INCOME TAX ACT, 1961

Section 50C

Capital gains - Computation - Addition without waiting for DVO's report -

Assessee long term capital gain arising from transfer of land along with certain other family members and co-owners and computed capital gain by taking sale price as full value of consideration and the fair market value of the property as on 1-4-1981 as the indexed cost of acquisition. AO observed that stamp value of land in question was more than the amount of actual sale consideration and also the fair market value as on 1-4-1981 was less. AO made a reference to the DVO for determining the fair market value of the property as on 01-04-1981. Since assessment was getting time barred and report of DVO was not received, AO finalised the assessment by espousing cost of acquisition as on 01-04-1981 and full value of consideration as per the stamp value. Held: Amendment to section 55A was carried out and made effective from 1-7-2012. The assessment year under consideration is 2004-05 and AO made reference to the DVO for determining the fair market value on 20-10-2011. Going by the interpretation of pre-amended provision, it was vivid that no reference could have been made to the DVO when value adopted by assessee was more than the fair market value of the land in the opinion of AO. Assessee did file a Registered valuer's report along with computation of income, relevant part of which has also been placed in the paper book. Since valid reference could not have been made to DVO, the value so determined by him as on 01-04-1981 becomes meaningless. Therefore, matter was remanded back to AO for determining the amount of capital gain afresh

REFERRED :

FAVOUR : In assessee's favour by way of remand

A.Y. : 2004-05

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