CIT Vs Daulal Mohta HUF (Bombay High Court)
Revenue Appeal Fails Because Property Valuation Dispute Was Purely a Question of Fact; Section 55A Reference Cannot Be Made When Assessee’s Declared Value Is Higher Than FMV; DVO Valuation Rejected Because Reference Under Section 55A Was Found Bad in Law.
The Bombay High Court dismissed the Revenue’s appeal and held that no question of law arose from the issues raised before it. The appeal concerned the valuation of the “Laxmi Niwas” property and the validity of a reference made by the Assessing Officer (AO) to the Departmental Valuation Officer (DVO) under Section 55A of the Income Tax Act.
The Revenue sought to challenge the Income Tax Appellate Tribunal’s (ITAT) decision on two grounds. First, it questioned whether the Tribunal was justified in reversing the Commissioner of Income Tax (Appeals)’ decision that had accepted the DVO’s valuation of the property at ₹1,35,40,000 as against the valuation of ₹2,13,31,000 determined by a Government-approved valuer. Second, it challenged the Tribunal’s finding that the AO was not justified in making a reference to the DVO under Section 55A for determining the fair market value (FMV) of the property.
The High Court examined the Tribunal’s order and observed that the issues raised by the Revenue related only to the quantum of valuation, which constituted findings of fact. The Court held that no question of law was involved in the appeal.
