Jagrutiben V. Patel Vs ITO (ITAT Surat)
Regarding the validity of reference to the DVO u/s.55A of the Act, first of all, it is to be noted that amendment in section 55A of the Act is effective from 01.07.2012, that is, applicable for assessment year 2013-14 and assessee`s case under consideration is for assessment year 2012-13, therefore, the amended provisions are not applicable to the assessee under consideration. We note that at the relevant time, i.e. A.Y. 2012-13, the Assessing Officer can make a reference to the DVO u/s.55A of the Act only if the value so adopted by the assessee u/s.48 is not supported by the Valuation Report of Govt. approved valuer or if the AO is of the opinion that the value of capital asset claimed by the assessee is “less than its fair market value” and not when “it is more than its fair market value”. We note that none of the condition got fulfilled, hence Ld. AO is not legally competent to make reference to the DVO. As explained above the amended provision of Sec. 55A is not applicable to all those documents which got registered before 01.07.2012, therefore, we note that the AO has (with its fair market value) misinterpreted the provision and erroneously applied it retrospectively. We note that with effect from July 1, 2012, the expression now used in clause (a) of Section 55A is ‘at variance’ the situation may, therefore, be different after July 1, 2012 which is applicable for assessment year 2013-14 whereas the assessee`s case under consideration relates to assessment year 2012-13 hence amended provisions are not applicable to the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
These captioned two appeals filed by the different assessees, pertaining to Assessment Year 2012-13, are directed against the common order passed by the ld.. Commissioner of Income Tax (Appeals)-1, Surat [in short the “CIT(A)”] in Appeal No.CAS-1/147/2015-16 and CAS-1/146/2015-16 dated 26.12.2016, which in turn arise out of separate assessment orders passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as the “Act”].
Since, the issues involved in these two appeals are common and identical, therefore these appeals have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. The facts as well as grounds narrated in ITA No.650/AHD/2017 for the AY.2012-13 is taken as the lead case.
3. The grounds of appeal raised by the assessee in its lead case read as follows:-
“(1) That on facts and in law, the learned CIT (A) has grievously erred in holding that the reference made to DVO u/s.55A of the Act to determine the fair market value of land as on 01/04/1981 is valid.
(2) That on facts, and in law the learned CIT (A) has grievously erred in confirming the addition of Rs.49,07,585/- made towards long term capital gains by rejecting the fair market value as on 01/04/1981 adopted by assessee.
(3) The assessee craves leave to add, alter, amend any ground of appeal.”
4. Facts of the case which can be stated quite shortly are as follows: The assessee is small agriculturist and has filed return of income on 04-12-2013 declaring total income of Rs 1,51,800/-. She has also income from long term capital gain and shown in computation of income filed by her. The assessees with other four co-owners have sold. one agriculture land situated at Block No 31, R S No 22+23, Village Karadva Tal Choryasi, Dist. Surat. Total area of agriculture land was 38579 square meters. The land was sold for total sales consideration value of Rs.3,46,76,100/-. The assessee’s share is 1/5th being 20% of total land. The valuation report of Registered Valuer was obtained and submitted to Assessing Officer who has given the fair market value of the agriculture land as on 01-04-1981 at Rs 100/- per Square Meter totaling to Rs.38,52,900/-. The index cost of agriculture land was worked out and capital gain had been shown in return of income accordingly. The capital gain shown in return of income by assessee is as follows:
