Vijay Kumar Seth, New Delhi V. ACIT, Circle- 33(1), New Delhi

ITA 5244/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0267 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 03-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Capital asset; Cost of acquisition; Fair market value; Valuation report; Onus to prove; Set aside; Capital Gains
• Section: 143(3); 250; 55A; 13; 101

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E F , NEW DELHI BEFORE SH. H. S. SIDHU , JUDICIAL MEMBER A ND SH. N. S. SAINI, ACCOUNTANT MEMBER ITA NO. 5244/DEL/2018 : ASSTT. YEAR : 2015 - 1 6 VIJAY K UMAR SETH, FLAT NO. 8, VASANT ENCLAVE, NEW DELHI - 110057 VS ASSTT. COMM ISSIONER OF INCOME TAX, CIRCLE - 3 3 (1), NEW DELHI - 110002 (APPELLANT) (RESPONDENT) PAN NO. ACXPS6514Q ASSESSEE BY : SH. KARAN KUMRA, CA REVENU E BY : SH. SURENDER PAL , SR. DR DATE OF HEARING : 28 .03 .201 9 DATE OF PRONOUNCE M ENT : 29 .03 .201 9 ORDER PER N. S . SAINI, A CCOUNTANT M EMBER : THIS IS AN APPEAL FILED B Y THE ASSESSEE AGAINST THE ORDER OF COMMIS SIONER OF INCOME TAX (APPEALS) - 11 , NEW DELHI DATED 23.07.2018 . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDERS PASSED BY THE AO UNDER SECTION 143(3) AND ORDER OF THE CIT(A) UNDER SECTION 250 OF THE ACT ARE ILLEGAL, INVALID AND VOID AB INITIO AND MERIT QUASHING. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE TO THE OTHER GROUNDS, THE CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS. 38,17,523 MADE BY THE AO IN THE HANDS OF THE APPELLANT AS CAPITAL GAINS. ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 2 (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE TO THE OTHER GROUNDS, THE ASSESSING OFFICER AND CIT(A) HAVE GROSSLY ERRED IN NOT RELYING ON THE VALUATION REPORT OF A GOVERNMENT APPROVED AND REGISTERED VALUER FURNISHED BY THE APPELLANT TO DETERMINE THE VALUE OF PROPERTY AS ON 01.04.1981. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW AND WITHOUT PREJUDICE TO THE OTHER GROUNDS, THE ASSESSING OFFICER, THE DISTRICT VALUATION OFFICER AND THE CIT(A) HAVE GROSSLY ERRED IN COMPUTING THE VALUE OF APPELLANT S SHARE IN LAND UNDERNEATH THE RESIDENTIAL PROPERTY IN VASANT VIHAR AS ON 01.04.19 81. (5) ON FACTS OF THE CASE AND IN LAW AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE VALUATION OF DVO WHICH IS BASED ON AN AUCTION RATE OF SAFDARJUNG INSTEAD OF AN ACTUAL SALE INSTANCE TO DETERMINE THE VALUE OF LAND IN VASANT VIHAR WHEREAS THE APPELLANT HAD FURNISHED AN AUCTION RATE FOR VASANT VIHAR. (6) ON FACTS OF THE CASE AND IN LAW AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE APPROACH OF DVO OF VALUING VASANT VIH AR (BEING A CATEGORY A COLONY) LOWER THAN SAFDARJUNG (BEING A CATEGORY B COLONY). (7) ON FACTS OF THE CASE AND IN LAW AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE AO, DVO AND CIT(A) HAVE FAILED TO DELIBERATE AND RESPOND TO THE ARGUMENTS RAISED BY THE A PPELLANT AGAINST THE ERRONEOUS CALCULATION OF VALUE OF PROPERTY AS ON 01.04.1981. (8) THE CIT(A) HAS GROSSLY ERRED IN NOT GRANTING RELIEF TO THE APPELLANT REGARDING THE INADVERTENT CLAIM OF COST OF ACQUISITION OF NEW PROPER T Y AS RS. 4,23,94,771 INSTEAD OF RS. 4,33,11,801 FOR COMPUTING THE DEDUCTION U/S 54F, AS SUPPORTED BY DOCUMENTS SUBMITTED BEFORE THE AO. ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 3 (9) THE APPELLANT CRAVES TO ADD, ALTER, DELETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL. 3. THE SOLE ISSUE INVOLVED IN ALL THE GROUNDS OF AP PEAL IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION OF RS.38,17,523 / - MADE BY THE ASSESSING OFFICER BY RELYING ON THE REPORT OF THE DVO IN PLACE OF THE REPORT OF THE REGISTERED VALUER SUBMITTED BY THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SOLD A PROPERTY SITUATED AT A - 7/2, VASANT VIHAR, NEW DELHI FOR A CONSIDERATION OF RS.8,27,50,000/ - SHOWING LONG TERM CAPITAL GAINS OF RS.1,87,14,015/ - IN HIS RETURN OF INCOME. THE ASSESSING OFFICER FO UND THAT THE FAIR MARKET VALUE OF THE PROPERTY ON 01.04.1981 WAS SHOWN BY THE ASSESSEE AT RS.7,02,345/ - RELYING ON THE REPORT OF THE REGISTERED VALUER. THE ASSESSING OFFICER REFERRED THE MATTER TO THE DVO TO DETERMINE THE VALUE OF THE PROPERTY AS ON 01.04. 1981 U/S 55A OF THE ACT. THE DVO DETERMINE D THE FAIR MARKET VALUE ON 01.04.1981 AT RS.3,29,540/ - . THE ASSESSING OFFICER RELYING ON THE SAME MADE ADDITION OF RS.38,17, 523/ - TO THE INCOME OF THE ASSESSEE. 5. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEAL S) CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UNDER: 4.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION MADE BY THE AR. IT HAS BEEN CONTENDED THAT THE AO HAS REFERRED THE PROPERTY FOR THE VALUATION TO THE DVO WITHOUT ANY REA SON. IT IS FURTHER SUBMITTED THAT THE DVO HAS ESTIMATED THE VALUE OF THE PROPERTY BY IGNORING THAT VASANT VIHAR IS A POSH COLONY AS COMPARED TO SAFDARJUNG ENCLAVE. IN THIS REGARD, I HAVE PERUSED THE VALUATION REPORT ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 4 SUBMITTED BY THE DVO U/S 55A OF T HE ACT AND IT IS OBSERVED THAT THE DVO HAD CALLED FOR THE OBJECTIONS TO THE PROPOSED FMV DURING THE COURSE OF VALUATION PROCEEDINGS AND THE SAME WERE SUBMITTED BY THE APPELLANT VIDE HIS LETTER DATED 15.12.2017 AND THE DVO HAS SUBMITTED THE VALUATION REPORT ON 18. 12.2017 AFTER TAKING INTO CONSIDERATION THE OBJECTIONS SUBMITTED BY THE APPELLANT. 4.3.1 FROM THE REPORT OF THE DVO, IT IS OBSERVED THAT THE DVO HAS DEALT WITH THE VARIOUS OBJECTIONS RAISED BY THE APPELLANT IN A RATIONAL MANNER. THE DVO HAS APPLIED THE DD A AVERAGE AUCTIONED RATES OF SAFDAIJUNG ENCLAVE AREA (AS PER NABHI S GUIDE) IN ORDER TO VALUE THE PROPERTY AS ON 01.04.1981 AND HAS CLEARLY STATED THAT VASANT VIHAR AREA WAS LESS PREFERABLE AS COMPARED TO SAFDARJUNG ENCLAVE IN 1981. IN THIS CONTEXT, THE IT IS TO BE OBSERVED THAT THE RATES PRESCRIBED IN NABHI S GUIDE ARE NOTHING BUT COMPILATION OF THE DDA S AUCTION RATES FOR VARIOUS YEARS AND THE SAFDAIJUNG RATES HAVE BEEN SUITABLY MODIFIED KEEPING IN VIEW THE ADVANTAGES / DISADVANTAGES OF THE SPECIFIC PROPE RTY UNDER VALUATION, SITUATED A T VASANT VIHAR. IT IS ALSO SEEN THAT THE VALUATION REPORT OF THE DVO IS A DETAILED REPORT IN WHICH THE DVO HAS EXPLAINED THE BASIS OF RATES ADOPTED BY HIM FOR MAKING THE VALUATION OF THE PROPERTY WHICH ARE AS PER THE PRESCRIB ED RULES & GUIDELINES. IN VIEW OF THESE FACTS, I AM OF THE OPINION THAT THE FMV OF THE PROPERTY AS ON 01.04.1981 SHOULD BE BASED ON THE REPORT OF THE DVO. IT ALSO NEEDS TO BE KEPT IN MIND THAT THE DVO IS A NEUTRAL VALUATION OFFICER WHO IS NOT UNDER ANY INS TRUCTION/OBLIGATION TO FAVOUR THE DEPARTMENT AND IS DUTY BOUND TO VALUE THE PROPERTIES REFERRED TO HIM TO THE BEST OF HIS JUDGEMENT AND IN ACCORDANCE WITH THE DULY LAID DOWN PROCEDURES AND GUIDELINES. THE DVO IS NOT EVEN EXPECTED TO ERR IN FAVOUR OF REVENU E. 4.3.3 AS FAR AS THE CONTENTION OF THE AR THAT THE AO HAS REFERRED THE PROPERTY FOR THE VALUATION TO THE DVO WITHOUT ANY REASON, IS CONCERNED, I AM OF THE VIEW THAT THE DECISION OF THE AO TO REFER THE PROPERTY FOR VALUATION TO THE DVO CARRIES IMPLIED ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 5 SA TISFACTION OF THE AO AND REFLECTS HIS OPINION THAT THE VALUE CLAIMED BY THE APPELLANT ON THE BASIS OF A VALUER S REPORT IS AT VARIANCE WITH ITS FAIR MARKET VALUE. NOWHERE IN THE PROVISIONS OF SECTION 55A OF THE ACT, IT HAS BEEN STATED THAT THE AO NEEDS TO RECORD HIS SATISFACTION IN WRITING. IN VIEW OF THIS, THE CONTENTION OF THE AR IS REJECTED. 4.4 ACCORDINGLY, THE ADDITION MADE BY THE AO BY ADOPTING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 ON THE BASIS OF THE REPORT SUBMITTED BY THE DVO WHIL E COMPUTING LONG TERM CAPITAL GAINS, IS UPHELD AND THE GROUNDS OF APPEAL ARE DISMISSED. 6. BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE APPELLANT HAD DULY DISCHARGED HIS ONUS BY OBTAINING A VALUATION REPORT FROM A GOVERNMEN T APPROVED VALUER FOR THE PURPOSE OF VALUING HIS RESIDENTIAL PROPERTY AS ON 01.04.1981 AND SUBMITTING THE SAME BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO SUBSTANTIATE HIS COMPUTATION OF CAPITAL GAINS. THE ASSESSING OFFICER, ON THE OTHER HAND, DID NOT IDENTIFY ANY DEFICIENCIES OR DEFECTS IN THE SAID VALUATION AND INSTEAD MECHANICALLY REFERRED THE MATTER TO THE DVO FOR VALUATION WITHOUT ANY APPLICATION OF MIND BY OBSERVING AS UNDER: '4.3 ON PERUSAL OF THE COMPETITION OF THE IN COME FOR THE YEAR UNDER CONSIDERATION IT WAS NOTICED THAT ASSESSEE HAS TAKEN COST OF ACQUISITION OF HIS SHARE OF PROPERTY AS ON 01.04.1981 AT RS. 7,02,345/ - AND AR OF THE ASSESSEE SUBMITTED COPY OF SALE DEED AND COPY OF VALUATION REPORT AS ON 01.04.1981. 4.4 IN ORDER TO ASCERTAIN THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 AND AS ON THE DATE OF EXECUTION OF SALE DEED THAT IS 28.10.2014, A REFERENCE HAS BEEN MADE TO THE VALUATION OFFICER U/S 55A OF THE ACT. IN REPLY OF THE FORESAID REFERENCE, TH E VALUATION REPORT AS DETERMINED BY DVO WAS RECEIVED IN THE OFFICE ON 21.12.2016. AS PER THE ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 6 SAID REPORT, FAIR MARKET VALUE OF THE SHARE OF THE ASSESSEE (I.E. 35%) SHARE ON 01.04.1981 WAS D ETE RMINED TO BE RS. 3,29,540 WHERE AS THE ASSESSEE HAS SHO WN FM V ON THE SAME DATE AT RS. 7,02,345/ - ....' 7. A PERUSAL OF THE ABOVE ORDER OF THE ASSESSING OFFICER SHOW S THAT THE ASSESSING OFFICER HAD NO REASON TO REFER THE VALUATION OF THE SAID PROPERTY TO THE DVO. SH E HAD NO INFORMATION AVAILABLE WITH HER TO P ROVE THAT THE VALUATION ADOPTED BY THE APPELLANT DID NOT REFLECT THE FAIR MARKET VALUE. FURTHER, THE ASSESSING OFFICER HAS NOT MENTIONED THE PARTICULARS OF SECTION UNDER WHICH A REFERENCE WAS MADE BY HER TO THE DVO. THUS, THE VALUATION OF APPELLANT S SHARE IN PROPERTY WAS ARBITRARILY REFERRED TO THE DVO FOR VALUATION U/S 53A OF THE ACT. HE RELIED ON THE DECISION OF HON BLE RAJASTHAN HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX (APPEALS) VS HOTEL JOSHI (2000) 242 ITR 478 (RAJ.) WHEREIN IT WAS HELD AS UNDER: 7. A PLAIN READING OF THE PROVISION SHOWS THAT AN ASSESSING OFFICER WITH A VIEW TO ASCERTAIN THE FAIR MARKET VALUE OF A CAPITAL ASSET, HAS A DISCRETION TO REFER TO THE VALUATION OFFICER, ONLY IN THE EVENTUALITIES PROVIDED IN THE SAID PROVISION. ON E OF THE EVENTUALITIES IS WHERE THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH THE ASSESSMENT MADE BY THE REGISTERED VALUER AND IN THE OPINION OF THE ASSESSING OFFICER, THE VALUE SO CLAIMED IS LESS THAN ITS FAIR MARKET VALUE. THUS, IN A CASE WHERE THE VALUE OF THE ASSET IS CLAIMED BY THE ASSESSEE ON THE BASIS OF REGULAR BOOKS OF ACCOUNT MAINTAINED FOR THE PURPOSE OF CONSTRUCTION OF THE ASSET AND NOT ON THE BASIS OF THE VALUATION OF THE REGISTERED VALUER, IT WILL NOT BE OPEN FOR THE ASSESSING OFFICER TO MAKE A REFERENCE TO THE DISTRICT VALUATION OFFICER UNLESS THE ASSESSING OFFICER FORMS AN OPINION THAT HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 7 NECESSARY TO DO SO. THUS, THE POWERS UNDER SECTION 5 5A CANNOT BE EXERCISED IN A ROUTINE MANNER. FOR INVOKING SUB - CLAUSE (II) OF CLAUSE (B) OF SECTION 55A, THE ASSESSING OFFICER IS REQUIRED TO FORM AN OPINION ON THE BASIS OF THE MATERIAL ON RECORD THAT REFERENCE TO THE DI STRI CT VALUATION OFFICER FOR ASCERTAI NING THE FAIR MARKET VALUE OF THE ASSET NECESSARY HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES. IT IS ALSO NECESSARY TO R ECORD AS TO WHY IT IS NECESSAR Y TO ADOPT SUCH A COURSE.' 8. IT WAS FURTHER SUBMITTED THAT M OREOVER, IT I S SETTLED LAW THAT THE PRIMARY BURDEN OF PROOF TO PROVE UNDERSTATEMENT OR CONCEALMENT OF INCOME IS ON THE REVENUE AND IT IS ONLY WHEN SUCH BURDEN IS DISCHARGED THAT IT WOULD BE PERMISSIBLE TO RELY UPON THE VALUATION GIVEN BY THE DVO. 9. HE ALSO RELIED ON THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS BAJRANG LAL BANSAL (2011) 335 ITR 572 (DEL.) WHERE IT WAS HELD THAT THE PRIMARY BURDEN TO PROVE UNDERSTATEMENT OR CONCEALMENT OF INCOME WAS ON THE REVENUE AND IT WAS ONLY WHEN SUCH BURDEN W AS DISCHARGED THAT WOULD BE PERMISSIBLE TO RELY UPON THE VALUATION GIVEN BY THE DVO. IT WAS ALSO HELD THAT THE OPINION OF THE DVO, PER SE, WAS NOT AN INFORMATION AND COULD NOT BE RELIED UPON WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED WHICH HAS NOT BEEN DO NE IN THIS CASE. THE RELEVANT EXTRACTS OF THE SAID DECISION ARE AS FOLLOWS: '7. IN ANY EVENT, THE OPINIO N OF THE DVO, PER SE, IS NOT AN INFORMATION AND CANNOT BE RELIED UPON 'WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED - WHICH HAS NOT BEEN DONE IN THE PRES ENT CASE. THE SUPREME COURT IN ITS ORDER DATED 19 - 10 - 2009 IN CIVIL APPEAL NO. 6973/2009 HAS HELD AS UNDER: - ' DELAY CONDONED. ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 8 LEAVE GRANTED. IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL DECIDED THE MATTER R IGHTLY IN FAVOUR OF THE ASSESSEE INASMUCH AS TH E TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSING AUTHORITY (AO) COULD NOT HAVE REFERRED THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER (DVO) WITHOUT BOOKS OF ACCOUNT BEING REJECTED. IN THE PRESENT CASE, A CATEGORICAL FINDING IS RECORDED BY THE TRIBUN AL THAT THE BOOKS WERE NEVER REJECTED. THIS ASPECT H AS NOT BEEN CONSIDERED BY THE HIGH COURT. IN THE CIRCUMSTANCES, RELIANC E PLACED ON THE REPORT OF THE DVO W AS MISCONCEIVED. FOR THE ABOVE REASONS, THE IMPUGNED JUDGMENT OF THE HIGH COURT IS SET ASIDE AND THE ORDER PASSED BY THE TRIBUNAL STANDS RESTORED TO THE FILE. ACCORDINGLY, ASSESSEE SUCCEEDS. 10. IT WAS ARGUED THAT A PPLYING THE ABOVE FACTS TO THE APPELLANT'S CASE, THE BOOKS OF ACCOUNTS OF THE APPELLANT OR THE VALUATION REPORT SUBMITTED BY THE APPEL LANT WERE NEVER REJECTED BY THE AO. IN THE ABSENCE OF REJECTION OF THE BOOKS OF ACCOUNTS/ VALUATION SUBMITTED BY THE APPELLANT AND IN THE ABSENCE OF ANY INFORMATION OR OPINION THAT THE VALUE OF IMMOVABLE PROPERTY SOLD BY THE APPELLANT VARIED FROM ITS FAIR MARKET VALUE, THE REFERENCE TO THE DVO WAS ILLEGAL AND VOID AB INITIO. SIMILAR FINDINGS ON THE PRINCIPLES RELIED ABOVE WERE ALSO MADE BY THE FOLLOWING CASES : HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE V. INCOME - TAX OFFICER 11981 ] 7 TAXMAN 13 (SC)/[ 1981 ] 131 ITR 597 (SC)/[1981 / 24 CTR 358 (SC) HON'BLE HIGH COURT OF DELHI IN THE CASE OF COMMISSIONER OF INCOME - TAX V. SMT. SHAKUNTALA DEVI [ 2009] 316 ITR 46 (DELHI)/[2009] 224 CTR 79 (DELHI) HON'BLE HIGH COURT OF DELHI IN THE CASE OF COMMISSIONER OF INC OME - TAX V. MANOJ JAIN [2007 ] ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 9 163 TAXMAN 223 (DELHI)/[2006] 287 ITR 285 (DELHI)/[2006] 200 CTR 327 (DELHI ) 11. IT WAS THEREFORE SUBMITTED THAT THE APPELLANT HAD RIGHTLY COMPUTED THE VALUE OF THE SAID PROPERTY AS ON 01.04.1981 AND IN THE ABSENCE OF ANY DEF ICIENCY OR DEFECT IN THE VALUATION OBTAINED BY THE GOVERNMENT APPROVED VALUER, THE REFERENCE TO THE DVO BY THE AO WAS ILLEGAL , INVALID AND VOID AB INITIO. 12. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE FULLY JUSTIFIED THE ORDERS OF THE LOWER A UTHORITIES. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE COMPUTED ITS LONG TERM CAPITAL GAINS ON SALE OF LAND BY TAKING FAIR MARKET VALUE OF LA ND AS ON 01.04.1981 AT RS.7,02,345/ - ON THE BASIS OF REGISTERED VALUER S REPORT. THE ASSESSING OFFICER MADE A REFERENCE TO THE DVO AND ON THE BASIS OF THE DVO S REPORT TAKEN THE FAIR MARKET VALUE OF LAND AS ON 01.04.1981 AT RS.3,29,540/ - FOR CALCULATING LO NG TERM CAPITAL GAINS. 14. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 15. WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS DAULAL MOHTA (HUF) (2014) 360 ITR 680 (BOM) WHEREIN IT HAS BEEN HELD AS UNDER: 4. THE TRIBUNAL IN ITS ORDER DATED JULY 23, 2004, HAS CATEGORICALLY OBSERVED THUS: '5. THE FIRST ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE REFERENCE MADE B Y THE ASSESSING ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 10 OFFICER TO THE DVO UNDER SECTION 55A IS BAD IN LAW UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS ISSUE, IN OUR CONSIDERED OPINION, IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE JUDGMENT IN THE CASE OF MS. RUBAB M . KAZERANI V. JOINT CIT REPORTED IN [2004] 91 ITD 429 (MUM) (TM). FURTHER, THE ASSESSEE ALSO COVERED BY THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL, THE CASE OF SMT. KRISHNABAITINGRE V. ITO REPORTED IN [2006] 101 ITD 317 (PUNE) WHEREIN IT HAS BEEN HELD THAT REFERENCE TO THE DVO CAN ONLY BE MADE IN CASES WHERE THE VALUE OF CAPITAL ASSET SHOWN BY THE ASSESSEE IS LESS THAN ITS FAIR MARKET VALUE OF LAND AS ON APRIL 1, 1981, SHOWN BY THE ASSESSEE ON THE BASIS OF THE APPROVED VALUER'S REPORT BEING MORE THAN IT S FAIR MARKET VALUE, REFERENCE UNDER SECTION 55A WAS NOT VALID. RESPECTFULLY FOLLOWING THE PROPOSITIONS LAID DOWN THESE TWO CASES BY THE CO - ORDINATE BENCHES WE UPHOLD THE CON TENTION OF THE ASSESSEE AND HOLD THAT THE REFERENCE MADE BY THE ASSESSING OFFICER TO THE DVO UNDER SECTION 55A IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE IS BAD IN LAW. THUS, ON THE SOLE GROUNDS OF APPEAL OF THE ASSESSEE HAS TO BE ALLOWED. 6. BEFORE PASSING, WE HAVE TO MENTION THAT THE ASSESSEE HAS SUB MITTED THE ARGUMENTS. AS ON THE BASIS OF THE LEGAL ASPECTS ITSELF WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, WE REFRAIN FROM UNDERTAKING THIS ACADEMIC EXERCISE OF DISPOSING THIS CASE ON THE MERITS.' 5. IN VIEW THEREOF THERE IS NO MERIT IN THE APPEAL. THE APPEAL STANDS DISMISSED. 16. HENCE, RESPECTFULLY FOLLOWING THE ABOVE, WE HOLD THAT THE REFERENCE TO THE DVO WAS NOT CORRECT AND THEREFORE, DELETE THE ADDITION OF RS.38,17,523/ - MADE BY THE REVENUE WHILE CALCULATING THE LONG TERM CAPITAL GAINS OF THE ASSESSEE. THUS, T HE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. ITA NO.5244/DEL/2018 VIJAY KUMAR SETH 11 1 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRON OUNCED IN THE OPEN COURT ON 29 /03 /2019 ) SD/ - SD/ - ( H. S. SIDHU ) (N. S . SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 /03 /2019 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR