ITO Ward-23(3), Kolkata v. Sudip Roy
[Citation -2016-LL-1019-19]

Citation 2016-LL-1019-19
Appellant Name ITO Ward-23(3), Kolkata
Respondent Name Sudip Roy
Court ITAT-Kolkata
Relevant Act Income-tax
Date of Order 19/10/2016
Assessment Year 2007-08
Judgment View Judgment
Keyword Tags computation of capital gain • indexed cost of acquisition • long-term capital gain • cost inflation index • cost of improvement • date of acquisition • income from salary • fair market value • registered valuer • valuation officer • value of property • valuation report • purchase price • house property • capital asset • cost of asset • actual cost • sale price
Bot Summary: 21 NIL From the above, it is clear that AO has disregarded the valuation report of the assessee for valuing the property as stood on 01.04.1981 and also disregarded the cost inflation index factor taken by assessee for the year 1981. The AO cannot make the reference to the DVO as the assessee has shown more value of the property as on 1.4.1981 than the value of the DVO. With regard to action of the AO for adopting the index factor for the FY 2002-03, assessee submitted that the ownership of the property was inherited in the year 2002- 03 but as per law the value of the property will be taken as on 01.04.1981 and accordingly cost inflation index for that year i.e. 100 should be adopted. In order to ascertain the cost of acquisition to the assessee reference can also be made to Section 55(2)(b)(ii) which reads as follows:- where the capital asset became the property of the assessee by any of the modes specified in sub-section(1) of section 49, and the capital asset became the property of the previous owner before the 1st day of April, 1981, means the cost of the capital asset to the previous owner or the fair market value of the asset on the 1st day of April, 1981, at the option of the assesse. In section 48 of the Act, the expression asset held by the assessee is not defined and in the absence of any intention to the contrary the expression asset held by the assessee in clause of the Explanation to section 48 of the Act has to be construed in consonance with the meaning given in section 2(42A) of the Act. The words the year in which the assessee first held the capital assets is interpreted by him to be the year in which the assessee succeeded to the assets. Explanation 1 to section 2(42A) provides that in determining the period for which any capital asset is held by the assessee, in the case of a capital asset which become the property of the assessee, in any of the circumstances mentioned in s. 49(1), there shall be included the period for which the asset is held by the previous owner. The father of the assessee acquired the property in 1972 and therefore, the assessee opted for FMV of 1st April, 1981 to be the cost of acquisition.


IN INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA Before Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member ITA No.2864/Kol/2013 Assessment Years:2007-08 ITO Ward-23(3), Sudip Roy 169, A.J.C. Bose Road, 47/1G, Badridas Temple Bamboo Villa, 9 t h Floor, Street, Kolkata-700 004 V/s. Kolkata-70 014 [PAN No.ACWPR 9464 E] Appellant Respondent By Appellant Md. Ghayas Uddin, JCIT-SR-DR By Respondent Shri I. Bnerjee, FCA Date of Hearing 26-09-2016 Date of Pronouncement 19-10-2016 O R D E R PER Waseem Ahmed, Accountant Member:- This appeal by Revenue is against order of Commissioner of Income Tax (Appeals)-XIV, Kolkata dated 10.09.2013. Assessment was framed by ITO Ward-23(3), Kolkata u/s 143(3)/263 of Income Tax Act, 1961 (hereinafter referred to as Act ) vide his order dated 14.12.2012 for assessment year 2007-08. grounds raised by Revenue per its appeal are as under:- Ld. CIT(Appeals) had erred in law as well as in facts by giving relief to assessee on ground of Cos Inflation Index factor, that in event of adoption of Fair Market Value of 1981, Cost Inflation Index factor of 1981 (i.e. 100) could only be taken, ignoring Cost Inflation Index factor of FYr. 2002-03 (447) prevailing on subsequent inheritance of ownership of property. ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 2 Furthermore, Ld. CIT(Appeals) had also erred in law as well as in facts by giving relief to assessee on ground that reference to Department Valuation Officer u/s. 55A had been contrary to law and as such said valuation does not warrant acceptance and effect in assessment, solely relying on assessee s submission without considering facts observation in totality. Md. Ghayas Uddin, Ld. Senior Departmental Representative represented on behalf of Revenue and Shri I Banerjee, Ld. advocate appeared on behalf of assessee. 2. only inter-connected issue raised by Revenue in this appeal is that Ld. CIT(A) erred in deleting addition made by Assessing Officer under head capital gain by taking cost inflation index factor of 1981 i.e. 100 and further erred by disregarding valuation report made by DVO u/s 55A of Act. 3. fact in brief are that assessee in present case is individual and has shown income from salary, capital gains and other sources. Assessee inherited property from his father located at 57, Jyotindra Mohan Avenue, PS. Shyampukur, Kolkata-05 in financial year 2002-03. assessee was having 1/8th share in that property. During year under consideration assessee has sold his share of property and disclosed Long Term Capital Gains (LTCG for short) of 24,91,950/-. assessee made investment for 25 lakh in bonds to claim deduction u/s 54EC of Act from income of LTCG. However, AO disagreed with working of LTCG of assessee as detailed below:- Particulars AO observation Appellant s 1/8th undivided share (Rs) Sale price (gross consideration) 8137500.00 8137500.00 Brokerage and commission 182,671.00 182,671.00 Net sale price (net consideration) 7,954,829.00 7,954,829.00 FMV as on 01/04/1981 486,500.00 1083375.00 (vide DVO s report) (vide valuation report) FMV as on 01/04/1981 indexed * 564,862.42 5622710.000* by following Indexed factor: *486500 x 519 * 1083375 x 519 447 (FY 2002-03) 100 (FY 1981) Resultant LT capital gain 7146655.00 2491952/- ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 3 Section 54EC deduction availed 2491952/- 2491952/- of by appellant-investment in . .. bond for Rs.2500000/- Taxable L.T capital gain 4,646,655.21 NIL From above, it is clear that AO has disregarded valuation report of assessee for valuing property as stood on 01.04.1981 and also disregarded cost inflation index factor taken by assessee for year 1981. AO has taken DVO s Valuation Report as on 1.4.1981 and cost inflation index of year when property was first held by assessee i.e. 447 for financial year 2002-03. In that view of matter, AO worked out LTCG taxable in hands of assessee for 46,46,655/-. 4. Aggrieved, assessee preferred appeal before Ld. CIT(A). assessee before ld. CIT(A) submitted that reference made by AO to DVO u/s 55A of Act for valuation of property as on 1.4.1981 is against provision of law and his action is ultra varies as per Sec. 55A of Act. AO can make reference to DVO if he is of opinion that value so claimed is less than its market value. In instant case, market value as on 01.04.1981 has been shown by assessee greater than value shown by DVO. It was further submitted that there was amendment in Finance Bill, 2012 which came into force with w.e.f. 01.07.2012. As per amended provisions of section 55A of Act, AO is authorized to make reference to DVO if he is of opinion that value so claimed is at variance with its fair market value. However, AO was authorized to make reference to DVO with effect from 1st July 2012 and instant case pertains to AY 2007-08. Therefore, AO cannot make reference to DVO as assessee has shown more value of property as on 1.4.1981 than value of DVO. With regard to action of AO for adopting index factor for FY 2002-03, assessee submitted that ownership of property was inherited in year 2002- 03 but as per law value of property will be taken as on 01.04.1981 and accordingly cost inflation index for that year i.e. 100 should be adopted. Accordingly, ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 4 Ld. CIT(A) deleted addition made by AO after having reliance in case of Umedbhai International Ltd 330 ITR 506 and 134 TTJ 23 by observing as under:- 3.1.1 In above judgment Hon'ble Kolkata Tribunal, has pointed out unintended absurdity and inconsistency in situation of adoption of some remote index factor to some distant and discrete FMV, prevailing in two different years, in light of clarificatory CBDT Circulars and concluded that in event of adoption of FMV of 1981, indexed factor of 1981 only could be taken, ignoring indexed factor prevailing around or on subsequent inheritance of acquisition of ownership vide section 49. This judgment from jurisdictional Tribunal being applicable to facts of present appeal. I feel it incumbent to follow above verdict and principle. This ground is allowed. AO is directed to adopt index factor of 519/100 in place of 519/447 and apply former to FMV of Rs.1083375/- (submitted by Appellant by means of Valuation Report and recomputed Capital Gain accordingly. Being aggrieved by this order of Ld. CIT(A) Revenue is in appeal before us. 5. Before us Ld. DR submitted that property in question was inherited in FY 2002-03 and therefore cost inflation index for that year should be adopted. He further submitted that AO is very much authorized to refer matter to DVO in terms of provision of Sec. 55A of Act. Ld. DR further submitted that assessee intentionally has shown valuation of property as on 01.04.1981 at higher value with motive of avoiding capital gains. Therefore, action of AO for making reference to DVO is within provision of law. In this connection, Ld. DR relied on judgment of Hon'ble jurisdictional High Court in case of Nirmal Kumar Ravindra Kumar-HUF v. CIT (2016) 70 taxmann.com 339 (Cal), where Hon'ble jurisdictional High Court has held:- Section 55A of Income-tax Act, 1961 capital gains reference to Valuation Officer (General) Assessment year 1996-97 whether clause (b)(ii) to section 55A empowers Assessing Officer to make reference to DVO where in his opinion fair market value estimated by assessee is not proper Held, yes assessee had sold it property for Rs.97,50000 which was purchased by assessee on 31-7-1979 at purchase price of Rs.2,80,882 However, while calculating long-term capital gain, assessee adopted market value of property at Rs.34,55,000 as on 1-4-1981 Assessing Officer considered such estimation of fair market value at higher side and referred matter to DVO who computed fair market value of property at Rs.3,77,250 and completed assessment accordingly Whether since assessee inflated market value of property as on 1- 4-1981 with motive of avoiding capital gain, action of Assessing Officer in ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 5 making reference to DVO while not accepting valuation shown by assessee on basis of registered valuer s report was well permissible under law Held, yes [In favour of revenue] Finally, Ld. DR vehemently relied on order of AO. On other hand, Ld. AR submitted that provision of Sec.55A of Act was amended with effect from 01.07.2012 and therefore, amended provision cannot be applied. He further submitted that case law cited by Ld.DR is different from instant case, in that case question before Hon'ble jurisdictional High Court whether there was motive to avoid tax or not but in instant case, assessee has no such ill-motive to avoid his tax liability. He further submitted that on similar facts, Hon'ble High Court of Calcutta has decided issue in favour of assessee in case of CIT Vs. Smt. Mina Deogun in 375 ITR 0586. relevant extract of order is reproduced below: Mr. Agarwal, learned advocate appearing for revenue/appellant has not disputed fact that under Clause (a) of section 55A as it stood at relevant point of time, assessing officer could have made reference provided he was of opinion that valuation made by registered valuer was less than fair market value of property. When valuation made by registered valuer was on higher side, there was no occasion for assessing officer to refer matter to valuation officer under section 55A. therefore, valuation at sum of Rs.18,40,244/- as at 1st April, 1981 was correctly accepted by learned Tribunal. first question is answered in positive and against revenue. Mr. Agarwal, learned advocate appearing for revenue submitted that computation of capital gains has to be made in accordance with section 48 and in particular explanation (iii), which provides as follows:- (iii) indexed cost of acquisition means amount which bears to cost of acquisition same proportion as Cost Inflation Index for year in which asset is transferred bears to Cost Inflation Index for first year in which asset was held by assessee or for year beginning on 1st day of April, 1981, whichever is later Mr. Agarwal is correct when he submitted that benefit of cost inflation index going by clause (iii) of Explanation quoted above should be available to assessee from year 1999 when she inherited property which was in fact first year of her inheritance. That can certainly be one way of looking at it. But if harmonious construction is to be given then reference has to be made to other provisions contained in Act. Section 2(42A) defines short term capital asset. Clause (b) of Explanation (1) to Section 2(42A) provides as follows:- ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 6 (b) in case of capital asset which becomes property of assessee in circumstances mentioned in [sub- section (1)] of section 49, there shall be included period for which asset was held by previous owner referred to in said section. Section 49 referred to in aforesaid clause (b) of Explanation (1) provides for various circumstances including acquisition by succession, inheritance or devolution. Therefore, period for which asset was held by previous owner, namely, mother of assessee can also be included to period of holding of property by assessee. mother held property since 1968 as indicated above. Here is, as such, reason why assessee in case before us can be said to have held property since 1968. In order to ascertain cost of acquisition to assessee reference can also be made to Section 55(2)(b)(ii) which reads as follows:- (ii) where capital asset became property of assessee by any of modes specified in [sub-section(1) of section 49], and capital asset became property of previous owner before [1st day of April, [1981]], means cost of capital asset to previous owner or fair market value of asset on [1st day of April, [1981]], at option of assesse. Based on aforesaid provision cost of acquisition of capital asset at option of assessee is fair market value of asset on 1st April, 1981. When that is permissible in law, indexation on fair market value as on 1st April, 1981 until date of transfer has to be allowed. Any other interpretation will not only lead to absurd result but shall also cause immense prejudice to assessee. If previous owner that is to say mother had not died and if she herself had sold property in year 2003, she would have got benefit of indexation on fair market value as at 1st April, 1981. We are supported in our view by judgment of Gujarat High Court in case of C.I.T- I Vs. Rajesh Vitthalbhai Patel reported in (2013) 37 Taxmann. Com 439 wherein following views were expressed:- 7. Under section 48 of Act, thus capital gain is computed by deducting from full value of consideration received or accruing as result of transfer, amounts of expenditure incurred wholly and exclusively in connection with such transfer, cost of acquisition of asset and cost of any improvement thereto. Term cost of acquisition of asset is explained in Explanation (iii) to section 48. In terms of such explanation, indexed cost of acquisition would be amount which bears to cost of acquisition same proportion as Cost Inflation Index for year in which asset is transferred bears to Cost Inflation Index for first year in which asset was held by assessee or for year beginning on 1st day of April, 1981, whichever is later. In simple words therefore for asset acquired prior to 1.4.1981 indexed cost of acquisition would be cost of acquisition multiplied by ratio of Cost Inflation Index in year in which assessee s asset is transferred to Cost of Inflation Index for year beginning on 1.4.1981. It was therefore, that Tribunal in our opinion correctly held that indexed cost of acquisition shall have to be worked out with reference to 1.4.1981, since in present case ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 7 asset was acquired by previous owner of property. Learned counsel for Revenue however, submitted that such interpretation would fail to take into account expression Cost Inflation Index for first year in which asset was held by assessee . In his opinion assessee referred to under such expression would be present assessee and not previous owner. In our opinion, such interpretation cannot be accepted. We say so for following reasons. Firstly, by virtue of deeming fiction provided in sub- section (1) of section 49, cost of acquisition in hands of assessee would be cost for which previous owner of property acquired it. It is for this purpose that we need to fall back on computation provision of section 48. When we do so, we work out cost of acquisition of asset in hands of previous owner. While doing so, we cannot transpose assessee in Explanation (iii) of section 48. Doing so, would amount to falling short of giving full effect to deeming fiction contained in sub-section (1) of section 49. To our opinion such deeming fiction must be allowed to have its full play. As is often stated, deeming fiction must be allowed its full application and should not be allowed to boggle. 8. Additionally we notice that in Sub-section (1) of section 49, legislature has provided that cost of acquisition of asset shall be deemed to be cost for which previous owner of property acquired it, as increased by any cost of improvement of assets incurred or borne by previous owner or assessee as case may be. If interpretation of counsel for Revenue was correct, this later reference to cost of improvement borne by assessee would not have been necessary since section 48 itself would take care of any improvement on capital asset to be included for cost of acquisition. It is precisely because such improvement referred to in section 48 would have reference only to that made by previous owner that additional provision had to be made in deeming fiction provided in sub-section (1) of section 49. Further interpretation sought to be given by Revenue would be unacceptable because there is no provision under which cost of acquisition in hands of assessee in cases such as gift on date of acquisition of property can be made and found in Act. Serious road-block would be created if such property is acquired through Will and would, therefore, have no reference to its actual cost on date of operation of Will . Mr. Murarka has also relied upon judgment of C.I.T Vs. Manjula J. Shah reported in (2013) 355 ITR 474 (Bom) and referred to paragraphs 21 to 24 of judgement which are as under:- 21) To accept contention of Revenue that words used in clause (iii) of Explanation to section 48 of Act has to be read by ignoring provisions contained in section 2 of Act runs counter to entire scheme of Act. Section 2 of Act expressly provides that unless context otherwise requires, provisions of Act have to be construed as provided under section 2 of Act. In section 48 of Act, expression asset held by assessee is not defined and, therefore, in absence of any intention to contrary expression asset held by assessee in clause (iii) of Explanation to section 48 of Act has to be construed in consonance with meaning given in section 2(42A) of Act. If meaning given in section 2(42A) is not adopted in construing words used in section 48 of Act, then gains arising on transfer of capital asset acquired under gift ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 8 or will be outside purview of capital gains tax which is not intended by Legislature. Therefore, argument of Revenue which runs counter to legislative intent cannot be accepted. ld. AR further submitted that case law cited by Ld DR has not been considered in earlier decision of this jurisdictional High Court. In this regard, Ld. AR cited case law of Hon'ble jurisdictional High Court in case of CIT vs. Smt. Mina Deogun 375 ITR (2015)586 (Cal). In rejoinder, Ld. DR submitted that jurisdictional High Court has decided issue on 09.06.2016 which is latest decision. Therefore this case should have bearing on issue of instant case. 6. We have heard rival contentions and perused materials available on record. From foregoing discussion, we find that AO has disregarded valuation report submitted by assessee as on 01.04.1981 by holding that assessee intentionally has declared value of property at higher amount which is against provision of law. Similarly, assessee became owner of impugned property in FY 2002-03. Therefore cost inflation index of that year should be adopted. However we find that in present case AO has applied cost inflation index applicable for financial year 2002-2003 being year in which assessee inherited property. words "the year in which assessee first held capital assets" is interpreted by him to be year in which assessee succeeded to assets. We find that s. 2(42A) also uses somewhat similar expression. Explanation 1 to section 2(42A) provides that in determining period for which any capital asset is held by assessee, in case of capital asset which become property of assessee, in any of circumstances mentioned in s. 49(1), there shall be included period for which asset is held by previous owner. If for purpose of determining period of holding of capital asset by assessee, period for which previous owner has held capital asset is to be included, then different consideration cannot be applied for purpose of s. 48. If sections 2(42A), 47(iii), 49(1)(ii)(iii) and s. 55(2)(b)(ii) are read co-jointly then it appears that in law no "transfer" of "capital ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 9 asset" is considered to take place on inheritance and succession. liability for capital gain arises only when capital asset is actually transferred by successor. It is only when ultimate successor transfers capital asset for consideration capital gains are assessed to tax. In assessing capital gain in hands of successor, date of acquisition and period of holding, is determined taking into consideration date on which and cost of which first owner acquires capital asset. It is for this reason section 2(42A) uses expression "in determining period for which capital asset is held by assessee". Sec. 48 of IT Act incorporates computation mechanism for qualifying capital gain and therefore expressions used in computation formula should be given schematic interpretation. scheme of taxation of "capital gain" can however, be understood by applying provisions of ss. 2(42A), 2(47), 47(ii), 48, 49(i)(ii) and 55(2)(b)(ii) of Act. As per provisions of these sections, where assessee sells inherited capital asset, capital gain is computed with reference to period of holding and cost of acquisition incurred by previous owner. It is, so because in fact successor assessee does not actually incur any cost. If for applying other provisions relating to computation of capital gains, period of holding and cost incurred by previous owner is considered, then it will be improper to apply only cost inflation index, applicable to year of inheritance. provisions of section 48 prescribing indexed cost of acquisition were enacted by Finance Act, 1992. Memorandum explaining Provisions of Finance Bill, 1992 explained that old provisions relating to taxation of capital gain were unfair because deduction u/s 48 was being allowed in respect of cost of acquisition which did not relate to period of time for which asset was held. old system of computation of capital gain did not take into account inflation which occurred over period of time. new system was therefore, enacted for computing capital gain which allowed cost of asset to be adjusted for general inflation before deducting it from sale proceeds. statutory objective of new system was to favour those assessee s where capital gains accrued over long period. CBDT, in Circular No. 636, dt. 31st Aug., 1992, explained provisions of Finance Act, 1992 relating to amended scheme of capital gains. In this circular Board explained that in scheme prior to 1992 specified percentage was allowed as deduction under s. 48(2) ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 10 which was unrelated to length of period of holding of capital asset. Under new system fair method of allowing relief was enacted to link cost of acquisition to period of holding. For this purpose, cost of acquisition and cost of improvement of asset were to be inflated to arrive at indexed cost of acquisition. circular further clarified that if asset was acquired before 1st April, 1981, market value of capital asset as on 1st April, 1981 would be taken for purpose of indexation. co-joint reading of Memorandum explaining Finance Bill, 1992 and CBDT Circular No. 636 shows that indexation is to be allowed in respect of period of holding of asset and not in relation to individuality of assessee. For purpose of determining period of holding intermediate transfers on account of succession are to be ignored. In present case, AO himself allowed benefit of "FMV" of property as on 1st April, 1981 to be cost under s. 55(2)(b)(ii) of Act. Under s. 2(42A) period of holding of capital asset in hands of assessee was period commencing from 1st April, 1981 till date of transfer. It is, therefore, quite clear that as on 1st April, 1981 asset was statutorily considered to be held, by assessee under s. 55(2)(b)(ii) r/w s. 2(42A) of Act. In our considered opinion therefore, cost inflation index applicable for financial year 1981-82 and not to financial year 2002-03 should have been applied by AO. similar view was taken by Chandigarh Bench of Tribunal in case of Smt. Pushpa Sofat Vs. ITO (2004) 89 TTJ (Chd) 499. In that case house property was inherited by assessee from her father was sold in asst. yr. 1993-94. father of assessee acquired property in 1972 and therefore, assessee opted for FMV of 1st April, 1981 to be cost of acquisition. assessee computed indexed cost of acquisition with reference to cost of inflation index of 1st April, 1981 being 100 per cent. Assessee s father expired on 17th Feb., 1991 and AO allowed indexation of cost with reference to cost inflation index of FY 1990-91 as against inflation index of 100 per cent. Hon ble Tribunal however held that assessee was entitled to compute capital gain by applying cost inflation index of 1st April, 1981. Considering totality of facts and scheme of Act relating to taxation of capital gains, we are of considered opinion that as per schematic interpretation cost of inflation index should be made applied with reference to ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 11 year in which capital asset was first acquired by previous owner. If only for purpose of computing indexed cost of acquisition, date of acquisition by previous owner is excluded then it will lead to absurd result. Such interpretation of section 48 will be against intent and object of enactment and will be against overall scheme of taxation of capital gains in case of inherited assets. cardinal principles of interpretation of statutes is that if literal meaning of statute leads to absurdity then statute should be interpreted in manner which will result in harmonious interpretation which avoids absurdity and promote objective of enactment. We, therefore, direct AO to re-compute capital gains by applying cost inflation index of 100 per cent applicable for financial year 1981-82. Hence, we uphold order of Ld. CIT(A) on this point and this ground of Revenue s appeal is dismissed. 6.1 For other issue of referring matter to DVO for valuation of property as on 1.4.1981, we find that Hon ble Jurisdictional High Court has decided issue in favour of Revenue in case of Nirmal Kumar Ravinder Kumar- HUF Vs. CIT in IT Appeal No. 293 of 2008 vide order dated June 9, 2016. relevant extract of order is reproduced below:- Section 55A of Income-tax Act, 1961 capital gains reference to Valuation Officer (General) Assessment year 1996-97 whether clause (b)(ii) to section 55A empowers Assessing Officer to make reference to DVO where in his opinion fair market value estimated by assessee is not proper Held, yes assessee had sold it property for Rs.97,50000 which was purchased by assessee on 31-7-1979 at purchase price of Rs.2,80,882 However, while calculating long-term capital gain, assessee adopted market value of property at Rs.34,55,000 as on 1-4-1981 Assessing Officer considered such estimation of fair market value at higher side and referred matter to DVO who computed fair market value of property at Rs.3,77,250 and completed assessment accordingly Whether since assessee inflated market value of property as on 1-4-1981 with motive of avoiding capital gain, action of Assessing Officer in making reference to DVO while not accepting valuation shown by assessee on basis of registered valuer s report was well permissible under law Held, yes [In favour of revenue] We find that above said judgment has been passed by Hon ble Calcutta High Court very recently i.e. 9th June 2016. Therefore we are of considered view this will prevail over other decisions of this jurisdictional High Court. This decision is binding on Hon ble Tribunals. facts of instant case are identical to ITA No.2864/Kol/2013 A.Y.2007-08 ITO Ward-23(3), Kol. vs. Sudip Roy Page 12 facts of case which was before Hon ble High Courts. In this view of matter we set aside order of ld. CIT(A) and this point of Revenue s ground is allowed. AO is directed accordingly. 7. In result, Revenue s appeal is allowed partly. Order pronounced in open court on 19/10/2016 Sd/- Sd/- (S.S.Viswanethra Ravi) (Waseem Ahmed) Judicial Member Accountant Member *Dkp Sr.P.S - 19 /10/2016 Kolkata Copy of Order Forwarded to:- 1. Appellant-ITO Ward-23(3), 169, AJC Bose Road, Bamboo Villa 9th Floor, Kolakta-14 2. Respondent-Sudip Roy, 47/1G, Badridas Temple Street, Kolkata-04 3. Concerned CIT 4. - CIT (A) 5. , DR, ITAT, Kolkata 6. Guard file. By order/ /True Copy/ ITO Ward-23(3), Kolkata v. Sudip Roy
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