Smt. Minakshi D. Ghule, Pune V. Income-tax Officer,

ITA 1761/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1607 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 24-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Search and seizure; Cost of acquisition; Fair market value; Difference of opinion; Valuation report; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 50C; 148; 11

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 176 4 /PN/201 4 / ASSESSM ENT YEAR : 20 0 5 - 0 6 SMT. SANGEETA SANJAY GHULE, M/S. MZSK & ASSOCIATES CHARTERED ACCOUNTANTS, LEVEL 3, RIVERSIDE BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 . / APPELLANT PAN: A IUPG322 7B VS. THE INCOME TAX OFFICER, WARD 1 ( 3 ), PUNE . / RESPONDENT . / ITA NO. 1761 /PN/201 4 / ASSESSMENT YEAR : 20 05 - 06 SMT. MINAKSHI D. GHULE, M/S. MZSK & ASSOCIATES CHARTERED ACCOUNTANTS, LEVEL 3, RIVERSIDE BUSINESS BAY, PLOT NO.84, WELLESL EY ROAD, NEAR RTO, PUNE 411001 . / APPELLANT PAN: AIUPG3226A VS. THE INCOME TAX OFFICER, WARD 1(3), PUNE . / RESPONDENT / APPELLANT BY : SHRI NEELESH KHANDELWAL / RESPONDENT BY : SHRI HITENDRA NINAWE ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 2 / DATE OF HEARING : 2 9 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 30 . 0 6 .201 6 / ORDER PER SUSHMA CHOWLA, J M : BOTH THE APPEAL S FILED BY DIFFERENT ASSESSEE S ARE AGAINST SEPARATE ORDER S OF CIT (A) - I , PUNE , BOTH DATED 30 . 0 6 .20 1 4 RELATING TO ASSESSMENT YEAR 20 0 5 - 0 6 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 14 3(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . BOTH THE APPEALS RELATING TO DIFFERENT ASSESSEES ON SIMILAR ISSUE WER E HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, REFERENCE IS BEING MADE TO THE FACTS IN ITA NO.1764/PN/2014 TO ADJUDICATE THE ISSUE. NO.1764/PN/2014 TO ADJUDICATE THE ISSUE. 3. THE ASSESSEE IN ITA NO.1764/PN/2014 HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL: - 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, RESORTING TO THE PROVISIONS OF SEC. 148/147 INSTEAD OF PROVISIONS OF SEC. 153C BY THE AO FOR REOPENING THE ASSESSMENT IS IMPROPER, ERRONEOUS, CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FRAMED BY THE AO & THAT CONFIRM ED BY THE 1 ST APPELLATE AUTHORITY U/S. 143(3) R.W.S 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 2. WITHOUT PREJUDICE TO GROUND N O .1, IT BE HELD THAT ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVI SIONS & SCHEME OF THE ACT IT BE HELD THAT, RESORTING TO THE PROVISIONS OF SEC. 148/147 BY THE AO FOR REOPENING THE ASSESSMENT IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESUMING THE JURISDICTION IN TERMS OF PROVISIONS OF SEC.147. IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FRAMED BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY U/S.143(3) R.W.S 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROP ER RELIEF IN THIS RESPECT. ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 3 3. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THAT AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, RESORTING TO THE PROVISIONS OF SEC. 148/147 BY THE AO FOR REOPENING THE ASSESSMENT ON THE BASIS OF DEPARTMENT VALUATION OFFICER IN CASE OF ANOTHER ASSESSEE IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESUMING THE JURISDICTION IN TERMS OF PROVISIONS OF SEC. 147. IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FRAMED BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY U/S. 143(3) R.W.S 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 4. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CA SE THAT AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, IT BE HELD THAT, LONG TERM CAPITAL GAIN WORKED OUT BY THE AO IN PLACE OF THAT WORKED OUT BY THE APPELLANT IS IMPROPER, ERRONEOUS, CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN T HE CASE. THE LONG TERMS CAPITAL LOSS AS WORKED OUT BY THE APPELLANT OF RS.8,685/ - SHOULD HAVE BEEN ADMITTED AND ALLOWED IN PLACE OF LONG TERMS CAPITAL GAIN WORKED OUT BY THE AO AT RS.4,72,875/ - . IT MAY FURTHER BE HELD THAT REJECTING THE VALUATION REPORT IS SUED BY A GOVERNMENT APPROVED VALUER AND FRESH REFERENCE TO DEPARTMENT VALUATION OFFICER AS PER PROVISIONS OF SEC.55A IS IMPROPER, ERRONEOUS, CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT MAY FURTHER BE HELD THAT THE VALUATION REP ORT ISSUED BY A GOVERNMENT APPROVED VALUER WHICH HAS BEEN ADOPTED BY THE APPELLANT FOR COMPUTATION OF LONG TERM CAPITAL GAIN IS AS PER THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. THE REFERENCE MADE TO DEPARTMENT VALUATION OFFICER U/S.55A AND C OMPUTATION OF LONG TERM GAIN MADE ON THIS BASIS BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT . THIS RESPECT . 5. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THAT AND AS PER P ROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, THE FIRST APPELLATE AUTHORITY HAS NOT ADJUDICATED THE GROUND 4 RAISED BEFORE THE FIRST APPELLATE AUTHORITY. IT FURTHER BE HELD AND THE FIRST APPELLATE AUTHORITY SHOULD BE DIRECTED TO ADJUDICATE THE GROUND NO .4 RAISED BY THE APPELLATE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 6. WITHOUT PREJUDICE TO THE GROUND NO.6, IT BE HELD THAT ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THAT AND AS PER PROVISIONS & SCHEME OF THE ACT, RESORTING TO THE PROVISIONS OF SEC.142A TREATING THE SALE OF ASSETS AS UNEXPLAINED ASSETS U/S.69, 69A AND 69B IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESORTING TO THE PROVISIONS OF SEC.142A. IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUST IFIED IN NOT ADJUDICATING THE GROUND NO.4 RAISED BY THE APPELLATE. THE COMPUTATION OF LONG TERM CAPITAL GAIN MADE BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY BY ADOPTING VALUATION AS PER PROVISIONS OF SEC.142A BE SET ASIDE. THE APPELLANT BE G RANTED JUST AND PROPER RELIEF IN THIS RESPECT. 4. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS NOT PRESSED AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 4 5. THE ISSUE IN GROUNDS OF APPEAL NO.2 AND 3 IS AGAINST INVOKING OF PROVISIONS OF SECTION 147/148 OF THE ACT FOR REOPENING THE ASSESSMENT. 6. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD SOLD THE LAND SITUATED AT SR.NO.201, SADESATRA NALI, HADAPSAR ON 03.07.2004. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD DISCLOSED INCOME FROM L ONG TERM CAPITAL GAINS ON SALE OF THE SAID LAND. FOR COMPUTING THE COST OF ACQUISITION, THE ASSESSEE HAD ADOPTED THE FAIR MARKET VALUE AS ON 01.04.1981 , A S PER THE REPORT OF GOVERNMENT APPROVED VALUER . THE ASSESSING OFFICER RECEIVED INFORMATION FROM DCIT , CENTRAL CIRCLE 2(3), PUNE ON 02.03.2009 IN THE CASE OF SUNIL RAMACHANDA TUPE (HUF). THE ASSESSING OFFICER FOUND THAT SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN THE CASE OF SHRI RAHUL ROHIDAS TUPE AND OTHERS ON 02.12.2006. DURING THE COURSE OF POST SE ARCH ENQUIRIES, THE ADIT (INV), UNIT 1(1), PUNE IN THE APPRAISAL REPORT DATED 29.01.2007 HAD OBSERVED THAT SHRI SUNIL RAMCHANDRA TUPE AND HIS 10 FAMILY MEMBERS TRANSFERRED THE LAND AT HADAPSAR ADMEASURING 5790 SQ.MTRS. TO M/S. R.R. TUPE BUILDERS PVT. LTD. VIDE DEVELOPMENT AGREEMENT DATED 04.08.2004 FOR CONSIDERATION OF RS.46,45,250/ - PLUS TWO PLOTS OF RS.10 LAKHS AS CONSIDERATION IN KIND. THE SALE RATE PER SQUARE METER WORKED TO RS. 975/ - . THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD TAKEN THE FAIR MA RKET VALUE OF THE LAND AS ON 01.04.1981 AT RS. 205/ - PER SQUARE METER, AS SUCH, THE VALUE OF THE LAND SOLD AT 5790 SQ.MTRS. WORKED OUT TO RS. 11,86,950/ - AND AFTER INDEXING, THE INDEXED COST OF ACQUISITION WORKED OUT TO RS. 56,97,360/ - THE ADIT(INV) ON GOING THROUGH THE DOCUMENTS HAD OBSERVED THAT THE VALUE OF ABOVE PROPERTY FOR STAMP DUTY PURPOSE WAS TO BE CONSIDERED AT RS. 41,02,275/ - AND SINCE THE PROPERTY UNDER REFERENCE WAS AN ANCESTRAL PROPERTY, THE RESULTANT CAPITAL GAINS HAD TO BE TAXED IN ASSESSMENT Y EAR 2005 - 06 IN THE HANDS OF HUF AND NOT IN THE HANDS OF INDIVIDUAL. ON THE ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 5 BASIS OF SAID INFORMATION, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF) FOR ASSESSMENT YEAR 2005 - 06. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS , THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FILED A LETTER DATED 18.12.2009 ALONG WITH COPY OF 7/12 EXTRACT OF THE SAID LAND AND ALSO PHER - PHAR EXTRACT OF THE LAND. HE EXPLAINED THAT THE ASSESSEE AND HIS FIVE OTHER FAMILY MEMBERS HAD 1/6 TH SHARE IN THE SAID PROPERTY IN THE INDIVIDUAL CAPACITY AND THE SAID TRANSACTION HAD BEEN SHOWN BY THE ASSESSEE IN THE INDIVIDUAL RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2005 - 06 ON 10.08.2005 WITH ITO, WARD 1(3), PUNE DECLARING TOTAL LOSS OF RS. 8,685/ - . THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT IN THE PRESENT CASE PERUSED THE RETURN OF INCOME FILED BY THE ASSESSEE AND NOTED THAT HE HAD ADOPTED THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 AT RS.205/ - PER SQ.MTR. HOWEVER, IN THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF), THE MATTER WAS REFERRED TO THE GOVERNMENT VALUATION OFFICER, IT DEPARTMENT, SOLAPUR FOR VALUATION PURPOSES OF THE SAID LAND UNDER SECTION 55A/50C(2) OF THE ACT TO ARRIVE AT THE V ALUATION AS ON 01.04.1981 AND FAIR MARKET VALUE ON 04.08.2004. ON THE BASIS OF VALUATION REPORT IN RESPECT OF SAID LAND, THE LONG TERM CAPITAL GAINS WAS RE - COMPUTED IN THE HANDS OF ASSESSEE BY ADOPTING THE SALE CONSIDERATION AT RS. 56,45,280/ - AND BY ADOPT ING THE COST OF ACQUISITION AT RS. 5,85,000/ - AND INDEXED COST OF ACQUISITION AT RS. 28,08,000/ - . THE LONG TERM CAPITAL GAIN WAS COMPUTED AT RS. 28,37,250/ - , IN WHICH THE ASSESSEES SHARE WAS PROPOSED TO BE RS. 4,72,875/ - . THE ASSESSEE WAS SHOW CAUSED IN THI S REGARD, WHO IN TURN, SUBMITTED ITS REPLY WHICH IS INCORPORATED IN THE ASSESSMENT ORDER ITSELF. THE ASSESSEE SUBMITTED THAT THE RETURN OF INCOME FILED ON 10.08.2005 BE TREATED AS IN COMPLIANCE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT. THE NEXT OBJECTION RAISED BY THE ASSESSEE WAS AGAINST THE REFERENCE TO THE VALUATION OFFICER UNDER SECTION 55A OF THE ACT, ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 6 WHERE THE VALUE TAKEN BY THE ASSESSEE AS COST OF ACQUISITION UNDER SECTION 48 OF THE ACT WAS BASED UPON THE VALUATION CERTIFICATE FURNISHED BY THE GOVERNMENT APPROVED VALUER . THE PLEA OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT WHERE THE COST OF ACQUISITION IS BACKED BY GOVERNMENT APPROVED VALUER , THEN NO REFERENCE CAN BE MADE TO THE DISTRICT VALUATION OFFICER IN ORDER TO COMPUTE THE COST OF ACQUISITION , WHICH IS LOWER . THE ASSESSING OFFICER REJECTED THE PLEA OF THE ASSESSEE IN THIS REGARD AND POINTED OUT THAT THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 WAS TAKEN ON HIGHER SIDE BY THE ASSESSEE AT RS.205/ - PER SQ.MTR. IN ORDER TO DETERMINE THE CORRECT VALUE OF THE PROPERTY , R EFERENCE WAS MADE UNDER SECTION 55A/50C(2) OF THE ACT IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF) TO ARRIVE AT THE VALUE AS ON 01.04.1981 AND FAIR MARKET VALUE AS ON 04.08.2004. COST OF ACQUISITION ADOPTED B Y THE GOVERNMENT VALUATION OFFICER, SOLAPUR WAS RS.101.01 PER SQ.MTR. AND ON THIS BASIS, THE LONG TERM CAPITAL GAINS WORKED OUT TO RS. 28,37,250/ - AND ASSESSEES SHARE COMES TO RS. 4,72,875/ - AS AGAINST THE LOSS SHOWN BY THE ASSESSEE AT RS. 8,685/ - . 7. BEFOR E THE CIT(A), THE ASSESSEE AGITATED REOPENING OF ASSESSMENT UNDER SECTION 147/148 OF THE ACT, WHICH WAS UPHELD BY THE CIT(A) AS THE REOPENING WAS DONE AS PER MAIN PROVISIONS OF SECTION 147 OF THE ACT AND NOT UNDER THE PROVISO, SINCE NO ASSESSMENT WAS MADE UNDER SECTION 143(3) OF THE ACT FOR THE YEAR UNDER APPEAL. RELIANCE IN THIS REGARD WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. REPORTED IN 291 ITR 500 (SC) . 8. THE NEXT CONTENTION OF THE ASSESSEE BEFORE CIT(A) WAS THAT THE REASONS RECORDED FOR REOPENING THE ASSESSMENT APPEARED TO BE AN EXERCISE OF RE - ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 7 APPLICATION OF MIND TO THE SAME FACTUAL MATRIX, WHICH WAS AL SO BEFORE THE ASSESSING OFFICER WAS ALREADY REJECTED, SINCE NO ASSESSMENT WA S MADE UNDER SECTION 143(3) OF THE ACT PRIOR TO ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. SINCE ONLY INTIMATION UNDER SECTION 143(1) OF THE ACT WAS ISSUED TO THE ASSESSEE AND THE SAME IS NOT AN ORDER OF ASSESSMENT , THEREFORE , AS PER THE CIT(A), THERE WAS NO QUESTION OF CHANGE OF OPINION BY THE ASSESSING OFFICER. 9. THE NEXT PLEA RAISED BY THE ASSESSEE BEFORE THE CIT(A) WAS WHETHER THE ASSESSING OFFICER HAD PRIMA FACIE REASONS TO BELIEVE THAT THE INCOME HAD ESCAPED THE ASSESSMENT AND WHETHER THE COND ITIONS LAID DOWN UNDER MAIN PROVISIONS OF SECTION 147 OF THE ACT WERE FULFILLED OR NOT. THE CIT(A) OBSERVED THAT UNDER THE MAIN SECTION 147 OF THE ACT, THE ESSENTIAL PRE - REQUISITE WAS THAT THE ASSESSING OFFICER SHOULD HAVE REASON TO BELIEVE THAT INCOME CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT UNDER SECTION 148(2) OF THE ACT. THE ASSESSING OFFICER SHALL BEFORE ISSUING ANY NOTICE UNDER SECTION 148 OF THE ACT, RECORD HIS REASONS FOR ISSUING NOTICE UNDER THAT SECTION. IN THE CASE OF ASSESSEE, WHERE THE ASSES SING OFFICER HAD RECORDED DETAILED REASONS FOR REOPENING THE ASSESSMENT, THE CIT(A) REFERRED TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (SUPRA) , WHEREIN THE HONBLE SUPREME COURT HAD OBSERVED THAT, THE WOR D REASON IN THE EXPRESSION REASON TO BELIEVE WOULD MEAN CAUSE OR JUSTIFICATION AND IF THE ASSESSING OFFICER HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT INCOME H AD ESCAPED ASSESSMENT. AT THE INITIAL STAGE, WHAT WAS REQUIRED WAS REASON TO BELIEVE, BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME, WAS HELD BY THE CIT(A). HE FURTHER REFERRED TO THE INFORMATION RECEIVED FROM INVESTIGATION WING OF THE DEPARTMEN T AND WHERE THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD NOT ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 8 COMPUTED THE LONG TERM CAPITAL GAINS FROM THE SALE OF PROPERTY IN ACCORDANCE WITH LAW AND CONSEQUENTLY, ISSUED THE NOTICE UNDER SECTION 148 OF THE ACT FOR THE YEAR UNDER CONSIDERATION , SINCE HE HAD PRIMA FACIE REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. IN THIS REGARD, THE CIT(A) UPHELD THE REOPENING OF ASSESSMENT AND THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT FOR THE YEAR UNDER CONSIDERATION. 10. THE SECOND ISSUE RAISED BY THE ASSESSEE WAS THE REFERENCE TO THE VALUATION OFFICER UNDER SECTION 55A / 50C OF THE ACT BEING NOT IN ACCORDANCE WITH LAW. THE CIT(A) NOTED THAT THE ASSESSING OFFICER F ELT THAT THE FAIR MAR KET VALUE AS ON 01.04.1981 ADOPTED BY THE ASSESSEE WAS HIGHER THAN THE FAIR MARKET VALUE AS ON 01.04.1981 DETERMINED BY THE ASSISTANT VALUATION OFFICER, IT DEPARTMENT, SOLAPUR IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF) . SIMILARLY, THE FAIR MARKET VALUE AS ON THE DATE OF TRANSFER WAS ALSO ADOPTED AS SALE CONSIDERATION BY THE ASSESSING OFFICER AS PER THE REPORT OF DVO IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF). ACCORDINGLY, THE ASSESSING OFFICER ADOPTED THE NET SALE CONSIDERATION AT RS. 56,45,250/ - AND THE F AIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 AT RS. 5,85,500/ - AND COMPUTED THE LONG TERM CAPITAL GAINS ON SALE OF LAND AT RS. 28,37,250/ - . THE CONTENTION OF THE ASSESSEE THAT CLAUSE (A) OF SECTION 55A OF THE ACT COULD BE INVOKED WHEN FAIR MARKET VALUE OF THE PROPERTY WAS MORE THAN THE VALUATION DONE BY THE REGISTERED VALUER AND CLAUSE (B) COULD BE INVOKED ONLY WHEN THE VALUATION REPORT FROM THE REGISTERED VALUER HAD NOT BEEN FILED , WAS REJECTED . IN RESPECT OF PROVISIONS OF SECTION 50C OF THE ACT, THE CASE OF ASSESSEE BEFORE THE CIT(A) WAS THAT THE SAME COULD BE INVOKED ONLY WHEN THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT THE STAMP DUTY VALUE OF THE PROPERTY EXCEEDS THE FAIR MARKET VALUE ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 9 AND THE VALUE SO ADOPTED BY THE STAMP VALUATION OFFICER HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION, ETC. NO RELIANCE COULD BE PLACED BY THE ASSESSING OFFICER ON THE REPORT OF DVO OBTAINED IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF) UNDER SECTION 55A OR 50C OF THE ACT. THE CIT(A) OBSERVED THAT THE ASSESSI NG OFFICER HAD NOT MADE ANY REFERENCE TO THE DVO TO ASCERTAIN THE FAIR MARKET VALUE OF SUBJECT PROPERTY AS ON 01.04.1981 AND FAIR MARKET VALUE AS ON THE DATE OF TRANSFER EITHER UNDER SECTIONS 55A OR 50C OF THE ACT. HE HAD RELIED ON THE OPINION OF THE EXPE RT I.E. DVO, SOLAPUR RENDERED IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF). THE CIT(A) THUS, HELD THAT WHERE THE ASSESSING OFFICER HAS NOT EVEN MADE ANY REFERENCE TO THE DVO, IT WAS NOT CORRECT TO SAY THAT THE REFERENCE MADE TO THE DVO WAS INVALID. FURTHER , IN THE CASE OF FAIR MARKET VALUE AS ON THE DATE OF TRANSFER, THE VALUE OF RS.56,45,250/ - CONSIDERED BY THE DVO WAS EQUAL TO THE VALUE SHOWN BY THE ASSESSEE AND HENCE, THERE COULD NOT BE ANY GRIEVANCE. 11. WITH REGARD TO THE FAIR MARKET VALUE AS ON 01. 04.1981, THE CIT(A) HAS REPRODUCED THE RELEVANT OBSERVATIONS OF REPORT OF REGISTERED VALUER AT PAGES 14 AND 15 OF THE APPELLATE ORDER AND NOTED THAT THE VALUATION WAS DONE AT RS.205/ - PER SQUARE METER, BASED ON LOCAL ENQUIRIES WITH THE BUILDERS , REAL ESTAT E AGENTS, ETC. THE REGISTERED VALUER DID NOT REFER TO ANY COMPARABLE SALE INSTANCES TO ARRIVE AT SUCH CONCLUSION AND HENCE, VALUE ADOPTED BY HIM WAS UNREALISTIC AND WITHOUT ANY SCIENTIFIC BASIS. IN RESPECT OF THE REPORT OF DVO, THE CIT(A) OBSERVED THAT T HE SAME WAS ON THE BASIS OF COMPARABLE SALE INSTANCES AND AFTER TAKING INTO CONSIDERATION THE RELEVANT FACTORS LIKE THE SIZE OF PLOT, LOCATION OF LAND, ETC. , VALUE WAS WORKED OUT. THE REPORT OF THE DVO IS SCANNED AND REPRODUCED BY THE CIT(A) AT PAGES 16 A ND 17 OF THE APPELLATE ORDER. THE CIT(A) OBSERVED AS COULD BE SEEN FROM THE ABOVE SCANNED IMPRESSIONS, THE ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 10 SALE INSTANCES REFERRED BY THE DVO IN THE ABOVE VALUATION REPORT IN THE CASE OF APPELLANT HUF AND OTHER OWNERS RELATE TO THE PROPERTIES FROM THE AD JOINING AREA AND BECAUSE OF SIMILARITIES IN LOCATION AND PROXIMITY WITH THE LAND IN QUESTION, THE TRANSACTION IN QUESTION IS COMPARABLE WITH THE SALE INSTANCES CITED BY THE DVO. THE CIT(A) THUS, HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED ON FACTS AND IN LAW IN ADOPTING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 AT RS.101/ - PER SQ.MTR. AND MARKET VALUE AS ON DATE OF TRANSFER OF THE PROPERTY AT RS. 56,45,250/ - AND THE ADDITION MADE BY THE ASSESSING OFFICER IN THIS REGARD WAS UPHELD BY THE CIT( A). 12. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 13. IN THE FIRST AND FOREMOST PLEA , THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE OBJECTED TO THE REASONS RECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT. ATTENTI ON WAS DRAWN TO THE COPY OF REASONS WHICH ARE PLACED AT PAGES 1 TO 3 OF THE PAPER BOOK. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT THE PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF) WERE DROPPED. HE FURTHER POINTED OUT THAT THE ASSESSEE HAD DECLARED THE FAIR MARKET VALUE OF THE PROPERTY SOLD BY IT AS ON 01.04.1981 ON THE BASIS OF REGISTERED VALUERS REPORT, WHO HAD VALUED THE PROPERTY @ RS.205/ - PER SQ.MTR., COPY OF THE VA LUATION REPORT IS PLACED AT PAGES 7 TO 15 OF THE PAPER BOOK. HE FURTHER POINTED OUT THAT THE COPY OF DVO REPORT REFLECTS THE DVO TO HAVE TAKEN NOTE OF THE SALES INSTANCES OF NEARBY AREA AS ON 03.09.1987 @ RS.253/ - PER SQ.MTR. AND AS ON 18.08.1984 AT RS.29 8/ - PER SQ.MTR., BUT THE DVO IGNORES BOTH THE SALE INSTANCES AND APPLIES DEVELOPMENT METHOD TO WORK OUT THE VALUE @ RS.101/ - PER SQ.MTR. HE STRESSED THAT IN VIEW OF PRE - AMENDED ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 11 PROVISIONS OF SECTION 55A OF THE ACT, WHERE THE DVO HAS WORKED OUT THE VALUE O F PROPERTY AT A LESSER RATE, NO REFERENCE COULD BE MADE UNDER SECTION 55A OF THE ACT. IN THIS REGARD, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. PUJA PRINTS (2014) 360 ITR 697 (BOM) AND PUNE BENCH OF TRIBUNAL IN SMT. KRISHNABAI TINGRE VS. ITO (2006) 101 ITD 317 (PUNE). HE FURTHER STATED THAT THE AMENDED PROVISIONS OF SECTION 55A OF THE ACT WERE NOT APPLICABLE. THE SUBMISSION MADE BY THE ASSESSEE IN THIS REGARD WAS THAT THE PROCEEDINGS INITIATED UNDER SECTION 14 7 OF THE ACT WERE INVALID SINCE THE REASONS RECORDED FOR REOPENING THE ASSESSMENT WERE ON THE BASIS OF DVOS REPORT. FIRST OF ALL, THE SAID DVOS REPORT WAS IN THE CASE OF SUNIL RAMACHANDRA TUPE (HUF) AND SECONDLY, THE REFERENCE TO THE DVO WAS INVALID. I N THIS REGARD, HE STRESSED THAT THE OPINION OF DVO WAS NOT INFORMATION PERSE FOR THE PURPOSE OF REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN ACIT VS. DHARIYA CONSTRUCTION CO. (2010) 328 ITR 515 (SC) AND THE DECISION OF HONBLE HIGH COURT OF GUJARAT IN AAVKAR INFRASTRUCTURE COMPANY VS. DCIT (2016) 67 TAXMANN.COM 39 (GUJARAT). THE SECOND ISSUE RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT NO REFE RENCE COULD BE MADE UNDER SECTION 50C OF THE ACT. ANOTHER POINT POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THE ORDER OF CIT(A) IN THE CASE OF SHRI SOMNATH TABAJI WAGHALE, WHEREIN VIDE ORDER DATED 28.02.2014 IN THE CASE OF ON E OF CO - OWNERS, THE REASSESSMENT PROCEEDINGS ARE UPHELD, BUT THE ASSESSING OFFICER WAS DIRECTED TO ADOPT THE COST OF ACQUISITION OF THE PROPERTY AS ON 01.04.1981 AND THE SALE CONSIDERATION AS DECLARED BY THE SAID ASSESSEE IN THE RETURN OF INCOME , IN TURN, RELYING ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. PUJA PRINTS (SUPRA). THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE ORDER OF CIT(A) IN ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 12 THE INSTANT CASE AND POINTED OUT THAT THOUGH AT PAGE 13, HE REFERRED TO THE DECISION OF SHRI SOMNATH TABAJI WAGHALE, BUT HE SAYS THAT THE RATIO LAID DOWN THEREIN WAS NOT APPLICABLE AS NO REFERENE UNDER SECTION 55A OF THE ACT WAS MADE IN THE PRESENT CASE. 14. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OT HER HAND, PLACED RELIANCE ON THE ORDER OF CIT(A). 15. ON PERUSAL OF RECORD AND THE PAPER BOOK FILED BY THE ASSESSEE AND ALSO THE LEGAL RELIANCES, THE ISSUE TO BE ADJUDICATED IN THE PRESENT APPEAL IS AGAINST INVOKING OF JURISDICTION UNDER SECTION 147/148 O F THE ACT IN THE HANDS OF ASSESSEE. THERE WAS SEARCH AND SEIZURE OPERATION CARRIED OUT IN THE CASE OF SHRI RAHUL ROHIDAS TUPE AND OTHERS ON 02.12.2006. IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF) INFORMATION WAS RECEIVED FROM THE DCIT, CENTRAL CIRCLE 2(3) , PUNE ON 02.03.2009. IN THE APPRAISAL REPORT, THE ADIT HAD OBSERVED THAT SHRI SUNIL RAMACHANDRA TUPE AND HIS 10 FAMILY MEMBERS HAD TRANSFERRED THE LAND AT HADAPSAR ADMEASURING 5790 SQ.MTRS. TO M/S. R.R. TUPE BUILDERS PVT. LTD. VIDE DEVELOPMENT AGREEMENT DATED 04.08.2004 FOR CONSIDERATION OF RS.46,45,250/ - PLUS TWO PLOTS OF RS.10 LAKHS AS CONSIDERATION IN KIND. THE SALE RATE PER SQUARE METER WORKED OUT TO RS. 975/ - . SHRI SUNIL RAMACHANDRA TUPE IN HIS INDIVIDUAL CAPACITY HAD SHOWN CAPITAL LOSS OF RS.8,685/ - UNDER THE HEAD LONG TERM CAPITAL GAINS FOR THE ASSESSMENT YEAR 2005 - 06 WHILE WORKING OUT COST OF ACQUISITION. THE LAND WAS ADMITTED TO BE AN ANCESTRAL LAND AND FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 WAS TAKEN AT RS.205/ - PER SQ.MTR. THE INDEXED COST OF ACQUISITION WORKED OUT TO RS.56,97,360/ - AND THE NET LOSS WORKED OUT TO RS. 52,110/ - , IN WHICH THE ASSESSEE CLAIMS TO HAVE 1/6 TH SHARE TO THE EXTENT OF RS. 8,685/ - . ON THE BASIS OF ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 13 INFORMATION, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO SUNI L RAMACHANDRA TUPE (HUF), WHEREIN HE CLAIMED THAT THE SAID PROPERTY WAS OWNED BY HIM IN HIS IND IVIDUAL CAPACITY. HOWEVER, THE ASSESSING OFFICER IN THE CASE OF SUNIL RAMACHANDRA TUPE (HUF) REFERRED THE MATTER TO THE GOVERNMENT VALUATION OFFICER FOR VALUATI ON PURPOSES OF THE SAID LAND UNDER SECTION 55A/50C(2) OF THE ACT TO ARRIVE AT THE VALUATION AS ON 01.04.1981 AND FAIR MARKET VALUE AS ON 04.08.2004. ON THE BASIS OF SAID VALUATION, THE LONG TERM CAPITAL GAINS IN THE CASE OF FAMILY WAS RE - COMPUTED AND THE ASSESSEES SHARE WORKED OUT TO RS. 4,72,875/ - . THE ASSESSING OFFICER THUS, HELD THAT THERE WERE REASONS TO BELIEVE THAT THE INCOME OF ASSESSEE FOR ASSESSMENT YEAR 2005 - 06 HAD ESCAPED THE ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT, WHEREIN THE TAXABLE LONG TERM CAPITAL GAINS COMES TO RS. 4,72,875/ - AS AGAINST LOSS OF RS.8,685/ - . THUS, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IS AGGRIEVED BY THE REASONS RECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 147 O F THE ACT AND CONSEQUENT ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE IS ALSO AGGRIEVED BY THE COMPUTATION OF LONG TERM CAPITAL GAINS IN HER HANDS AND HENCE, THE PRESENT APPEAL. 16. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION TO T WO FACETS I.E. (I) SALE CONSIDERATION TO BE ADOPTED AND (II) FAIR MARKET VALUE AS ON 01.04.1981 . THE CONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE THE TRIBUNAL WAS THAT WHERE THE INCOME HAD BEEN CORRECTLY DECLARED BY THE ASSE SSEE IN THE RETURN OF INCOME, THEN IN THE ABSENCE OF ANY REASONS TO BELIEVE OF ESCAPEMENT OF INCOME, THERE WAS NO REASON TO INITIATE THE RE - ASSESSMENT PROCEEDINGS IN THE CASE OF ASSESSEE. THE FIRST OBJECTION WAS AGAINST THE REFERENCE TO DVO UNDER SECTION 55A OF THE ACT TO DETERMINE THE FAIR ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 14 MARKET VALUE AS ON 01.04.1981. UNDER THE PRE - AMENDED PROVISIONS OF SECTION 55A OF THE ACT WITH A VIEW TO ASCERTAIN THE FAIR MARKET VALUE OF A CAPITAL ASSET, THE ASSESSING OFFICER IS EMPOWERED TO REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER UNDER CLAUSE (A) IN CASE WHERE THE VALUE OF AN ASSET AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH ESTIMATE MADE BY THE REGISTERED VALUER AND WHERE THE ASSESSING OFFICER WAS OF THE OPINION THAT THE VALUE SO CLAIMED I S LESS THAN ITS MARKET VALUE. CLAUSE (B) REFERS TO CASES WHICH WERE OTHER THAN CLAUSE (A) I.E. WHERE THE VALUE OF AN ASSET DECLARED BY THE ASSESSEE WAS NOT IN ACCORDANCE WITH THE REPORT OF A REGISTERED VALUER . IN THE FACTS OF PRESENT CASE, THE ASSESSEE H AD DECLARED THE FAIR MARKET VALUE AS ON 01.04.1981 ON THE BASIS OF REGISTERED VALUER REPORT AND THE SAME IS UNDISPUTED, HENCE, IN THE PRESENT CASE, PROVISIONS OF CLAUSE (A) TO SECTION 55A OF THE ACT ARE ATTRACTED. THE PRE - AMENDED PROVISIONS OF SAID CLAUSE VERY CLEARLY PROVIDED THAT A REFERENCE COULD BE MADE TO THE VALUATION OFFICER ONLY IN CASES WHERE THE ASSESSING OFFICER WAS OF THE OPINION THAT THE VALUE SO CLAIMED BY THE ASSESSEE WAS LESS THAN ITS FAIR MARKET VALUE. IN THE INSTANT CASE, THE REGISTERED VALUER HAD WORKED OUT THE VALUE OF PROPERTY AT RS.205/ - PER SQ.MTR., WHEREAS THE DVO HAS WORKED OUT THE VALUE OF PROPERTY AT RS.101/ - PER SQ.MTR. CONSEQUENTLY, WHERE THE VALUE AS DETERMINED BY THE DVO WAS LESSER THAN THE VALUE AS DECLARED BY THE ASSESSEE AS ON 01.04.1981, THEN THE REFERENCE TO THE DVO UNDER SECTION 55A OF THE ACT IS NOT WARRANTED. IN THIS REGARD, I FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. PUJA PRINTS ( SUPRA), WHEREIN IT HAS BEEN HELD THAT WHERE THE ASSESSING OFFICER REFERRED THE ISSUE OF VALUATION TO THE DVO ONLY BECAUSE IN HIS VIEW, THE VALUATION OF THE PROPERTY AS ON 01.04.1981 AS MADE BY THE RESPONDENT - ASSESSEE WAS HIGHER THAN THE FAIR MARKET VALUE, THUS, IN SUCH CASES, INVOCATION OF SECTION 55A OF THE ACT WAS NOT JUSTIFIED. THE HONBLE HIGH COURT FURTHER HELD ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 15 THAT THE AMENDMENT TO SECTION 55A OF THE ACT IN 2012 WAS MADE EFFECTIVE FROM 01.07.2012 AND HENCE, WAS TO BE APPLIED PROSPECTIVELY. IT WAS FURTHER HELD THAT WHERE THE ISSUE WAS COVERED BY SECTION 55A [CLAUSE (A)] OF THE ACT, RESORT COULD NOT BE MADE TO THE RESIDUARY CLAUSE PROVIDED IN SECTION 55A(B)(II) OF THE ACT. THE CBDT CIRCULAR DATED 25.11.1972 WAS HELD TO BE NOT APPLICABLE. FOLLOWING THE ABOVE SAID PROPOSITION AS LAID DOWN BY THE JU RISDICTIONAL HIGH COURT AND APPLYING THE SAME TO THE FACTS OF THE PRESENT CASE, IN THE INSTANT CASE ALSO, REFERENCE WAS MADE TO THE VALUATION OFFICER IN ORDER TO DETERMINE THE FAIR MARKET VALUE AS ON 01.04.1981 ON THE PRETEXT THAT THE FAIR MARKET VALUE AS DECLARED BY THE ASSESSEE WHICH WAS BACKED BY REGISTERED VALUER REPORT , WAS HIGHER, WHICH IS NOT CORRECT. 17. ANOTHER ASPECT TO BE KEPT IN MIND IS THAT THE VALUATION BY THE DVO WAS IN THE CASE OF SUNIL RAMACHANDRA TUPE (HUF) AND THE SAME WAS APPLIED TO THE CASE OF THE ASSESSEE. THE HONBLE SUPREME COURT IN ACIT VS. DHARIYA CONSTRUCTION CO. (SUPRA) HAS LAID DOWN THAT THE OPINION OF DVO PERSE IS NOT INFORMATION FOR THE PURPOSE OF REOPENING ASSESSMENT UNDER SECTION 147 OF THE ACT. THE HONBLE SUPREME COURT F URTHER HELD THAT THE ASSESSING OFFICER HAS TO APPLY HIS MIND TO THE INFORMATION, IF ANY, COLLECTED AND MUST FORM A BELIEF THEREON. 18. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE HONBLE HIGH COURT OF GUJARAT IN AAVKAR INFRASTRUCTURE COMPANY VS. DCIT (SUPRA), WHERE THE ASSESSING OFFICER HAD REFERRED TO THE DVO FOR DETERMINING COST OF CONSTRUCTION OF PROJECT OF ASSESSEE AND BASED UPON REPORT OF DVO, REOPENED THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION ON THE GROUND THAT THE ASSESSEE HAD UNDER - REPORT ED THE COST OF INVESTMENT . W HERE THE ASSESSING OFFICER HAD ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 16 NOT INDEPENDENTLY APPLIED HIS MIND TO RECORD THE CASE AS TO COST OF IMPROVEMENT AS DECLARED BY THE ASSESSEE WAS IN FACT UNDER - REPORTED AND THE REOPENING OF ASSESSMENT MERELY ON THE BASIS OF REPORT OF DVO WAS HELD TO BE WITHOUT ANY AUTHORITY OF LAW AND COULD NOT BE SUSTAINED. 19. APPLYING THE ABOVE SAID PROPOSITION TO THE FACTS OF THE PRESENT APPEAL, IT IS CLEAR THAT THE ASSESSMENT IN THE CASE WAS REOPENED IN ORDER TO RE - COMPUTE THE INCOME FROM LON G TERM CAPITAL GAINS IN THE HANDS OF ASSESSEE ON ACCOUNT OF COST OF ACQUISITION DECLARED BY THE ASSESSEE AT RS.205/ - PER SQ.MTR. THE REOPENING OF ASSESSMENT WAS ALSO ON ACCOUNT OF REFERENCE MADE TO THE DVO UNDER SECTION 50C OF THE ACT , THE SAME WILL BE RE FERRED IN THE PARAS HEREINAFTER. 20. NOW, COMING TO THE REASONS RECORDED FOR REOPENING THE ASSESSMENT I.E. ON THE BASIS OF REPORT OF DVO, WHEREIN THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE INFORMATION SO COLLECTED AND HAD BASED HIS VIEW ON THE DVO REPORT OBTAINED IN THE CASE OF SUNIL RAMACHANDRA TUPE (HUF) AND HAD RECORDED THE REASONS FOR REOPENING THE ASSESSMENT ON THE BASIS THAT THERE WAS ESCAPEMENT OF INCOME , W HERE THE ASSESSEE HAD CLAIMED THE COST OF ACQUISITION AS ON 01.04.1981 ON HIGHER VA LUE OF RS.205/ - PER SQ.MTR. AS AGAINST THE DVO REPORT OF RS.101/ - PER SQ.MTR. FIRST OF ALL, THE ACTION OF ASSESSING OFFICER IN RECORDING THE REASONS FOR REOPENING THE ASSESSMENT DO NOT STAND IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN A CIT VS. DHARIYA CONSTRUCTION CO. (SUPRA) . SECONDLY, IN ANY CASE, NO REFERENCE COULD BE MADE UNDER SECTION 55A OF THE ACT TO THE DVO TO OBTAIN FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 ON THE PRETEXT THAT THE VALUATION OF PROPERTY DECLARED BY THE ASSE SSEE WAS HIGHER THAN THE FAIR MARKET VALUE AS ON THAT DATE. WHERE NO SUCH REFERENCE COULD BE MADE TO THE DVO UNDER SECTION 55A OF THE ACT AND IN ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 17 THE ABSENCE OF VALUER REPORT, NO REASONS COULD BE RECORDED FOR ESCAPEMENT OF INCOME AND ON THIS GROUND ALSO, T HERE IS NO MERIT IN THE REOPENING OF ASSESSMENT BY THE ASSESSING OFFICER UNDER SECTION 147 OF THE ACT. 21. ANOTHER ASPECT OF THE ISSUE IS THAT THE PERUSAL OF DVO REPORT, WHICH IS REPRODUCED BY THE CIT(A) AT PAGES 16 AND 17 OF THE APPELLATE ORDER REFLECTS THAT IN THE VICINITY OF THE AREA, THERE WERE SALES INSTANCE AVAILABLE ON SALE OF PLOT OF LAND AT RS.298/ - PER SQ.MTR. ON 18.08.1984 . THERE IS ANOTHER SALE INSTANCE OF FLAT BEING SOLD ON 03.09.1981 , WHERE THE LAND RATE WAS TAKEN AT RS.253/ - PER SQ.MTR. BO TH THESE INSTANCES WERE IGNORED AND THE DVO ADOPTED DEVELOPMENT METHOD TO WORK OUT THE VALUE OF THE LAND AT RS.101/ - PER SQ.MTR., WHICH IS NOT JUSTIFIED. 22. NOW, COMING TO THE SECOND REFERENCE MADE BY THE ASSESSING OFFICER UNDER SECTION 50C OF THE ACT, W HEREIN THE SALE VALUE OF THE SAID PROPERTY AS ON 04.0 8 .2004 HAS BEEN WORKED OUT AT RS.56,45,250/ - AND T HE ASSESSEE HAD DECLARED THE SALE CONSIDERATION OF RS.56,45,250/ - ONLY. FIRST OF ALL, THERE IS NO DIFFERENCE IN THE SALE VALUE DECLARED BY THE ASSESSEE AND AS COMPUTED BY THE DVO AS ON 04.08.2004. SECONDLY AND MOST IMPORTANTLY, NO REFERENCE COULD BE MADE TO THE DVO UNDER THE PROVISIONS OF SECTION 50C OF THE ACT, WHICH ARE TO BE INVOKED IN SPECIAL CIRCUMSTANCES, WHEREIN THE CONSIDERATION RECEIVED OR ACCRU ING AS A RESULT OF TRANSFER BY THE ASSESSEE OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS OTHER THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF STATE GOVERNMENT, FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER. IN CASE, THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT THE VALUE SO ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON DATE OF TRANSFER AND WHERE THE VALUE SO ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 18 ADOPTED OR ASSESSED HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY AUTHORITIES, COURTS OR HIGH COURT, THEN THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO THE VALUATION OFFICER . THE PRESENT CASE IS NOT A CASE, WHEREIN THE STAMP VALUATION OFFIC ER HAS ASSESSED THE VALUE OF CAPITAL ASSET SOLD BY THE ASSESSEE AND THE CO - OWNER AT A HIGHER RATE. IN THE ABSENCE OF THE SAME, NO REFERENCE COULD BE MADE UNDER THE GARB OF SECTION 50C OF THE ACT. WHERE NO SUCH REFERENCE COULD BE MADE, THERE COULD NOT BE ANY REASON TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME ON ACCOUNT OF SUCH REPORT OF THE DVO AS ON DATE OF SALE I.E. 04.08.2004. IN THE ABSENCE OF ANY REASONS TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME, NO ACTION CAN BE INITIATED UNDER SECTION 148/147 OF THE ACT. THE HONBLE SUPREME COURT IN ACIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. (SUPRA) HAS ELABORATED ON THE SCOPE AND EFFECT OF SECTION 147 OF THE ACT AND WHERE THE SAM E CAN BE INVOKED. HOWEVER, THE BASIC CONDITION FOR THE ASSESSING OFFICER TO COME TO A FINDING THAT THERE IS A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IN ORDER TO CONFER JURISDICTION ON HIM TO REOPEN THE ASSESSMENT STANDS. THE SAID CONDITIONS HAVING NOT BEEN FULFILLED IN THE PRESENT APPEAL, THERE IS NO MERIT IN RECOR DING OF REASONS FOR REOPENING THE ASSESSMENT IN THE CASE OF ASSESSEE AND CONSEQUENTLY, THE EXERCISE OF RECORDING OF REASONS UNDER SECTION 147 OF THE ACT MERITS TO BE SET - ASIDE. THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT IS INVALID AND THE ASSESSMENT P ROCEEDINGS COMPLETED THEREIN ARE ALSO THUS, INVALID. REVERSING THE ORDER OF CIT(A) , THE ASSESSING OFFICER IS DIRECTED TO COMPUTE THE INCOME OF ASSESSEE AS DECLARED BY HER IN THE RETURN OF INCOME. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. ITA NO. 176 4 /PN/20 1 4 ITA NO.1761/PN/2014 SMT. SANGEETA SANJAY GHULE & ANR 19 23. THE FACTS AND ISSUE IN ITA NO.1761/PN/2014 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO.1764/PN/2014 AND THE DECISION IN ITA NO.1764/PN/2014 SHALL APPLY MUTATIS AND MUTANDIS TO ITA NO.1761/PN/2014. 24 . IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) - I , PUNE ; 4. / THE CIT - I , PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE