VIJAY P. KARNIK, MUMBAI V. ITO WD 19(2)(2), MUMBAI

ITA 261/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3561 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 10-04-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 11-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Value adopted by valuation officer; Capital asset; Question of law; Cost of acquisition; Fair market value; Valuation report
• Section: 54; 132

Judgement Text

ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 1 OF 13 IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 261/MUM/2011 (ASSESSMENT YEAR 2007-08 ) DATE OF HEARING: 11/6/2013 DATE OF PRONOUNCEMENT: 21/6/2013 O R D E R PER RAJENDRA SINGH THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 10.10.2010 OF CIT (A) FOR THE ASSESSMENT YEAR 2007-08. THE DISPUTES RAISED BY ASSESSEE IN THIS APPEAL IS R EGARDING ASSESSMENT OF LONG TERM CAPITAL GAIN ON THE BASIS O F VALUATION REPORT AND LACK OF ADEQUATE OPPORTUNITY BY THE VALU ATION MR. VIJAY P. KARNIK FLAT NO. B-5, NANDANVAN, SARASWATI ROAD, SANTACRUZ WEST, MUMBAI 400 054. PAN:- AQDPK9075A THE INCOME TAX OFFICER WARD 19 (2)-(2), PIRAMAL CHAMBERS, LALBAUG, PAREL MUMBAI:- 400012 APPELLANT RESPONDENT DEPARTMENT BY. SHRI O.P. MEENA ASSESSEE BY: SHRI LALCHAND CHOUDHARY ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 2 OF 13 OFFICER. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND IN WHICH IT HAS BEEN SUBMITTED THAT IN THE ABSENCE OF MANDATORY RECORDING OF SATISFACTION BY THE AO, THERE WAS NO J USTIFICATION FOR MAKING REFERENCE UNDER SECTION 55A AND, THEREFO RE, THE REFERENCE MADE WAS BAD IN LAW AND ILLEGAL. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE DURING THE RELEVANT YEAR HAD SOLD A PLOT FOR A SUM OF ` . 1.50 CRORE. SINCE THE PLOT HAD BEEN ACQUIRED PRIOR TO 1.4.1981, THE ASSESSEE H AD ADOPTED THE COST OF ACQUISITION AS THE MARKET VALUE OF THE PROPERTY AS ON 1.4.1981. THE MARKET VALUE AS ON 1.4.1981 HAS BEEN TAKEN BY ASSESSEE AT ` . 7,61,475/- ON THE BASIS OF REPORT OF REGISTERED VALUER. THE ASSESSEE COMPUTED THE LONG TERM CAPITAL GAIN AT ` . 99,13,154/- AND, THEREAFTER, AFTER CLAIMING DEDUCTI ON UNDER SECTION 54 OF THE IT ACT, THE TAXABLE LONG TERM CAP ITAL GAIN WAS DECLARED AT ` . 6,37,172/-. THE AO DURING THE ASSESSMENT PROCEEDINGS HAD REFERRED THE VALUATION OF PROPERTY AS ON 1.4.1981 TO THE DISTRICT VALUATION OFFICER (DVO). A S PER AO, THE DVO HAD VALUED THE PROPERTY AT ` . 2,72,447/- AS ON 1.4.1981. THE AO, THEREFORE, COMPUTED THE LONG TERM CAPITAL G AIN ADOPTING THE COST OF ACQUISITION AS ON 1.4.1981 OF ` . 2,72,447/- AT ` . 1,24,51,210/-. THEREAFTER, AFTER ALLOWING DEDUCTI ON UNDER SECTION 54 OF THE IT ACT, THE TAXABLE LONG TERM CAP ITAL GAIN WAS COMPUTED BY AO AT ` . 47,94,019/- ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 3 OF 13 2.1 THE ASSESSEE DISPUTED THE DECISION OF AO AND SU BMITTED BEFORE CIT (A), THAT BOTH AO AND DVO HAD NOT GIVEN ADEQUATE OPPORTUNITY OF HEARING TO ASSESSEE. IT WAS POINTED OUT THAT ASSESSEE HAD BEEN PREVENTED BY THE SUFFICIENT CAUSE TO FILE OBJECTIONS AGAINST THE VALUATION REPORT. THE ASSESS EE ALSO SUBMITTED THAT THE REPORT OF THE DVO VALUING THE PR OPERTY AS ON 1.4.1981 HAD NO JUSTIFICATION. IT WAS POINTED OU T THAT AS PER REPORT IN THE ACCOMMODATION TIMES, THE RATES FOR RESIDENTIAL PREMISES PREVAILING IN SANTACRUZ (W) AS ON 1.4.198 1 WERE IN THE RANGE OF ` . 400/- SQ. FT. TO 1100 SQ. FT. THE RATE ADOPTED BY THE GOVERNMENT APPROVED VALUER WAS ` . 706/- PER SQ. FT. WHEREAS THE RATE ADOPTED BY THE DVO WAS ` . 310/- PER SQ. FT. IT WAS FURTHER POINTED OUT THAT THE DVO HAD NOT CONSID ERED THE VALUE OF THE TERRACE WHILE ARRIVING AT VALUE OF THE HOUSE AS ON 1.4.1981. CIT (A) HOWEVER WAS NOT SATISFIED WITH TH E CONTENTIONS RAISED. IT WAS OBSERVED BY HIM THAT THE DVO HAD QUOTED THREE INSTANCES OF THE PROPERTY HAVING COMPA RABLE RATES AND, THEREAFTER, ADOPTED THE RATE OF ` . 310 PER SQ. FT. FOR VALUING THE PROPERTY. THEREFORE, THE VALUATION MADE BY DVO COULD NOT BE FAULTED WITH. THE AO HAD COMPUTED THE CAPITAL GA IN ON THE BASIS OF REPORT OF THE DVO AND, THEREFORE, CIT (A) HELD THAT THERE WAS NO CAUSE FOR INTERFERENCE IN THE ACTION T AKEN BY AO AND ACCORDINGLY CONFIRMED THE ORDER OF AO, AGGRIEVE D BY WHICH THE ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 4 OF 13 3. BEFORE US, LEARNED AR FOR ASSESSEE SUBMITTED TH AT THE AO UNDER SECTION 55A, WITH A VIEW TO ASCERTAINING THE FAIR MARKET VALUE OF THE CAPITAL ASSET, CAN REFER THE VALUATION OF THE CAPITAL ASSET TO THE VALUATION OFFICER UNDER CLAUSE (A) IN CASE THE VALUE OF THE ASSET CLAIMED BY THE ASSESSEE IN ACCORDANCE WITH THE ESTIMATE MADE BY THE REGISTERED VALUER WAS LESS THA N THE MARKET VALUE. IN ANY OTHER CASE, THE REFERENCE MAY BE MADE UNDER CLAUSE (B) OF SECTION 55A HAVING REGARD TO TH E NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES OR IN CA SES WHERE THE FAIR MARKET VALUE EXCEEDED THE VALUE OF THE ASS ET CLAIMED BY ASSESSEE BY MORE THAN THE PRESCRIBED PERCENTAGE. IT WAS POINTED OUT THAT IN THIS CASE, THE VALUE AS PER THE REGISTERED VALUER REPORT WAS MORE THAN THE MARKET VALUE CONSID ERED BY THE AO AND, THEREFORE REFERENCE WAS NOT JUSTIFIED U NDER SECTION 55A (A). FURTHER SINCE, ASSESSEE HAD FILED THE REPO RT OF THE REGISTERED VALUER, THE CLAUSE (B) OF SECTION 55A WA S NOT APPLICABLE. THEREFORE, IT WAS SUBMITTED THAT THE RE FERENCE MADE BY AO TO THE DVO WAS ILLEGAL, INVALID AND THE REPO RT SUBMITTED BY DVO, THEREFORE, COULD BE ACTED UPON. RELIANCE FO R THE SAID PROPOSISITON WAS PLACED ON THE JUDGMENT OF HON'BLE HIGH COURT OF GUJARAT IN CASE OF HIA BEN JAYANTILAL SHAH VS. I NCOME TAX OFFICER ( 181 TAXMAN.COM 191). RELIANCE WAS ALSO PL ACED ON THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN CASE OF SMT . SARLA N. SAKRANE VS. INCOME TAX OFFICER (130 ITD 167). THE L EARNED AR ALSO REFERRED TO THE JUDGMENT OF HON'BLE HIGH COURT OF MUMBAI IN CASE OF CIT VS. DAULAL MOHTA HUF IN ITA NO. 1031 OF 2008 ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 5 OF 13 DATED 22 ND SEPTEMBER 2008, IN WHICH THE SAME VIEW HAD BEEN TAKEN BY THE HON'BLE HIGH COURT. 3.1 IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD ALS O NOT BEEN GIVEN PROPER OPPORTUNITY OF HEARING BY THE DVO. IT WAS POINTED OUT THAT THE DVO HAD PREPARED THE DRAFT REPORT ON 1 8.12.2009 AND VIDE NOTICE DATED 18.12.2009, THE HEARING HAD B EEN FIXED ON 28.12.2009. IT WAS ALSO POINTED OUT THAT THE NOT ICE HAD BEEN RECEIVED BY THE ASSESSEE ON 26.12.2009 WHICH WAS SA TURDAY FOLLOWED BY TWO PUBLIC HOLIDAYS I.E. SUNDAY ON 27.1 2.2009 AND MUHARRAM ON 28.12.2009. THE HEARING THUS HAD BEEN F IXED ON A PUBLIC HOLIDAY. THE DVO WITHOUT GIVING ANY FURTHE R OPPORTUNITY OF HEARING HAD PASSED THE ORDER ON 30.1 2.2009. THE LEARNED AR FOR THE ASSESSEE FURTHER POINTED OUT THAT THE DVO IN THE REPORT A COPY OF WHICH HAS BEEN PLACED I N THE PAPER BOOK, HAS HIMSELF WRITTEN THAT ON THE DATE OF INSPE CTION BUILDING HAD BEEN DEMOLISHED AND THE NEW BUILDING W AS UNDER CONSTRUCTION. THEREFORE, IT WAS CLEAR THAT THE DVO COULD NOT HAVE INSPECTED THE BUILDING. IT WAS ALSO POINTED OU T THAT THE PROPERTY HAD A TERRACE OF ABOUT 600 SQ. FT. WHICH H AD NOT BEEN CONSIDERED BY THE DVO. THE LEARNED AR ALSO ARGUED T HAT THE AO WHILE MAKING THE REFERENCE UNDER SECTION 55A IS REQUIRED TO RECORD SATISFACTION REGARDING THE MARKET VALUE OF T HE PROPERTY WHICH HAD NOT BEEN DONE IN THIS CASE AND, THEREFORE , THE REFERENCE MADE WAS NOT VALID ON THIS GROUND ALSO FO R WHICH ASSESSEE HAS RAISED THE ADDITIONAL GROUND. ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 6 OF 13 4. LEARNED DR ON THE OTHER HAND STRONGLY DEFENDED T HE ORDERS OF AUTHORITIES BELOW. IT WAS ARGUED THAT EVE N IF THE REPORT OF THE REGISTERED VALUER HAD BEEN FILED BY THE ASSE SSEE, THE REFERENCE TO THE DVO COULD BE MADE BY AO UNDER CLAU SE (B) OF SECTION 55A. HE REFERRED TO THE JUDGMENT OF HON'BLE HIGH COURT OF DELHI IN CASE OF ACC LTD. VS. DVO (21 TAXMAN. CO M 488) IN WHICH IT WAS HELD THAT EVEN IF THE REGISTERED VALUE R REPORT HAD BEEN SUBMITTED BY THE ASSESSEE, THE AO COULD MAKE R EFERENCE TO THE DVO UNDER SECTION 55A (B) (II), IF HE CONSID ERS IT WAS NECESSARY TO DO SO, HAVING REGARD TO THE NATURE OF ASSET AND OTHER RELEVANT CIRCUMSTANCES. THEREFORE, IT WAS SUB MITTED THAT REFERENCE MADE BY AO TO DVO WAS JUSTIFIED. THE SAME VIEW IT WAS POINTED OUT HAS BEEN TAKEN BY THE MUMBAI BENCH OF TRIBUNAL IN CASE OF DCIT VS. CHATURBHUJ VALLABHDAS HUF ( 130 ITD 230). AS REGARDS THE JUDGMENT OF HON'BLE HIGH COURT OF BOMBAY IN CASE OF CIT VS. DAULAL MOHTA HUF (SUPR A), THE LEARNED DR SUBMITTED THAT THERE WAS NO REASON FOR S PEAKING THE ORDER BY THE HON'BLE HIGH COURT ON THE ISSUE AN D, THEREFORE, THE SAID CASE COULD NOT BE CONSIDERED AS A PRECEDENT. HE PLACED RELIANCE ON THE JUDGMENT OF HON'BLE SUPRE ME COURT IN CASE OF MUNICIPAL CORPORATION OF DELHI VS. GURNA M KAUR (1989 AIR 38) IN WHICH IT HAS BEEN HELD THAT FOR AP PLICATION OF DOCTRINE OF PRECEDENTS THE MATTER SHOULD HAVE BEEN FULLY ARGUED AND DECIDED AND THAT THE CASES WHICH ARE SUB -SILENTIO AND WITHOUT ARGUMENTS COULD NOT BE CONSIDERED AS PR ECEDENT. ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 7 OF 13 THE REFERENCE WAS ALSO MADE TO THE JUDGMENT OF HON' BLE SUPREME COURT IN CASE OF INDIAN OIL CORPORATION LTD . VS. STATE OF BIHAR AND OTHERS ( 167 ITR 897) IN WHICH IT HAS BEEN HELD THAT WHEN THE ORDER PASSED BY THE COURT IS NOT A SP EAKING ONE IT IS NOT CORRECT TO ASSUME THAT THE COURT HAS NEC ESSARILY DECIDED IMPLICITLY ALL THE QUESTIONS IN RELATION TO THE MERITS OF THE AWARDS. 4.1 AS REGARDS THE ADDITIONAL GROUND RAISED BY ASS ESSEE, THE LEARNED DR SUBMITTED THAT FULL FACTS RELATING TO TH E ADDITIONAL GROUND HAVE NOT BEEN PLACED ON RECORD AND, THEREFOR E, THE ADDITIONAL GROUND COULD NOT BE RAISED AT THE LEVEL OF TRIBUNAL. 5. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE RAISED IN THIS A PPEAL IS REGARDING ASSESSMENT OF LONG TERM CAPITAL GAIN IN R ESPECT OF SALE OF PLOT OF LAND. THE DISPUTE IS LIMITED TO DET ERMINATION OF COST OF ACQUISITION OF THE PLOT. THE PLOT HAD BEEN ACQUIRED PRIOR TO 1.4.1981 ABOUT WHICH THERE IS NO DISPUTE AND, TH EREFORE, IN SUCH A CASE MARKET VALUE OF THE PLOT OF THE LAND AS ON 1.4.1981 WILL BE THE COST OF ACQUISITION. THE ASSESSEE HAD T AKEN THE MARKET VALUE AS ON 1.4.1981 AT ` . 7,61,475/- ON THE BASIS OF REPORT OF REGISTERED VALUER. THE AO HAD, HOWEVER, HAS MADE REFERENCE TO THE DVO REGARDING THE MARKET VALUE AS ON 1.4.1981 AND DVO HAS DETERMINED THE MARKET VALUE AT ` . 2,72,447. THE REGISTERED VALUER HAD VALUED THE LAND AT THE RATE ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 8 OF 13 OF ` 706 PER SQ. FT. WHEREAS THE DVO HAS ADOPTED THE RA TE AT ` . 310 SQ. FT. AFTER CONSIDERING COMPARABLE CASES. THE LEARNED AR FOR ASSESSEE HAS RAISED THE LEGAL DISPUTE THAT ASSE SSEE HAVING DECLARED THE HIGHER VALUE OF COST OF ACQUISITION TH AN THE VALUE ADOPTED BY THE AO, NO REFERENCE COULD BE MADE TO TH E DVO U/S 55A. THE SAID PROVISION IS REPRODUCED BELOW AS REA DY REFERENCE SECTION 55A:- WITH A VIEW TO ASCERTAINI NG THE FAIR MARKET VALUE OF A CAPITAL ASSET, FOR THE PURPOSE OF THIS CHAPTER THE AO MAY REFER THE VALUATION OF THE CAPITAL ASSET TO THE VAL UATION OFFICER. (A) IN A CASE WHERE THE VALUE OF THE ASSET AS CLAIMED B Y ASSESSEE IS IN ACCORDANCE WITH THE ESTIMATE MADE BY A REGISTERED VALUER, IF THE AO IS OF THE OPINION (I) THAT THE VALUE SO CLAIMED IS LESS THAN ITS FAIR FAIR MARKET VALUE. (B) IN ANY OTHER CASE, IF THE AO IS OF THE OPINI ON (I)THAT THE FAIR MARKET VALUE OF THE ASSET EXCEEDS THE VALUE OF THE ASSET AS CLAIMED BY ASSESSEE BY MORE THAN SUCH AMOUNT AS MAY BE PRESCRIBED IN THIS BEHALF; OR (II) THAT HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY TO DO SO. 6. IT HAS BEEN ARGUED BY ASSESSEE THAT IN THIS CASE ASSESSEE HAD SUBMITTED THE REPORT OF THE REGISTERED VALUER A ND, THEREFORE THE CLAUSE (A) OF SECTION 55A WAS APPLICABLE. BUT S INCE, THE VALUE DECLARED BY ASSESSEE WAS MORE THAN THE MARKET VALUE ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 9 OF 13 TAKEN BY AO, NO REFERENCE COULD BE MADE UNDER THIS CLAUSE. FURTHER SINCE THE REGISTERED VALUER REPORT HAD BEE N FILED, CLAUSE (B) OF SECTION 55A WAS NOT APPLICABLE. RELIA NCE HAS BEEN PLACED ON THE JUDGMENT OF HON'BLE HIGH COURT OF GUJ ARAT IN CASE OF HIA BEN JAYANTILAL SHAH VS. INCOME TAX (SUP RA) AND ALSO ON THE DECISION OF TRIBUNAL IN CASE OF SMT. SA RLA N. SAKRANE VS. INCOME TAX OFFICER (SUPRA). THE REFEREN CE HAS ALSO BEEN MADE TO THE JUDGMENT OF HON'BLE HIGH COURT OF BOMBAY DATED 28.9.2008 IN CASE OF CIT VS. DAULAL MOHTA HUF IN ITA NO. 1031 OF 2008. IN CASE OF CIT VS. DAULAL MOHTA H UF (SUPRA) THERE WERE TWO QUESTIONS RAISED BEFORE THE HON'BLE HIGH COURT. THE QUESTION (A) RELATED TO THE VALUATION OF THE PROPERTY WHILE QUESTION RAISED IN (B) WAS WHETHER THE AO WAS JUSTIFIED IN MAKING THE REFERENCE TO DVO U/S 55A. THE HON'BLE HI GH COURT IN PARA 3 OBSERVED THAT THE QUESTIONS WERE TO BE RA ISED WERE WITH REGARD TO QUANTUM OF VALUATION WHICH WAS ONLY A FINDING OF FACT AND THERE WAS ABSOLUTELY NO QUESTION OF LAW INVOLVED IN THE ABOVE APPEAL. THE APPEAL WAS THUS DISMISSED. TH E LEGAL ISSUE WHETHER REFERENCE COULD BE MADE U/S 55A WAS T HUS NOT DECIDED BY THE HIGH COURT. THEREFORE, THE SAID JUDG MENT OF THE HIGH COURT CANNOT BE CONSIDERED AS PRECEDENT. WE AL SO FIND THAT THE ISSUE WHETHER REFERENCE TO DVO CAN BE MADE BY AO UNDER CLAUSE (B) OF SECTION 55A EVEN IF THE REPORT OF THE REGISTERED VALUER HAS BEEN FILED BY ASSESSEE HAS BE EN DECIDED BY THE HON'BLE HIGH COURT OF GUJARAT IN CASE OF ACC LTD. VS. DVO (SUPRA), IN WHICH IT WAS HELD THAT EVEN IF THE REGISTERED ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 10 OF 13 VALUER REPORT HAS BEEN FILED, THE AO CAN MAKE A REF ERENCE U/S 55A (B) (II). WE ALSO NOTE THAT THERE IS NOTHING IN THE SECTION 55A WHICH DEBARS AO FROM MAKING REFERENCE UNDER CLA USE (B) EVEN WHEN REGISTERED VALUER REPORT HAS BEEN FILED. IN CASES WHERE REGISTERED VALUER REPORT HAS BEEN FILED REFER ENCE UNDER CLAUSE (A) OF SECTION 55A CAN BE MADE IF THE AO FI NDS THE VALUATION LOWER THAN THE MARKET VALUE. IN ANY OTHER CASE, CLAUSE (B) IS APPLICABLE. THEREFORE, IT IS CLEAR TH AT CLAUSE (B) APPLIES IN SITUATIONS WHERE EITHER NO REGISTERED VA LUER REPORT HAS BEEN FILED OR IF THE REGISTERED VALUER REPORT H AS BEEN FILED BUT THE VALUED DETERMINED IS HIGHER THAN THE MARKET VALUE. THUS IN CASE THE AO IS OF THE OPINION THAT THE VALU E AS PER THE REGISTERED VALUER WAS HIGHER THAN THE MARKET VALUE, HE COULD MAKE REFERENCE U/S 55A (B) (II). THEREFORE, FOLLOWI NG THE JUDGMENT OF HON'BLE HIGH COURT OF GUJARAT IN CASE O F ACC LTD. VS. DVO (SUPRA) WE HOLD THAT THE REFERENCE MADE BY AO TO DVO ON THE FACTS OF THE CASE IS JUSTIFIED AND ORDER OF CIT (A) ON THIS POINT IS THEREFORE UPHELD. 7. WE MAY ALSO POINT OUT HERE THAT EVEN IF THE REF ERENCE MADE BY THE AO TO THE DVO WAS NOT IN ACCORDANCE WIT H LAW OR ILLEGAL THE VALUATION REPORT OBTAINED IN PURSUANCE OF SUCH A REFERENCE WILL BE RELEVANT AND ADMISSIBLE EVIDENCE WHICH CAN BE USED BY THE REVENUE AUTHORITIES IN THE INCOME TAX P ROCEEDINGS. THIS VIEW IS SUPPORTED BY THE DECISION OF HON'BLE S UPREME COURT IN CASE OF POORAN MAL VS. DIRECTOR OF INCOME TAX (INV.) IN ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 11 OF 13 WHICH IT WAS HELD THAT EVEN THOUGH THE SEARCH AND S EIZURE HAD BEEN CONDUCTED IN CONTRAVENTION OF THE PROVISIONS O F SECTION 132 OF THE IT ACT MATERIAL OBTAINED CAN BE USED BY THE INCOME TAX AUTHORITIES. THUS EVEN IF THE REFERENCE MADE BY AO IS CONSIDERED NOT VALID THE VALUATION REPORT CAN ALWAY S BE USED IN THE INCOME TAX PROCEEDINGS FOR THE PURPOSES OF THE ACT. THE SAME VIEW HAS BEEN TAKEN BY THE DECISION OF TRIBUNA L IN CASE OF DCIT VS. CHATURBHUJ VALLABHDAS HUF (SUPRA) IN WHICH THE TRIBUNAL HELD THAT THE VALUATION REPORT HAVING ALRE ADY BEEN OBTAINED BY AO AND USED IN THE ASSESSMENT PROCEEDIN GS, THE ISSUE OF VALIDITY OR ILLEGALITY OF THE REFERENCE HA D BECOME PURELY ACADEMIC IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME IN CASE OF POORAN MAL VS. DIRECTOR OF INCOME TAX (INV.) (SUPRA ). 8. THE LEARNED AR FOR ASSESSEE HAS ALSO RAISED AN A DDITIONAL GROUND THE FIRST TIME BEFORE THE TRIBUNAL IN WHICH IT HAS BEEN SUBMITTED THAT REFERENCE MADE BY AO WAS ALSO NOT VA LID ON THE GROUND THAT AO HAD NOT RECORDED SATISFACTION REGARD ING THE MARKET VALUE OF THE PROPERTY BEFORE MAKING THE REFE RENCE. NO DOUBT IT IS TRUE THAT THE QUESTION RAISED CAN ALWAY S BE RAISED BY ASSESSEE FIRST TIME BEFORE THE TRIBUNAL. PROVIDE D THE FACTS ARE ALREADY ON RECORD. IN THIS CASE NOTHING HAS BEE N PLACED ON RECORD TO SHOW THAT THE AO HAD NOT RECORDED THE SAT ISFACTION NOR ANY FINDING HAS BEEN GIVEN BY THE AUTHORITIES B ELOW ON THIS POINT. THEREFORE, THE FACTS BEING NOT ON RECORD AND THERE BEING NO FINDING OF FACTS BY THE LOWER AUTHORITIES, THE Q UESTION NOW ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 12 OF 13 RAISED BY ASSESSEE AT THIS STAGE CANNOT BE ADMITTED . WE, THEREFORE DO NOT ADMIT THE ADDITIONAL GROUND RAISED BY ASSESSEE AND THE SAME IS, THEREFORE, DISMISSED AS NOT ADMITT ED. 9. HOWEVER WE FIND SUBSTANCE IN THE GROUND RAISED B Y ASSESSEE REGARDING LACK OF OPPORTUNITY BEING PROVID ED BY THE VALUATION OFFICER TO ASSESSEE AT THE TIME OF PREPAR ING THE VALUATION REPORT. THE DVO HAD PREPARED THE DRAFT RE PORT ON 18.12.2009 AND VIDE NOTICE DATED 18.12.2009 HAD FIX ED THE HEARING OF THE CASE ON 28.12.2009. ASSESSEE HAS SUB MITTED THAT NOTICE HAD BEEN RECEIVED BY HIM ON 26.12.2009 WHICH WAS SATURDAY FOLLOWED BY TWO PUBLIC HOLIDAYS I.E. SUNDA Y ON 27.12.2009 AND MUHARRAM ON 28.12.2009. IT IS THUS C LEAR THAT THE DVO HAD FIXED THE HEARING OF THE APPEAL ON A PU BLIC HOLIDAY. THERE IS NOTHING ON RECORD TO SHOW THAT AS SESSEE HAD BEEN PROVIDED ANY FURTHER OPPORTUNITY BY THE DVO AS THE ORDER HAD BEEN PASSED ON 30 TH DECEMBER 2009. THE LEARNED AR HAS SUBMITTED THAT ASSESSEE WANTED TO RAISE OBJECTIONS ABOUT THE VALUATION ON THE GROUND THAT THE BUILDING WHICH HAD ALREADY BEEN DEMOLISHED HAD NOT BEEN INSPECTED BY THE DVO. THE DVO HAD ALSO NOT CONSIDERED THE VALUE OF TERRACE ADMEAS URING ABOUT 600 SQ. FT. THE ASSESSEE COULD ALSO PROVIDE FURTHER MATERIAL IN SUPPORT OF THE HIGHER MARKET VALUE IF THE OPPORTUNI TY HAD BEEN PROVIDED TO IT WHICH HAD BEEN DONE BY THE DVO. WE A LSO NOTE THAT AO HAD COMPLETED THE ASSESSMENT ONLY ON THE BA SIS OF DRAFT VALUATION REPORT AS ON THE DATE OF ORDER THE FORMAL ITA NO. 261/MUM/2011 MR. VIJAY P. KARNIK PAGE 13 OF 13 VALUATION REPORT HAD NOT BEEN RECEIVED BY AO. THERE FORE, IN OUR VIEW THE VALUATION OF THE PROPERTY IS REQUIRED TO B E MADE A FRESH AFTER ALLOWING PROPER OPPORTUNITY OF HEARING TO ASSESSEE BY THE DVO. WE, THEREFORE, SET ASIDE THE ORDER OF C IT (A) AND RESTORE THE MATTER TO THE FILE OF AO FOR PASSING A FRESH ORDER AFTER OBTAINING FRESH REPORT FROM THE DVO AFTER HEA RING ASSESSEE. 10. IN THE RESULT APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT TODAY I.E 21- 6-2013 SD/- SD/- (SANJAY GARG) (RAJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 21 ST JUNE, 2013. SK SR. P.S. COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI