Smt. Ratnakanta B. Agrawal, Bhusawal V. Income-tax Officer,

ITA 587/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9204 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N HONAV AR
• Keywords: Sale consideration of property below Jantri Value; Gift; Rectification of order; Principle of natural justice; Retrospective amendment; Question of law; Cost of acquisition; Fair market value; Valuation report
• Section: 143(3); 50C; 133(6); 12A; 131

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 587 /P U N/201 4 / ASSESS MENT YEAR : 20 09 - 10 SMT. RATNAKANTA B. AGRAWAL, C/O S.K. OIL INDUSTRIES, SHIVAJI NAGAR, BHUSAWAL - 425201 . / APPELLANT PAN: A BHPA8253D VS. THE INCOME TAX OFFICER , WARD 2 ( 1 ), JALGAON . / RESPONDENT / APPELLANT BY : SHRI C.H. NANIWADEKAR / RESPONDENT BY : S HRI A.N. HONAVAR, JCIT / DATE OF HEARING : 2 3 . 0 5 .201 7 / DATE OF PRONOUNCEMENT: 24 . 0 7 .201 7 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , NASHIK , DATED 09 . 0 1 .20 1 4 RELATING TO ASSESSMENT YEAR 20 0 9 - 10 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 2 2. THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL: - FOLLOWING GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER 1 . THE LEARNED CIT (APPEALS) ERRED ON FACTS AND IN LAW IN UPHOLDING ADDITION OF RS.26,67,922 MADE BY THE AO ON ACCOUNT OF CAPITAL GAIN ON SALE OF PROPERTY BY THE ASSESSEE. 2 . THE LE ARNED CIT (APPEALS) ERRED ON FACTS AND IN LAW IN UPHOLDING SALE CONSIDERATION OF PROPERTY SOLD BY THE ASSESSEE AT RS.1,07,31,000 AS AGAINST RS.87,21,000 CLAIMED BY THE ASSESSEE. THE REASONS ASSIGNED ARE WRONG AND UNTENABLE IN LAW. 3 . THE LEARNED CIT (APPEALS ) ERRED ON FACTS AND IN LAW IN UPHOLDING COST OF ACQUISITION OF THE SAID PROPERTY AT RS.3,31,512 AS AGAINST RS.4,61,538 ADOPTED BY THE ASSESSEE. 4 . THE LEARNED CIT (APPEALS) FAILED IN ADJUDICATING GROUND NO.1 RAISED BEFORE HIM REGARDING COST OF ACQUISITION O F THE SAID PROPERTY. 5 . THE LEARNED CIT (APPEALS) FAILED TO APPRECIATE THE FACTS OF THE CASE IN ITS PROPER PERSPECTIVE. HE FAILED TO APPRECIATE THAT THE ASSESSEE HAS RELIED ON VALUATION REPORTS OF THE GOVERNMENT REGISTERED VALUER AND ALSO FAILED TO APPRECIAT E THAT THE ASSESSMENT WAS BASED ON THE BASIS OF REPORT OF THE DIVISIONAL VALUATION OFFICER WHO HAS NOT ACCORDED ANY OPPORTUNITY TO THE APPELLANT TO REPRESENT ITS CASE AND THUS THE REPORT OF THE DIVISIONAL VALUATION OFFICER IS AGAINST THE PRINCIPLE OF NATUR AL JUSTICE. 3. THE ASSESSEE HAS FILED AN ADDITIONAL GROUND OF APPEAL WHICH READS AS UNDER: - THE LEARNED ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN FINALIZING THE ASSESSMENT ON THE BASIS OF DIRECTIONS/REPORT OF THE DISTRICT VALUATION OFFICER, BHOPAL WHEN THE VALUATION OFFICER HAD ALREADY GIVEN A REPORT IN THE MATTER. THE DISTRICT VALUATION OFFICER HAS NO JURISDICTION OVER THE MATTER AND AS SUCH THE ASSESSMENT IS VITIATED AND BAD IN LAW AND CONSEQUENTLY IS LIABLE TO BE SET ASIDE. IN ANY CASE T HE DISTRI CT VALUATION OFFICER DID NOT GIVE ANY OPPORTUNITY TO THE ASSESSEE TO PRESENT HER SAY AND THEREFORE PRINCIPLES OF NATURAL JUSTICE WERE VIOLATED AND AS SUCH THE ASSESSMENT IS BAD ON THIS COUNT ALSO. 4. THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE IS PRELIMINARY ISSUE RAISED AS TO WHETHER THE REPORT OF DVO WAS WITHOUT JURISDICTION AND AS SUCH, THE ASSESSMENT WAS VITIATED AND BAD IN LAW. SINCE IT DOES NOT INVOLVE ANY INVESTIGATION OF FACTS AND BEING JURISDICTIONAL ISSUE, THE SAME IS ADMITTED FOR AD JUDICATION. ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 3 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME DECLARING INCOME OF RS.6,66,970/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD DECLARED INCOME FROM LONG TERM CAPITAL GAINS ON SALE OF PROPERTY AT AMRAVATI ADMEASURING 0 H 38R. THE SAID PROPERTY WAS RECEIVED AS A GIFT FROM THE FATHER OF ASSESSEE. THE ASSESSEE HAD RECEIVED THE LAND ADMEASURING 1 HECTOR 56 R BY WAY OF GIFT, OUT OF WHICH SHE HAD SOLD LAND ADM EASURING 1 HECTOR 18R IN FINANCIAL YEAR 2001 - 02 TO SHRI P.K. SONI FOR RS.1.65 CRORES. OUT OF THE SAID AMOUNT, THE ASSESSEE PAID SUM OF RS.1.60 CRORES TO SHRI P.K. DESHMUKH FOR SURRENDERING HIS TENANCY RIGHTS ON THE WHOLE LAND OF 1H AND 56R. THE ASSESSEE THUS, RECEIVED SUM OF RS.5 LAKHS OUT OF SAID TRANSACTION AND THE SAME WAS OFFERED FOR TAXATION IN ASSESSMENT YEAR 2002 - 03. THE BALANCE LAND ADMEASURING 0.38R WAS SOLD BY THE ASSESSEE IN THE YEAR UNDER APPEAL FOR TOTAL CONSIDERATION OF RS.87 ,21,000/ - . T HE STAMP DUTY VALUATION UNDER SECTION 50C OF THE ACT WAS RS.1,07,31,000/ - . THE ASSESSEE HA D ALSO CALCULATED THE COST OF IMPROVEMENT ON THE SAID LAND OF 0.38R AT RS.38,97,436/ - . THE ASSESSING OFFICER NOTED THAT THE ASSESSEES FATHER HAD ACQUIRED THE SAID PR OPERTY PRIOR TO 1981 THROUGH POWER OF ATTORNEY AND THEREFORE, THE VALUATION OF THE PROPERTY AS ON 01.04.1981 DETERMINED BY THE ASSESSEE AT RS.4,61,538/ - WAS BASED ON THE VALUATION REPORT OF REGISTERED VALUER DATED 14.10.2008. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSEE REQUESTED THAT THE VALUATION OF THE SAID PROPERTY SHOULD BE REFERRED TO THE DEPARTMENTAL VALUER UNDER SECTION 50C OF THE ACT AS THE ASSESSEE WAS NOT IN AGREEMENT WITH THE STAMP DUTY VALUATION ADOPTED BY THE REVENUE AUTHORITIES. THE CASE OF ASSESSEE WAS REFERRED TO THE DEPARTMENTAL VALUATION OFFICER, NAGPUR UNDER SECTIONS 55A AND 50C OF THE ACT FOR DETERMINING THE VALUE OF COST OF ACQUISITION AS ON 01.04.1981 AND SALE CONSIDERATION AS ON 23.10.2008. THE VALUATION OFFICER, NAGPU R INTIMATED THE ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 4 PROPOSED VALUATION OF PROPERTY TO THE ASSESSEE UNDER SECTIONS 55A AND 50C OF THE ACT. HOWEVER, THE ASSESSEE OBJECTED TO THE SAID VALUATION ON THE ACCOUNT THAT THE SAID PROPERTY WAS UNDER LITIGATION AND THE SUIT WAS PENDING BEFORE THE HONB LE BOMBAY HIGH COURT. THE ASSESSEE POINTED OUT THAT TILL DATE THE PROPERTY WAS UNDER LITIGATION AND WAS SUB - JUDICE AND NO DEVELOPMENT COULD TAKE PLACE ON THE LAND SOLD BY THE ASSESSEE SINCE 2008. CONSIDERING THE ASSESSEES OBJECTIONS, THE VALUATION OFFIC ER VALUED THE PROPERTY UNDER SECTION 50C OF THE ACT AS ON 23.10.2008 I.E. DATE OF SALE AT RS.93,00,096/ - AND UNDER SECTION 55A OF THE ACT AT RS.3,31,512/ - , AS PER VALUATION REPORT DATED 01.11.2011 RECEIVED BY THE ASSESSING OFFICER ON 14.11.2011. ON THE NE XT DATE I.E. ON 15.11.2011, THE ASSESSING OFFICER RECEIVED LETTER FROM THE DVO, BHOPAL THAT STAMP DUTY VALUATION HAS NOT BEEN MENTIONED BY THE VALUATION OFFICER AND FURTHER, THE ASSESSMENT SHOULD BE MADE ON THE STAMP DUTY VALUATION DUE TO SEVERAL REASONS A S POINTED OUT IN THE SAID LETTER. THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN AS TO WHY THE VALUE OF PROPERTY AS ON DATE OF SALE BE NOT ADOPTED AT RS.1,07,31,000/ - , AS DIRECTED BY THE DVO, BHOPAL WHILE WORKING OUT THE INCOME FROM LONG TERM CAPITAL GAINS ON SA LE OF PROPERTY. THE ASSESSEE AGAIN REITERATED ITS CLAIM OF PENDENCY OF LITIGATION BEFORE DIFFERENT FORUMS INCLUDING THE HONBLE BOMBAY HIGH COURT AND IT WAS POINTED OUT THAT THE STAMP VALUATION AUTHORITY HAD ARRIVED AT THE VALUE OF STAMP DUTY OF RS.5,36, 550/ - PAYABLE BY THE PURCHASER OF ASSESSEES PROPERTY ON THE MARKET VALUE OF RS. 1,07,31,000/ - . THE PLEA OF ASSESSEE WAS THAT THE PENDING DISPUTE SHOULD BE CONSIDERED FOR VALUING THE PROPERTY. THE ASSESSING OFFICER VIDE PARA 18 NOTED THAT THE ASSESSEE HAD NOT FURNISHED COMPLETE DETAILS BEFORE THE VALUATION OFFICER, NAGPUR, WHICH HAD RESULTED IN REDUCING THE VALUE UNDER SECTION 50C OF THE ACT BY THE VALUATION OFFICER. HOWEVER, THE DVO, BHOPAL HAD DIRECTED TO ADOPT SALE VALUE OF THE PROPERTY AS PER STAMP DU TY VALUATION MADE ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 5 BY THE LOCAL REVENUE AUTHORITY UNDER SECTION 50C OF THE ACT. IN VIEW OF DIRECTIONS OF DVO, BHOPAL, THE VALUE OF PROPERTY UNDER CONSIDERATION WAS ADOPTED AS PER STAMP DUTY VALUATION UNDER SECTION 50C OF THE ACT AT RS.1.07 CRORES. 6. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER. 7. THE ASSESSEE BY WAY OF ADDITIONAL GROUND OF APPEAL HAS RAISED THE ISSUE OF EXERCISE OF JURISDICTION BY THE DISTRICT VALUATION OFFICER, BHOPAL, WHERE THE VALUATION OFFICER, NAGPUR HAD ALREADY GIVEN A REPOR T IN THE MATTER. HENCE, THE DVO AT BHOPAL HAD NO JURISDICTION OVER THE MATTER AND THE ASSESSMENT ORDER PASSED RELYING ON THE SAID REPORT OF DVO WAS VITIATED AND BAD IN LAW AND INVALID, SINCE THE DVO HAD NO JURISDICTION OVER THE MATTER. 8. THE LEARNED AUT HORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN HIERARCHY OF GOVERNMENT VALUERS, THE TOP PERSON WAS THE REGIONAL VALUATION OFFICER, WHO HAD SUPERVISORY POWERS UNDER WHOM WAS THE DISTRICT VALUATION OFFICER (DVO), VALUATION OFFICER (VO) AND THE A SSESSING VALUATION OFFICER I.E. AVO, WHO HAD JURISDICTION TO LOOK INTO THE MATTER OF SPECIFIC MONETARY JURISDICTION. ATTENTION WAS DRAWN TO THE DEFINITION OF VALUATION OFFICER UNDER SECTION 2(R) OF THE WEALTH TAX ACT. HE FURTHER REFERRED TO THE PAPER BOO K AND POINTED OUT THAT THE NOTICE FOR VALUATION WAS GIVEN BY THE VALUATION OFFICER, WHO IN TURN, SENT THE REPORT AND THE ASSESSING OFFICER PROCEEDED TO ESTIMATE THE COST OF THE LAND IN THE HANDS OF ASSESSEE, THE BASIS OF REPORT OF VO. THE DOCUMENTS IN THI S REGARD ARE PLACED AT PAGES 2 TO 6 OF THE PAPER BOOK. HE FURTHER REFERRED TO THE RULE 3A OF WEALTH TAX RULES, WHEREIN THE RVO HAS SUPERVISORY POWERS AND THE DVO, VO AND AVO WERE TO CARRY OUT THE FUNCTIONS ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 6 OF VALUATION OFFICER. THE SAID FUNCTIONS WERE TO BE CARRIED OUT AS ASSIGNED. ATTENTION WAS DRAWN TO THE CLAUSES (I) TO (III), WHERE THE EXERCISE OF POWER OF SEVERAL OFFICERS WAS VALUE - WISE. THE PROVISO THEREUNDER PROVIDES THAT THE DVO MAY PERFORM SUCH FUNCTIONS AS UNDER THE JURISDICTION PROVIDED. FUR THER, THE VOS POWER TO BE EXERCISED IS PROVIDED. HE STRESSED THAT THE DVO DOES NOT SIT IN SUPERVISORY POWERS. ATTENTION WAS DRAWN TO DATE - WISE EVENTS CHART IN THIS REGARD AND IT IS POINTED OUT THAT THE DVO VIDE LETTER PLACED AT PAGE 119 OF THE PAPER BOO K DIRECTS THE ASSESSING OFFICER TO IGNORE THE VALUATION REPORT OF VO AND COMPLETE THE ASS ESSMENT ON STAMP DUTY VALUATION, WHICH WAS INCORRECT AND INVALID. FURTHER, ATTENTION WAS DRAWN TO THE COMMUNICATION BETWEEN THE ASSESSING OFFICER, DVO AND THE ASSESSE E AND IT WAS POINTED OUT THAT THE DVO HAS NO SUPERVISORY POWERS. IT WAS FURTHER STATED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO FOLLOW THE VALUATION REPORT OF VALUATION OFFICER, WHICH HE HAS NOT DONE. ATTENTION WAS DRAWN TO THE COPY OF CIRCULAR PLACED AT PAGE 175 OF THE PAPER BOOK, WHEREIN THE FUNCTIONS OF VALUATION OFFICER ARE REFERRED TO AND IT WAS STRESSED BY HIM THAT THE REPORT WAS BINDING UNLESS AND UNTIL THE VALUATION OFFICER CORRE CTS THE SAME UNDER SECTION 35 OF THE WEALTH TAX ACT. HE REFERRED TO THE PROVISIONS OF SECTION 35(AAA) OF THE WEALTH TAX ACT AND POINTED OUT THAT THE VALUATION OFFICER MAY WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD RECTIFY THE VALUATION REPORT. HOWEVER, THERE WAS NO QUESTION OF REVISION OF VALUE ON THE BASIS OF REPORT OF DVO AS HE HAD NO SUPERVISORY FUNCTIONS. ATTENTION WAS DRAWN TO THE RATIO LAID DOWN BY JABALPUR BENCH OF TRIBUNAL IN WTO VS. AJIT SINGH MALHOTRA (1990) 32 ITD (JAB) 592 . HE FURTHER POINTED OUT THAT THE ASSESSEE HAD VALUED THE SAID PROPERTY AT RS.87 LAKHS, WHEREAS AS PER THE REPORT OF VALUATION OFFICER, THE VALUE WAS RS. 93 LAKHS UNDER SECTION 50C OF THE ACT, WHICH WAS LESS THAN 10% AND HENCE, THE VALUE DECLARED ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 7 BY THE AS SESSEE SHOULD BE ADOPTED. HE FURTHER POINTED OUT THAT THERE IS NO MERIT IN REFERENCE MADE UNDER SECTION 55A OF THE ACT FOR COMPUTING THE COST OF ACQUISITION AS ON 01.04.1981, IN VIEW OF RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. PUJA PRIN TS (2014) 360 ITR 697 (BOM) . 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 10. ON PERUSAL OF RECORD AND AFTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES, THE PRE LIMINARY ISSUE WHICH IS RAISED BY WAY OF ADDITIONAL GROUND OF APPEAL IS A PURELY LEGAL GROUND OF APPEAL, WHICH CHALLENGES THE JURISDICTION OF THE ASSESSING OFFICER IN COMPLETING ASSESSMENT BOTH UNDER SECTIONS 50C AND 55A OF THE ACT. IN THE FACTS OF THE CA SE, THE ASSESSEE HAD SOLD PROPERTY AT AMRAVATI ADMEASURING 0 H 38R. THE ASSESSEE HAD RECEIVED HER SHARE IN THE SAID PROPERTY AS GIFT FROM HER FATHER AND HAD SOLD ONE PORTION OF THE PROPERTY MUCH EARLIER . D URING THE YEAR UNDER CONSIDERATION , T HE ASSESSEE RECEIVED TOTAL CONSIDERATION OF RS.87,21,000/ - ON SALE OF BALANCE SHARE IN THE PROPERTY . ON THE OTHER HAND, THE STAMP DUTY AUTHORITIES HAD ADOPTED THE VALUATION OF SAID PLOT OF LAND UNDER SECTION 50C OF THE ACT AT RS.1,07,31,000/ - . THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD MADE REFERENCE TO THE VALUATION OFFICER UNDER SECTION 50C OF THE ACT AS THE ASSESSEE HAD OBJECTED TO THE VALUATION MADE BY THE STAMP VALUATION AUTHORITIES. THE ASSESSING OFFICER ALSO REFERRED TO THE VALUATIO N OFFICER THE COST OF ACQUISITION OF LAND AS PER SECTION 55A OF THE ACT. THE FIRST OBJECTION RAISED BY THE ASSESSEE IS AGAINST INVOKING THE PROVISIONS OF SECTION 55A OF THE ACT, UNDER WHICH, COST OF ACQUISITION DECLARED BY THE ASSESSEE HAS BEEN ADOPTED AT A FIGURE LESSER THAN THE VALUE DECLARED BY THE ASSESSEE. IN THIS REGARD, I FIND THAT THE ISSUE IS ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 8 SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF THE HONBLE BOMBAY HIGH COURT IN CIT VS. PUJA PRINTS (SUPRA), WHEREIN THE HONBLE HIGH COURT HELD AS UNDER: - 6 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE IMPUGNED ORDER DATED 18 FEBRUARY, 2011 ALLOWING THE RESPONDENT ASSESSEE'S APPEAL HOLDING THAT NO REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER CAN BE MADE UNDER SECTION 55A OF THE ACT, ONLY FOLLOWS THE DECISION OF THIS COURT IN THE MATTER OF DAULAL MOHTA HUF (SUPRA). THE REVENUE HAS NOT BEEN ABLE TO POINT OUT HOW THE AFORESAID DECISION IS INAPPLICABLE TO THE PRESENT FACTS NOR HAS THE REVENUE POINTED OUT THAT THE DECISION IN DAULAL MOHTA HUF (SUPRA) HAS NOT BEEN ACCEPTED BY THE REVENUE. ON THE AFORESAID GROUND ALONE, THIS APPEAL NEED NOT BE ENTERTAINED. HOWEVER, AS SUBMISSIONS WERE MADE ON MERITS, WE HAVE INDEPENDENTLY EXAMINED THE SAME . 7 . WE FIND THAT SECTION 55A(A) OF THE ACT VERY CLEARLY AT THE RELEVANT TIME PROVIDED THAT A REFERENCE COULD BE MADE TO THE DEPARTMENTAL VALUATION OFFICER ONLY WHEN THE VALUE ADOPTED BY THE ASSESSEE WAS LESS THAN THE FAIR MARKET VALUE. IN THE PRESENT CASE, IT IS AN UNDISPUTED POSITION THAT THE VALUE ADOPTED BY THE RESPONDENT - ASSESSEE OF THE PROPERTY AT RS.35.99 LAKHS WAS MUCH MORE THAN THE FAIR MARKET VALUE OF RS.6.68 LAKHS EVEN AS DETERMINED BY THE DEPAR TMENTAL VALUATION OFFICER. IN FACT, THE ASSESSING OFFICER REFERRED THE ISSUE OF VALUATION TO THE DEPARTMENTAL VALUATION OFFICER ONLY BECAUSE IN HIS VIEW THE VALUATION OF THE PROPERTY AS ON 1981 AS MADE BY THE RESPONDENT - ASSESSEE WAS HIGHER THAN THE FAIR MA RKET VALUE. IN THE AFORESAID CIRCUMSTANCES, THE INVOCATION OF SECTION 55A(A) OF THE ACT IS NOT JUSTIFIED. 8. THE CONTENTION OF THE REVENUE THAT IN VIEW OF THE AMENDMENT TO SECTION 55A(A) OF THE ACT IN 2012 BY WHICH THE WORDS 'IS LESS THEN THE FAIR MARKET VALUE' IS SUBSTITUTED BY THE WORDS ' 'IS AT VARIANCE WITH ITS FAIR MARKET VALUE' IS CLARIFACTORY AND SHOULD BE GIVEN RETROSPECTIVE EFFECT. THIS SUBMISSI ON IS IN FACE OF THE FACT THAT THE 2012 AMENDMENT WAS MADE EFFECTIVE ONLY FROM 1 JULY 2012. THE PARLIAMENT HAS NOT GIVEN RETROSPECTIVE EFFECT TO THE AMENDMENT. THEREFORE, THE LAW TO BE APPLIED IN THE PRESENT CASE IS SECTION 55A(A) OF THE ACT AS EXISTING DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2006 - 07. AT THE RELEVANT TIME, VERY CLEARLY REFERENCE COULD BE MADE TO DEPARTMENTAL VALUATION OFFICER ONLY IF THE VALUE DECLARED BY THE ASSESSEE IS IN THE OPI NION OF ASSESSING OFFICER LESS THAN ITS FAIR MARKET VALUE. 9. THE CONTENTION OF THE REVENUE THAT THE REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER BY THE ASSESSING OFFICER IS SUSTAINABLE IN VIEW OF SECTI ON 55A(A) (II) OF THE ACT IS NOT ACCEPTABLE. THIS IS FOR THE REASON THAT SECTION 55A(B) OF THE ACT VERY CLEARLY STATES THAT IT WOULD APPLY IN ANY OTHER CASE I.E. A CASE NOT COVERED BY SECTION 55A(A) OF THE ACT. IN THIS CASE, IT IS AN UNDISPUTABLE POSITION THAT THE ISSUE IS COVERED BY SECTION 55A(A) OF THE ACT. THEREFORE, RESORT CANNOT BE HAD TO THE RESIDUARY CLAUSE PROVIDED IN SECTION 55A(B)(II) OF THE ACT. IN VIEW OF THE ABOVE, THE CBDT CIRCULAR DATED 25 NOVEMBER 1972 CAN HAVE NO APPLICATION IN THE FACE OF THE CLEAR POSITION IN LAW. THIS IS SO AS THE UNDERS TANDING OF THE STATUTORY PROVISIONS BY THE REVENUE AS FOUND IN CIRCULAR ISSUED BY THE CBDT IS NOT BINDING UPON THE ASSESSEE AND IT IS OPEN TO AN ASSESSEE TO CONTEND TO THE CONTRARY. 10. THE CONTENTION OF THE REVENUE THAT THE ASSESSING OFFICER IS ENTITL ED TO REFER THE ISSUE OF VALUATION OF THE PROPERTY TO THE DEPARTMENTAL VALUATION OFFICER IN EXERCISE OF ITS POWER UNDER SECTIONS 131 , 133(6) AND 142(2) OF THE ACT IS ENTIRELY BASED UPON THE DECISION OF THE GUWAHATI HIGH COURT IN SMT. AMIYA ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 9 BALA PAUL (SUPRA). HOWEVER, THE APEX COURT IN SMT. AMIYA BALA PAUL (SUPRA) HAS REVERSED THE DECISION OF THE GUWAHATI HIGH COURT AND HELD THAT IF THE POWER TO REFER ANY DISPUTE WITH REGARD TO THE VALUATION OF THE PROPERTY WAS ALREADY AVAILABLE UNDER SECTIONS 131(1) , 136(6 ) AND 142(2) OF THE ACT, THERE WAS NO NEED TO SPECIFICALLY EMPOWER THE ASSESSING OFFICER TO DO SO IN CIRCUMSTANCES SPECIFIED UNDER SECTION 55A OF THE AC T. IT FURTHER HELD THAT WHEN A SPECIFIC PROVISION UNDER WHICH THE REFERENCE CAN BE MADE TO THE DEPARTMENTAL VALUATION OFFICER IS AVAILABLE, THERE IS NO OCCASION FOR THE ASSESSING OFFICER TO INVOKE THE GENERAL POWERS OF ENQUIRY. IN VIEW OF THE ABOVE AND PA RTICULARLY IN VIEW OF CLEAR PROVISIONS OF LAW AS EXISTING DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2006 - 07, WE ARE OF THE VIEW THAT QUESTIONS (A) AND (B) DO NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. REGARDING QUESTION (C): - 11 . THE TRIBUNAL BY ITS IMPUGNED ORDER HAS MERELY REMANDED THE ISSUE TO THE ASSESSING OFFICER TO DETERMINE THE DATE ON WHICH THE RESPONDENT - ASSESSEE ACQUIRED THE PROPERTY FOR THE PURPOSE OF WORKING OUT THE COST OF ACQUISITION. NO SPECIFIC SUBMISSIONS IN REGARD TO THIS ISSUE WAS MADE BY THE REVENUE DURING THE ORAL SUBMISSIONS. IN ANY EVENT, AN ORDER OF REMAND IN THESE FACTS DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. 12. ACCORDINGLY, WE SEE NO REASON TO ENTERTAIN QUESTIONS (A), (B) AND (C) AS FORMULATED BY THE REVENUE AS THEY DO NOT RAISE ANY SUBSTANTIAL QUESTIONS OF LAW. ACCORDINGLY, APPEAL IS DISMISSED WITH NO ORDER AS TO COSTS. 11. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. DAULAL MOHTA (HUF) REPORTED IN 360 ITR 680 HAS HELD THAT REFERENCE TO DVO CAN ONL Y BE MADE IN A CASE WHERE VALUE OF ASSET SHOWN BY THE ASSESSEE IS LESS THAN ITS FAIR MARKET VALUE OF THE LAND. 12. FOLLOWING THE SAME PARITY OF REASONING, I HOLD THAT NO REFERENCE CAN BE MADE UNDER SECTION 55A OF THE ACT IN ORDER TO VALUE THE COST OF ACQU ISITION OF PROPERTY AS ON 01.04.1981 AT A FIGURE LESSER THAN THE VALUE DECLARED BY THE ASSESSEE. ACCORDINGLY, THE ORDER OF CIT(A) IS REVERSED IN THIS REGARD. 1 3 . NOW, COMING TO THE NEXT OBJECTION RAISED BY THE ASSESSEE IS IN RESPECT OF EXERCISE OF JURISD ICTION AND POWER UNDER SECTION 50C OF THE ACT. UNDER THE SAID SECTION, IT IS PROVIDED THAT WHERE THE ASSESSEE IS NOT AGREEABLE TO THE VALUE ADOPTED BY THE STAMP DUTY VALUATION AUTHORITY, THEN THE ASSESSEE CAN ASK THE ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 10 ASSESSING OFFICER TO MAKE REFERENCE TO THE VALUATION OFFICER IN ORDER TO DETERMINE THE MARKET VALUE OF THE PROPERTY. THE ASSESSEE HAD DECLARED SALE CONSIDERATION AT RS.87,21,000/ - , WHEREAS AS PER STAMP DUTY VALUATION, THE VALUE WAS AT RS.1,07,31,000/ - . THE ASSESSEE IN THIS REGARD POINTED OUT THAT THERE WAS DISPUTE IN THE TITLE OF PROPERTY AND A CIVIL SUIT WAS PENDING IN THE CIVIL COURT OF AMRAVATI AS ON THE DATE OF SALE AND ASKED THE ASSESSING OFFICER TO MAKE REFERENCE TO THE VALUATION OFFICER. THE ASSESSING OFFICER VIDE LETTER DATED 23.08.2 011 REFERRED THE SAID VALUATION TO THE VALUATION OFFICER, INCOME TAX DEPARTMENT NAUPADA, THANE AND ASKED HIM TO DETERMINE THE FAIR MARKET VALUE AS ON 01.04.1981 AND FAIR MARKET VALUE AS ON DATE OF TRANSFER FOR THE PURPOSE OF CAPITAL GAINS TAX. THE COPY OF THE SAID LETTER IS PLACED AT PAGES 95 AND 96 OF THE PAPER BOOK. THE VALUATION OFFICER ISSUED NOTICE TO THE ASSESSEE DATED 14.09.2011 ASKING FOR THE DETAILS AND ALSO FOR INSPECTION OF THE PROPERTY. FURTHER, VIDE LETTER DATED 10.10.2011, THE ASSESSEE WAS INFORMED THAT THE INSPECTION OF PROPERTY WOULD TAKE PLACE ON 14.10.2011, COPY OF THE SAME IS PLACED AT PAGE 99 OF THE PAPER BOOK. ON 20.10.2011, THE VALUATION OFFICER, NAGPUR (MS), COPY OF WHICH IS PLACED AT PAGES 100 TO 102 OF THE PAPER BOOK, SHOW CAUSED THE ASSESSEE THAT HE WAS PROPOSING TO ESTIMATE THE FAIR MARKET VALUE AS ON 01.04.1981 AT RS.3,31,512/ - AS AGAINST THE VALUE DECLARED BY THE ASSESSEE AT RS.4,61,538/ - . ON THE SAID DATE I.E. 20.10.2011, COPY OF WHICH IS PLACED AT PAGES 103 TO 105 OF THE PA PER BOOK, THE VALUATION OFFICER, NAGPUR ALSO PROPOSED TO ESTIMATE THE FAIR MARKET VALUE AS ON THE DATE OF SALE I.E. 23.10.2008 AT RS.95,38,560/ - AS AGAINST THE VALUE DECLARED BY THE ASSESSEE IN SALE DEED AT RS.87,21,000/ - . FURTHER, THE ASSESSEE IN REPLY, FURNISHED ITS SUBMISSIONS WHICH ARE PLACED AT PAGES 106 TO 112 OF THE PAPER BOOK. THE VALUATION OFFICER IN RESPONSE THERETO, FURNISHED ESTIMATE VALUATION REPORT UNDER SECTION 50C OF THE ACT BY ALLOWING DEDUCTION FACTOR OF 15% TO THE PRELIMINARY ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 11 VALUATION AND ESTIMATED THE VALUE AT RS.87,21,000/ - . THE COPY OF THE SAID COMMUNICATION IS PLACED AT PAGES 113 TO 118 OF THE PAPER BOOK. THE ASSESSEE IN THIS REGARD HAS STRESSED THAT WHERE THE PROCEEDINGS BEFORE THE VALUATION OFFICER HAVE BEEN COMPLETED, THEN THE SAME COULD NOT BE DISTURBED, IN VIEW OF THE ORDER OF TRIBUNAL IN THIS REGARD. 1 4 . FURTHER, ON 15.11.2011, THE DISTRICT VALUATION OFFICER ISSUED A LETTER TO THE ASSESSING OFFICER REFERRING TO THE FINAL ASSESSMENT BY THE VALUATION OFFICER UNDER SECTION 50C OF THE ACT AND POINTED OUT THAT THE ASSESSMENT SHOULD BE COMPLETED ON STAMP DUTY VALUATION DUE TO DIFFERENT REASONS AS ENUMERATED IN THE LETTER PLACED AT PAGE 119 OF THE PAPER BOOK. IT WAS CLEARLY STATED BY HIM THAT THE STAMP DUTY HAS NOT BEEN MENTIONED B Y THE VALUATION OFFICER TO THIS OFFICE AND FURTHER, WHERE THE VALUATION WAS LESSER THAN STAMP DUTY VALUATION, HENCE, VALUATION COULD NOT BE USED BY THE ASSESSEE , AMONGST THE OTHER REASONS RAISED. IN RESPONSE THERETO, THE ASSESSING OFFICER ISSUED A LETTER DATED 22.11.2011 TO THE ASSESSEE, WHEREIN HE REFERS TO THE PROPOSAL MADE BY THE VALUATION OFFICER, NAGPUR AND ALSO REFERS TO THE LETTER RECEIVED FROM THE DISTRICT VALUATION OFFICER ON 21.11.2011 INTIMATING THAT WHILE MAKING ASSESSMENT, THE VALUATION OF PRO PERTY MAY BE TAKEN AS PER STAMP DUTY VALUATION. THE ASSESSEE SUBMITTED ITS REPLY ON 25.11.2011 AND STRESSED THAT SINCE THE PROPERTY OF ASSESSEE WAS UNDER DISPUTE SINCE 2002 AND THE LEGAL MATTERS WERE DISPUTED AND PENDING BEFORE THE REVENUE DEPARTMENT, CIV IL COURT, AMRAVATI AND THE HIGH COURT, THE MATTER BE KEPT IN PENDING. THE ASSESSEE MADE VARIOUS OTHER SUBMISSIONS BEFORE THE ASSESSING OFFICER AND STRESSED THAT THE VALUATION COMPLETED BY THE VALUATION OFFICER AT RS.93,00,096/ - SHOULD BE ADOPTED. THE ASS ESSEE WAS AGGRIEVED BY THE ORDER OF THE DVO AND ALSO HE FILED COMMUNICATION TO THE DVO AND POINTED OUT THAT SINCE NO ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 12 OPPORTUNITY OF HEARING WAS GRANTED BY THE DVO AT BHOPAL, THEN THE ASSESSEE WAS PREVENTED BY PRINCIPLES NATURAL JUSTICE IN PUTTING UP ITS CA SE. MEANWHILE, THE VALUATION OFFICER VIDE LETTER DATED 28.11.2011 SUBMITTED A CLARIFICATION IN RESPECT OF ALL THE POINTS RAISED BY THE DVO WHICH ARE PLACED AT PAGE 127 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT THE REVIEW SHOULD BE CONCLUDED BY THE DVO, B HOPAL AND THE DECISION SHOULD BE COMMUNICATED AT THE EARLIEST. MEANWHILE, VIDE LETTER DATED 27.11.2011 , THE DVO ISSUED INSTRUCTIONS TO THE ASSESSING OFFICER TO ADOPT THE STAMP DUTY VALUATION FIXED BY THE LOCAL REVENUE AUTHORITIES AND NOTE HAS BEEN PUT BY THE DVO IN HIS HAND THAT ALL THE CASES BEFORE SENDING TO ITO CONCERNED ARE TO BE REVIEWED FROM THE DVO, BHOPAL DURING HIS VISIT TO THE VALUATION CELL, NAGPUR. THE ASSESSING OFFICER IN TURN, FINALIZED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT BY TAKIN G THE STAMP DUTY VALUATION AS THE SALE CONSIDERATION AFTER ACKNOWLEDGING THE FACT THAT THE CIVIL CASE WAS PENDING BEFORE THE CIVIL COURT, AMRAVATI. HOWEVER, HE POINTED OUT THAT THERE WAS NO CASE PENDING WITH REFERENCE TO THE VALUATION OF PROPERTY BEFORE A NY COURT OF LAW OR REVENUE AUTHORITIES EXCEPT, THE CIVIL CASE IN THE CIVIL COURT OF AMRAVATI. THE GRIEVANCE OF ASSESSEE FURTHER IS THAT EVEN THE CIT(A) DID NOT TAKE INTO CONSIDERATION THE SUBMISSIONS MADE BEFORE HIM ON DIFFERENT DATES POINTING OUT THAT TH E SAID VALUATION COMPLETED BY THE DVO WAS AGAINST THE PRINCIPLES OF LAW. 1 5 . IN ORDER TO ADJUDICATE THE ISSUE, IT IS NECESSARY TO LOOK INTO THE POWERS OF VALUATION OFFICER WHILE CARRYING OUT THE VALUATION OF ANY IMMOVABLE ASSET. UNDER SECTION 2(R) OF TH E WEALTH TAX ACT, DEFINES VALUATION OFFICER TO BE A PERSON APPOINTED AS VALUATION OFFICER UNDER SECTION 12A OF THE SAID ACT AND INCLUDES THE REGIONAL VALUATION OFFICER AND DISTRICT VALUATION OFFICER AND THE ASST. VALUATION OFFICER , RESPECTIVELY . NOW, COMI NG TO THE SECTION 12A OF THE ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 13 WEALTH TAX ACT , THE CENTRAL GOVERNMENT IS AUTHORIZED TO APPOINT AS MANY VALUATION OFFICERS AS IT THINKS FIT. THEN CLAUSE (2) IS WITH REGARD TO APPOINTMENT OF OVERSEARS, SURVEYORS AND ASSESSORS AS MAY BE NECESSARY TO ASSIST THE VALUATION OFFICER IN THE PERFORMANCE OF THEIR FUNCTIONS. THE PROCEDURE OF REFERENCE TO THE VALUATION OFFICER IS AS PER SECTION 16A OF THE WEALTH TAX ACT, WHEREIN THE ASSESSING OFFICER IS EMPOWERED TO MAKE REFERENCE OF VALUATION OF ANY ASSET TO THE VALUAT ION OFFICER AND THE PROCEDURE TO BE FOLLOWED IN THIS REGARD I.E. REFERENCE TO BE MADE TO THE VALUATION OFFICER BY THE ASSESSING OFFICER AND THEN, NOTICE OF HEARING TO BE ALLOWED BY THE VALUATION OFFICER AND THEREAFTER, PASSING AN ORDER IN WRITING, ESTIMATI NG THE VALUE OF ASSET, COPY OF WHICH IS TO BE SENT TO THE ASSESSING OFFICER AND THE ASSESSEE . ON RECEIPT OF THE SAID ORDER FROM THE VALUATION OFFICER, THE ASSESSING OFFICER SHALL, SO FAR AS THE VALUATION OF ASSET IN QUESTION IS CONCERNED, PROCEED TO COMPL ETE THE ASSESSMENT IN CONFORMITY WITH THE ESTIMATE OF VALUATION OFFICER AS PER CLAUSE 16A(6) OF THE WEALTH TAX ACT. UNDER RULE 3A OF THE WEALTH TAX RULES, THE REGIONAL VALUATION OFFICER IS TO EXERCISE HIS POWERS WITHIN SUCH AREAS AS THE BOARD MAY DIRECT A ND ALSO TO DO GENERAL SUPERVISION OVER THE WORK OF DISTRICT VALUATION OFFICER, VALUATION OFFICER AND THE ASST. VALUATION OFFICER. FURTHER, AS PER CLAUSE (2) TO RULE 3A OF THE WEALTH TAX RULES, THE DISTRICT VALUATION OFFICER, THE VALUATION OFFICER AND THE ASST. VALUATION OFFICER SHALL PERFORM THE FUNCTIONS OF VALUATION OFFICER IN RESPECT OF SUCH AREAS AND IN RELATION TO SUCH CLASSES OF ASSETS AS THE BOARD MAY DIRECT. THEREAFTER, UNDER CLAUSE (3), JURISDICTION OF EACH OF THE VALUATION OFFICER I.E. DISTRICT VALUATION OFFICER, VALUATION OFFICER AND THE ASST. VALUATION OFFICER IS PROVIDED, WHICH IS LINKED TO THE VALUE OF ASSET TO BE VALUED. WHERE THE VALUE OF ASSET AS DECLARED IN THE RETURN OF WEALTH MADE BY THE ASSESSEE EXCEEDS RS.300 LAKHS OR IF THE ASSET IS NOT DISCLOSED AND THE VALUE OF ASSET IN THE OPINION OF THE ASSESSING OFFICER EXCEEDS THE AFORESAID ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 14 AMOUNT, THEN THE FUNCTIONS SHALL BE PERFORMED BY THE DISTRICT VALUATION OFFICER. SIMILARLY, THE FUNCTIONS OF THE VALUATION OFFICER ARE IN RESPECT OF VALUE OF ASSET EXCEEDING RS.40 LAKHS BUT NOT EXCEEDING RS.300 LAKHS AND IN RESPECT OF ASST. VALUATION OFFICER, EXERCISE OF JURISDICTION IN RESPECT OF VALUE OF ITS ASSET WHICH DOES NOT EXCEED RS.10 LAKHS. IT IS PROVIDED THEREUNDER THAT THE DISTRICT VALUATION OFF ICER HAVING JURISDICTION IN RESPECT OF AREA MAY, IF HE CONSIDERS NECESSARY OR EXPEDIENT TO DO SO , FOR THE PURPOSE OF PROPER AND EFFICIENT MANAGEMENT OF THE WORK OF VALUATION, HIMSELF PERFORMS SUCH FUNCTIONS IN RELATION TO ANY ASSET REFERRED TO IN CLAUSE (2 ). SIMILARLY, THE VALUATION OFFICER HAVING JURISDICTION IN RESPECT OF AREA MAY, FOR THE PURPOSE OF PROPER AND EFFICIENT MANAGEMENT HIMSELF PERFORM THE FUNCTIONS REFERRED TO IN CLAUSE (3). AS PER CLAUSE (4), IT IS PROVIDED THAT WHERE THE VALUATION OF ANY ASSET, BEING BUILDING OR LAND OR ANY RIGHT IN ANY BUILDING OR LAND REFERRED TO THE DISTRICT VALUATION OFFICER, THE VALUATION OFFICER OR THE ASST. VALUATION OFFICER, AS THE CASE MAY BE, IS PENDING WITH HIM ON 13.02.2009, BEING THE DATE OF COMMENCEMENT OF WE ALTH TAX (SECOND AMENDMENT) RULES, 2009, THEN AS PER CLAUSE (I), THE DISTRICT VALUATION OFFICER SHALL TRANSFER THE REFERENCE TO THE VALUATION OFFICER IF THE VALUE OF ASSET AS DECLARED IN THE RETURN MADE BY THE ASSESSEE DOES NOT EXCEED RS.300 LAKHS. SIMILA RLY, AS PER SUB - CLAUSE (II), THE VALUATION OFFICER SHALL TRANSFER THE REFERENCE TO THE ASST. VALUATION OFFICER WHERE THE VALUE OF ASSE T DOES NOT EXCEED RS.40 LAKHS. IN VIEW OF THE PROVISIONS OF RULE 3A OF THE WEALTH TAX RULES, WHICH PROVIDES THE JURISDICT ION OF VALUATION OFFICER, REGIONAL VALUATION OFFICER IS EXERCISING THE SUPERVISORY POWERS OVER THE WORK OF DISTRICT VALUATION OFFICER, VALUATION OFFICER AND THE ASST. VALUATION OFFICER. HOWEVER, THE THREE VALUATION OFFICERS UNDER THE REGIONAL VALUATION OF FICER I.E. THE DISTRICT VALUATION OFFICER, VALUATION OFFICER AND THE ASST. VALUATION OFFICER HAVE TO PERFORM THE DUTIES AND FUNCTIONS OF ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 15 VALUATION OFFICER IN RESPECT OF SUCH AREAS AND IN RELATION TO SUCH CLASS OF CASES AS THE BOARD MAY PRESCRIBE. FURTHER, CLAUSE (3) TO RULE 3A OF THE WEALTH TAX RULES VERY CLEARLY PROVIDES THE DISTRIBUTION OF WORK OF VALUATION BETWEEN THE THREE OFFICERS I.E. DVO, VO AND THE AVO ON THE BASIS OF VALUE OF ASSET DISCLOSED IN THE RETURN MADE BY THE ASSESSEE OR WHERE NO SUCH VALU E IS DISCLOSED, BUT IN THE OPINION OF THE ASSESSING OFFICER, IT EXCEEDS THE AFORESAID AMOUNT, THE PROVISO FURTHER PROVIDES THAT THE DVO HAVING JURISDICTION IN RESPECT OF ANY AREA MAY FOR THE PURPOSE OF PROPER AND EFFICIENT MANAGEMENT OF THE WORK OF VALUATI ON, MAY, PERFORM SUCH FUNCTIONS AS REFERRED TO IN CLAUSE (2) I.E. IN RESPECT OF VALUATION OFFICER. THE PROVISO FURTHER GIVES SOME JURISDICTION TO THE VALUATION OFFICER TO PERFORM SUCH FUNCTIONS IN RELATION TO AN ASSET REFERRED TO IN CLAUSE (3) I.E. UNDER THE JURISDICTION OF AVO. HOWEVER, IT IS CLEAR THAT ALL THE THREE OFFICERS PERFORM THEIR FUNCTIONS INDEPENDENT OF EACH OTHER AND THE EXERCISE OF POWER BY EACH OF THEM IS LINKED TO THE VALUATION OF ASSET THAT NEEDS TO BE VALUED. THE PROVISO COMES INTO PLAY AT THE JUNCTURE WHEN VALUATION HAS T O BE CARRIED OUT I.E. THE DVO CONSIDERS THE NECESSARY OR EXPEDIENT TO DO SO FOR PROPER AND EFFICIENT MANAGEMENT OF THE WORK OF VALUATION, MAY, PERFORM FUNCTIONS IN RELATION TO AN ASSET, JURISDICTION OF WHICH LIES WITH T HE VALUATION OFFICER. IN OTHER WORDS, IT IS VERY CLEAR THAT THE FUNCTIONS ARE TO BE PERFORMED BY EACH OF THEM INDEPENDENTLY AND ONLY THE REGIONAL VALUATION OFFICER HAS THE POWER OF GENERAL SUPERVISION OVER THE WORK OF DVO, VO AND THE AVO. THE DVO CANNOT SIT IN THE SUPERVISORY POWER OVER THE VALUATION OFFICER. HE HAS THE POWER TO VALUE THE PROPERTY WHICH THE VALUATION OFFICER IS ENTITLED TO VALUE BUT THAT EXERCISE OF POWER CANNOT BE BY WAY OF SUPERVISORY POWER, IT HAS TO BE EXERCISED AT THE TIME WHEN REFE RENCE IS MADE FOR CARRYING OUT THE VALUATION OF AN ASSET BY THE ASSESSING OFFICER. ONCE THE ASSESSING OFFICER HAS REFERRED THE MATTER OF VALUATION TO THE VALUATION OFFICER, WHO IN TURN, HAS FILED HIS REPORT, ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 16 THEN THE DVO IS NOT TO EXERCISE SUPERVISORY POW ERS AND TINKER WITH THE VALUATION REPORT SUBMITTED BY THE VALUATION OFFICER OR FIND FAULT WITH IT. SUCH EXERCISE OF POWER IS BEYOND THE JURISDICTION GIVEN TO THE DVO UNDER RULE 3A OF THE WEALTH TAX RULES IN LINE WITH SECTION 16A OF THE WEALTH TAX ACT. 1 6 . IN THE FACTS OF THE PRESENT CASE, THE ASSESSING OFFICER HAD MADE A REFERENCE FOR VALUATION OF THE PROPERTY IN LINE WITH THE PROVISIONS OF SECTION 50C OF THE ACT TO THE VALUATION OFFICER, WHO IN TURN, GIVEN NOTICE OF HEARING TO THE ASSESSEE AND MADE A PRO POSAL AND ISSUED SHOW CAUSE NOTICE AND THEREAFTER, COMPLETED THE VALUATION AND THE VALUATION ORDER WAS RECEIVED BY THE ASSESSING OFFICER ON 14 .11.2011, UNDER WHICH THE ASSET WAS ESTIMATED AT RS.93,00,096/ - AS AGAINST DECLARED VALUE AT RS.87,21,000/ - . ON 1 5.11.2011, THE DVO, BHOPAL ISSUED A LETTER TO THE ASSESSING OFFICER AND DIRECTS HIM TO COMPLETE THE ASSESSMENT ON THE BASIS OF STAMP VALUATION AUTHORITIES . THE EXERCISE OF POWER BY THE DISTRICT VALUATION OFFICER IN THE ABSENCE OF ANY REFERENCE BEING MADE BY THE ASSESSING OFFICER TO HIM AND SUPERVISING THE ASSESSMENT OF VALUATION OFFICER IS BEYOND POWERS CONFERRED ON HIM. WHERE HE HAS NO POWER TO SUPERVISE THE WORK OF VALUATION OFFICER THEN, SUCH EXERCISE OF POWERS AND DIRECTIONS TO THE ASSESSING OFFICER A RE BEYOND THE SCOPE OF THE ACT. THE DVO AT THE FIRST INSTANCE WHEN REFERENCE WAS MADE BY THE ASSESSING OFFICER COULD HAVE FOR PROPER AND EFFICIENT MANAGEMENT OF THE WORK, COMPLETED THE PROCESS OF VALUATION HIMSELF BY FOLLOWING THE PROCEDURE LAID DOWN IN T HE WEALTH TAX RULES. HOWEVER, IT IS NOT THE CASE HEREIN. THE PROCEDURE HAS BEEN FOLLOWED BY THE VALUATION OFFICER, WHEREIN TO HIM, REFERENCE WAS MADE, WHO IN TURN, GAVE SHOW CAUSE NOTICE TO THE ASSESSEE AND ALSO ACCEPTED THE PLEA OF ASSESSEE IN RESPECT O F COURT CASE PENDING AND REDUCED THE VALUATION FURTHER AND COMPLETED THE VALUATION REPORT. ONCE THE VALUATION REPORT HAS BEEN COMPLETED BY THE ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 17 VALUATION OFFICER, EXERCISE OF POWER BY THE DVO IN SUCH CIRCUMSTANCES IS BEYOND THE POWERS CONFERRED ON HIM UNDE R THE ACT AND THE RULES. SUCH EXERCISE OF POWER IS NOT WARRANTED UNDER THE ACT . THERE IS POWER OF RECTIFICATION OF ANY MISTAKE UNDER SECTION 35(AAA) OF THE WEALTH TAX ACT, WHEREIN THE VALUATION OFFICER CAN AM END ANY ORDER PASSED BY HIM UNDER SECTION 16A OF THAT ACT , BUT SUCH POWER OF RECTIFICATION OF MISTAKE IS TO BE PASSED BY THE OFFICER PASSING THE VALUATION REPORT . IN THE FACTS OF THE PRESENT CASE, IT IS NOT AKIN TO RECTIFICATION OF MISTAKE AND HENCE, NO MERIT IN THE SAID EXERCISE OF POWER. 1 7 . I FIN D SUPPORT FROM THE PROPOSITION LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN RAHUL CONSTRUCTIONS VS. DCIT (2010) 38 DTR 19 IN RESPECT OF EXERCISE OF POWER BY THE SUPERIOR AUTHORITY AND IN THE ABSENCE OF ANY MISTAKE APPARENT ON RECORD, THE SO - CALLED RECTIFICAT ION OF VALUE CARRIED OUT BY THE DVO IS NOT VALID AS WAS HELD BY THE JABALPUR BENCH OF TRIBUNAL IN WTO VS. AJIT SINGH MALHOTRA (SUPRA). 1 8 . BEFORE PARTING, I ALSO REFER TO CIRCULAR NO.96, DATED 25.11.1972 WHICH WAS PASSED BY THE CBDT IN RELATION TO FUNCTIO NS OF VALUATION OFFICER. IT IS VERY CATEGORICALLY LAID DOWN THAT IN CASE THE VALUATION OFFICER IS OF THE OPINION THAT THE VALUE OF AN ASSET HAS BEEN CORRECTLY DECLARED IN THE RETURN OF WEALTH, THEN HE WOULD PASS AN ORDER TO THAT EFFECT UNDER SECTION 16A(3 ) OF THE WEALTH TAX ACT AND SEN D THE COPY OF SAME TO THE WEALTH TAX OFFICER AND ALSO TO THE ASSESSEE. HOWEVER, WHERE THE VALUATION OFFICER IS NOT SO SATISFIED, THEN IT IS INCUMBENT UPON HIM TO ISSUE AND SERVE UPON THE ASSESSEE A NOTICE REQUIRING HIM TO PR ODUCE SUCH ACCOUNTS, RECORDS OR OTHER DOCUMENTS AS HE MAY REQUIRE. WHERE THE VALUATION OFFICER IS OF THE OPINION THAT THE VALUE OF ASSET IS HIGHER ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 18 THAN THE VALUE SO DECLARED, IT WOULD BE INCUMBENT UPON HIM TO SERVE A NOTICE UPON THE ASSESSEE INTIMATING TH E VALUE HE PROPOSE S TO ESTIMATE AND GIVE OPPORTUNITY TO FILE HIS OBJECTIONS EITHER IN PERSON OR IN WRITING. SIMILAR EXERCISE HAD TO BE CARRIED OUT IN RESPECT OF VALUE OF AN ASSET WHICH HAS NOT BEEN DISCLOSED BY THE ASSESSEE IN ITS RETURN OF NET WEALTH OR WHERE NO SUCH RETURN HAS BEEN FILED . T HE VALUATION OFFICER AFTER CONSIDERING THE EVIDENCE PRODUCED, HAS TO ESTIMATE THE VALUE OF ASSET AND PASS AN ORDER UNDER SECTION 16A(5) OF THE WEALTH TAX ACT. THE SAID ORDER IS THEN TO BE SENT BOTH TO THE WEALTH TAX OFFICER AND TO THE ASSESSEE. IT IS ALSO PROVIDED IN THAT CIRCULAR THAT THE VALUATION MADE BY THE VALUATION OFFICER WILL BE BINDING ON THE WEALTH TAX OFFICER AND IT WOULD NOT BE OPEN TO HIM TO DEPART FROM THE ORDER OF VALUATION OFFICER UNDER SECTION 16A(5) OF THE WEALTH TAX ACT. IN THE FACTS OF PRESENT CASE, WHERE THE VALUATION OFFICER HAS FOLLOWED THE PROCEDURE LAID DOWN IN THE ACT AND AS PRESCRIBED IN THE CBDT CIRCULAR, WHEREIN HE HAS SHOW CAUSED HIS PROPOSAL TO ADOPT THE VALUE OF ASSET AT A PARTICULAR V ALUE, THEREAFTER, GIVEN AN OPPORTUNITY OF HEARING TO THE ASSESSEE AND COMPLETED THE VALUATION BY PASSING AN ORDER IN WRITING, WHICH WAS COMMUNICATED BOTH TO THE ASSESSING OFFICER AND THE ASSESSEE THEN, THE EXERCISE OF VALUATION STAND S COMPLETED . AFTER THE SAID VALUATION HAS BEEN COMPLETED BY THE VALUATION OFFICER, THE EXERCISE OF ANY POWER BY THE DVO IS BARRED UNDER LAW AS HE CANNOT SIT IN JUDGMENT OVER THE VALUATION COMPLETED BY THE VALUATION OFFICER AFTER FOLLOWING DUE PROCESS OF LAW. ACCORDINGLY, THERE IS NO MERIT IN THE VALUATION OF SAID ASSET MADE BY THE DVO. THE VALUATION OFFICER HAS ADOPTED THE VALUE OF PROPERTY AT ABOUT RS.93 LAKHS AS AGAINST THE VALUE DECLARED BY ASSESSEE AT RS.87 LAKHS AND THE VALUE SO WORKED OUT BY THE VALUATION OFFICER IS LESS THAN 10% AND HENCE, VALUE SHOWN BY THE ASSESSEE MERITS TO BE APPLIED. THE DIFFERENCE BETWEEN SALE CONSIDERATION SHOWN BY THE ASSESSEE AT RS.87 LAKHS AND THE VALUE DETERMINED ITA NO. 587 /P U N/20 1 4 SMT. RATNAKANTA B. AGRAWAL 19 BY THE VALUATION OFFICER AT RS.93 LAKHS IS LESS THAN 10% AND SINCE THE VALUATION IS MATTER OF ESTIMATION AND SOME DIFFERENCE IS TO OCCUR, THEN THE ASSESSING OFFICER WAS NOT JUSTIFIED IN SUBSTITUTING THE VALUE DETERMINED BY THE DVO FOR THE SALE CONSIDERATION DISCLOSED BY THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO TAKE THE VALUE DECLARED BY THE ASSESSEE AT RS.87 LAKHS IN ORDER TO WORK OUT THE INCOME FROM CAPITAL GAINS. THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED AND CONSEQUENTLY, THE ISSUE RAISED ON MERITS BECOME S ACADEMIC. 1 9 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 24 TH DAY OF JULY , 201 7 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 24 TH JULY , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPON DENT; 3. ( ) / THE CIT(A) - 2 , NASHIK ; 4. / THE CIT - 2 , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE