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Assessee by Shri Surji Chheda – CA Revenue by Shri Sta Ram Meena – Sr.DR 15/02/2022 Date of hearing Date of pronouncement 15/02/2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals), Valsad dated 17.07.2018 for the Assessment Year (A.Y.) 2012-13. The assessee has raised the following grounds of appeal: “1) The Learned CIT (A) has erred in law and facts to held that current appeal on the same issue for the same Assessment Year is pending for the adjudication & hence the appeal is infructuous.
2) The Learned CIT (A) has erred in law and facts to held that valuation report received after the completion of the assessment order becomes part of the record and the same can be considered for rectification u/s 154 of the act.
3) The Learned CIT (A) has erred in law and facts to confirm the rectification made by the learned A.O.O in the assessment order u/s 154 on the basis of (AY 2012-13) Mukesh A.Patel, Vapi Valuation Report of DVO and treating the matter of valuation as mistake apparent from record.
4) The Learned CIT (A) has erred in law and facts to confirm action of the learned A.O. to take the value as per DVO report in spite of the fact that the power of valuation has come back to A.O. if it was not determined by DVO before assessment and report of DVO cannot be utilized for assessment if the valuation was not completed before the assessment and valuation report cannot be considered for rectification u/s 154 of the act.
5) The appellant leaves the right to amend, add or alter the ground at the time of regular hearing.”
Brief facts of the case are that assessment for the A.Y. 2012-13 under section 143(3) r.w.s 147 of the Act was completed on 31.03.2016. During the assessment, the Assessing Officer (AO) noted that assessee sold immovable property and for calculation/ working of Capital Gain, adopted the Fair Market Value (FMV) of property as on 01.04.1981 @ Rs. 80 per square metre. The AO adopted the value of land on the basis of report of registered valuer. The AO was of the view that assessee has considered the higher value to reduce the capital gain, therefore, a reference was made to District Valuation Officer(DVO) for valuation of property. The Report of valuer was not received by the AO till 31.03.2016, the case was getting time barred. The AO passed the assessment order vide order dated 31.03.2016. The AO while passing assessment order adopted average value @Rs.34.58 per sq.mtr on the (AY 2012-13) Mukesh A.Patel, Vapi basis of report called from Sub-Registrar Office, Killa Pardi and computed Long Term Capital Gain of Rs.35,33,01/- and after allowing exemption under section 54B of the Act of Rs.2,45,950/-, brought the remaining capital gain of Rs.32,87,131/- to tax.
The Valuation Report of DVO was received by the AO on 13.12.2016 wherein the DVO suggested rate @10.15 per square metre. The AO on the basis of report of DVO, issued notice under section 154 of the Act revising/rectifying the rate From Rs.34.58 per sq.mtre to Rs.10.15 per square metre. The notice under section 154 of the Act was contested by assessee by filing his reply vide reply dated 31.01.2017. The assessee in his reply contended that rectification under section 154 of the Act can be made only for the mistake which is apparent from the record and any order where two views are possible. The assessee further stated that against the value determined by the AO, the assessee has already filed appeal before the ld.CIT(A). The valuation report received after assessment order has only persuasive value and cannot be applied for rectification. The reply/objection of the assessee was not accepted by the AO. The AO passed the order under section 154 of the Act by adopting the rate suggested by the DVO and recomputed Long Term Capital Gain. Aggrieved by the order of AO passed under section 154 of the Act, the assessee filed appeal before the ld.CIT(A).
(AY 2012-13) Mukesh A.Patel, Vapi 4. Before the ld.CIT(A), the assessee filed almost similar submission as submitted before the AO. In addition to that, the assessee further submitted that the AO failed to appreciate the fact that matter of valuation on 01.04.1981 of Rs.34.58 per square metre is already under appeal before the ld.CIT(A), Valsad. And the same cannot be considered as a mistake apparent from the record. The ld.CIT(A) after considering the submission of the assessee held that valuation report received after completion of the assessment order became part of record and the same can be considered for rectification. The appeal before him in quantum assessment for the A.Y. 2012-13 pertaining to the issue of addition on account of capital gain, thus, the current appeal on the same issue has become infructuous and dismissed the same. Further aggrieved, the assessee has filed the present appeal before this Tribunal.
We have heard the submission of ld. Authorised Represnetaitve (ld.AR) of the assessee and the ld. Senior Departmental Representative (ld.Sr.DR) for the Revenue. The ld.AR of the assessee submits that the order passed under section 154 of the Act is passed without authority of law. The assessment order was passed on 31.0.2016, is not based on the report of the valuer. In other way, the report of valuer was not available before the AO, thus, subsequent receipt of report cannot be said to be a part of assessment record wherein the assessment order already has been passed and communicated to