACTS OF THE PRESENT CASE, CL. (B) OF S. 55A OF THE AC T ALSO CANNOT BE INVOKED. THEREFORE, THERE IS NO QUESTION OF HAVING RE COURSE TO SUB-CL. (II) OF CL. (B) OF S. 55A OF THE (ACT. 12. THERE IS ONE MORE ASPECT OF THE MATTER. FOR INVOK ING S. 55A OF THE ACT, THERE HAS TO BE A CLAIM MADE BY THE ASSESSEE, BEFORE THE AO CAN RECORD OPINION EITHER UNDER CL. ( A) OR CL. (B) OF S. 55A OF THE ACT TO MAKE A REFERENCE TO THE VALUATI ON OFFICER. THE FACTS OF THE PRESENT CASE GO TO SHOW THAT THE REFERENCE WAS MADE ON 26TH APRIL, 1996, WHEREAS, THE RETURN OF INCOME H AD BEEN FILED BY THE ASSESSEE ONLY ON 27TH AUG., 1996. HENCE, O N THE DATE OF MAKING THE REFERENCE BY THE AO, NO CLAIM WAS MADE BY THE ASSESSEE AND THE AO COULD NOT HAVE FORMED ANY OPINION A S TO EXISTENCE OF PRESCRIBED DIFFERENCE BETWEEN THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE AND THE FAIR MARKET VALUE. T HEREFORE ALSO, PROVISIONS OF S. 55A OF THE ACT COULD NOT HAVE B EEN RESORTED TO BY THE AO. 8. IN OUR OPINION, THE ASSESSING OFFICER HAS NO POWER TO MAKE THE REFERENCE TO THE DVO FOR THE A.Y. 2007-08 BY INVOKI NG U/S. 55A OF THE INCOME-TAX ACT FOR DETERMINING FAIR MARKET VALUE AS ON 01-04-1981 ON 11 ITA NOS.530, 531 AND 1173/2014 THE OPINION THAT FMV MUST BE LESS THAN AS DECLARED BY THE ASSESSEE. MOREOVER, THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE JURISDICTIONAL HIGH COURT. WE, THEREFORE, FIND NO R EASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). ACCORDINGLY, CON FIRM THE SAME AND GROUNDS TAKEN BY THE REVENUE ARE DISMISSED. 3. NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLEDG E ON BEHALF OF THE REVENUE. IN VIEW OF ABOVE, WE ARE NOT INCLI NED TO INTERFERE WITH THE FINDING OF CIT(A) WHO HAS DELETED THE ADDITION M ADE BY THE ASSESSING OFFICER BY ACCEPTING THE ASSESSEES CONTENTION THA T NO REFERENCE COULD BE MADE BY THE ASSESSING OFFICER IF THE VALUE DECLARED BY THE ASSESSEE IS MORE THAN THE FAIR MARKET VALUE. WE UPHOLD THE SAME. 12. SINCE THE FACTS IN THE INSTANT CASE ARE IDENTICAL TO T HE FACTS OF THE CASE DECIDED BY THE TRIBUNAL CITED (SUPRA), THEREFORE, FO LLOWING THE ABOVE DECISION OF THE TRIBUNAL AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE HOLD THAT THE AO HAS NO JURISDICTION TO REFER THE MATTER TO THE DVO FOR DETERMINA TION OF THE VALUE SINCE THE VALUE DECLARED BY THE ASSESSEE IS MORE THAN THE FAIR MARKET VALUE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUN D RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. ITA NO.531/PN/2014 (SHRI ROHIDAS L. TINGRE) : ITA NO.1173/PN/2014 (SHRI BABAN L. TINGRE : 13. ALTHOUGH VARIOUS GROUNDS HAVE BEEN RAISED BY THE A BOVE ASSESSES IN THE GROUNDS OF APPEAL, THE LD. COUNSEL FOR THE ASSESSEE PRESSED ONLY GROUND OF APPEAL NO.5 IN THE ABOVE APPEALS WHICH IS IDENTICAL TO GROUND OF APPEAL NO.5 IN ITA NO.530/PN/2014. WE HAVE ALREADY DECIDED THE ISSUE AND HELD THAT THE AO HAS NO JURISDICTION TO MAKE A REFERENCE TO DVO U/S.55A OF THE ACT FOR DETERMINA TION OF FAIR MARKET VALUE FOR COMPUTING THE CAPITAL GAIN WHEN THE VALUE OF ASSET DISCLOSED IN THE RETURN IS MORE THAN ITS FAIR MARKET VALUE AS ON 01-04-1981. FOLLOWING THE SAME REASONINGS, THE GROUND OF APPEAL NO.5 IN THE ABOVE APPEALS IS ALLOWED. THE OTHER GROUNDS WERE NOT 12 ITA NOS.530, 531 AND 1173/2014 PRESSED BY LD. COUNSEL FOR THE ASSESSEE FOR WHICH THOSE GROUNDS ARE DISMISSED. 14. IN THE RESULT, ALL THE 3 APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-01-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 15 TH JANUARY 2016. LRH'K ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT (A) - I I , PUNE 4. 5. 6. CIT-II, PUNE ' *, *, IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , ' //TRUE COPY// / * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE