Kirankumar Ramanlal Naik Vs ITO (ITAT Surat)
The assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT), Surat, against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for Assessment Year 2012-13. The dispute primarily related to the addition of ₹87,41,778 as Long-Term Capital Gain (LTCG) based on the valuation adopted by the Departmental Valuation Officer (DVO) instead of the valuation furnished by the assessee through a registered valuer.
The assessee contended that the Assessing Officer (AO) was not justified in reopening the assessment and in referring the matter to the DVO for determining the fair market value as on 01.04.1981. It was argued that for Assessment Year 2012-13, Section 55A did not permit such a reference where the assessee had relied upon a registered valuer’s report and the value adopted by the assessee was higher than the value determined by the DVO. The assessee relied on various judicial precedents, including decisions of the Gujarat High Court, Bombay High Court, and the Tribunal.
Before the Tribunal, the assessee relied heavily on the earlier decision of the Tribunal in Virendra Natwarlal Jariwala v. DCIT, where the issue concerning the applicability of the amended Section 55A(a) had been decided in favour of the assessee. The amendment made by the Finance Act, 2012 substituted the expression “is less than its fair market value” with “is at variance with its fair market value” and came into effect from 01.07.2012. The assessee argued that this amendment was prospective and applicable only from Assessment Year 2013-14 onwards.
