PCIT Vs Shantaben P. Patel (Gujarat High Court)
The Gujarat High Court considered a tax appeal filed by the Revenue against the order of the Income Tax Appellate Tribunal dated 02.04.2018. The issue arose in relation to Assessment Year 2011-12 and concerned the deletion of an addition of ₹13,97,290 made on account of Long-Term Capital Gains.
The question before the Court was whether the Tribunal had erred in deleting the addition and whether the Assessing Officer was justified in making a reference to the District Valuation Officer (DVO) for determining the fair market value of an asset as on 01.04.1981.
The Tribunal had relied on the Gujarat High Court’s earlier decision in Commissioner of Income-Tax v. Gauranginiben S. Shodhan [2014] 367 ITR 238. In that judgment, the Court had examined Section 55A as it stood prior to its amendment with effect from 01.07.2012.
The Court had observed that where an assessee had relied upon the valuation report of a registered valuer, the Assessing Officer could invoke Section 55A(a) only if he formed an opinion that the value claimed by the assessee was less than the fair market value. In such circumstances, the provision as it then existed would not apply where the Assessing Officer considered the value claimed by the assessee to be higher than the fair market value.
