Chirag Bharatbhai Amin Vs ITO (ITAT Ahmedabad)
The assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT), Ahmedabad, against the order of the Commissioner of Income Tax (Appeals), Gandhinagar, for Assessment Year 2012-13. The dispute primarily concerned the valuation of a property sold during the year, the validity of the reference made to the Departmental Valuation Officer (DVO) under Section 55A of the Income-tax Act, and the consequent computation of capital gains.
The assessee contended that the Assessing Officer’s reference to the DVO for determining the fair market value of the property as on 01.04.1981 was not sustainable under Section 55A. According to the assessee, the amendment to Section 55A(a), introduced with effect from 01.07.2012, allowing a reference where the value claimed by the assessee was “at variance with its fair market value,” was prospective in nature. It was argued that the amendment would apply only from Assessment Year 2013-14 and to transactions undertaken after 01.07.2012. Therefore, the reference made for Assessment Year 2012-13 was invalid.
The assessee relied upon the decision of the ITAT Kolkata Bench in Sonali Roy v. PCIT. In that case, the Tribunal had examined the scope of Section 55A before and after the amendment made by the Finance Act, 2012. The Kolkata Bench noted that prior to the amendment, a reference to the Valuation Officer could be made only when the Assessing Officer was of the opinion that the value claimed by the assessee, based on a registered valuer’s report, was less than its fair market value. It further held that amendments brought into force on a date other than 1 April would apply from the subsequent assessment year. Relying on the Supreme Court’s decision in Karimtharuvi Tea Estate v. State of Kerala, the Kolkata Bench concluded that the amendment effective from 01.07.2012 would apply from Assessment Year 2013-14 and not to Assessment Year 2012-13.
