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ITO-16(2)(1), Matru Mandir, Mumbai-400 007 Vs. Narendra Nath Kumar 171, Kshitij Nepeansea Road, Mumbai-400 036
June, 26th 2014

       ,     . .  . . ,                                            ,                    

                     ./I.T.A. No. 3884/Mum/2012
                    (   / Assessment Year: 2001-02)

ITO-16(2)(1),                                       Narendra Nath Kumar
Matru Mandir,                              /        171, Kshitij Nepeansea Road,
Mumbai-400 007                             Vs.      Mumbai-400 036

     . /  . /PAN/GIR No. AADPK 3579 K
         ( /Appellant)                        :            (     / Respondent)

         / Appellant by                      :     Shri Sambit Mishra

           /Respondent by                    :     Shri Reepal G. Traishawala

                    Date of Hearing          :     19.06.2014
                       Date of Order         :     24.06.2014

                                    / O R D E R
Per Sanjay Arora, A. M.:

      This is an Appeal by the Revenue directed against the Order by the Commissioner
of Income Tax (Appeals)-28, Mumbai (`CIT(A)' for short) dated 30.03.2012, allowing
the assessee's appeal contesting its assessment u/s.143(3) r/w s. 148 of the Income Tax
Act, 1961 (`the Act' hereinafter) for the assessment year (A.Y.) 2001-02 vide order dated

2.    The issue arising in the instant appeal is the validity of the reference by the
Assessing Officer (A.O.) to the Departmental Valuation Officer (DVO) u/s. 55A of the
Act. The subsidiary issue arising is qua the adjustment made by the A.O. to the assessee's
                                                          ITA No. 3884/Mum/2012 (A.Y. 2001-02)
                                                                   ITO vs. Narendra Nath Kumar

returned long term capital gain (LTCG) on a consideration of the DVO's report, i.e., on

3.        At the very outset, it was submitted by the ld. Authorized Representative (AR), the
assessee's counsel, that the issue arising in the instant case stands covered by the decision
by the hon'ble jurisdictional high court in the case of CIT vs. Puja Prints [2014] 360 ITR
697 (Bom). Vide the said decision, the hon'ble court has since clarified that reference to
the DVO, which in the instant case was made by the A.O. for the purpose of determining
the fair market value, as on 01.04.1981, of the capital asset transferred could be, prior to
the amendment to s.55A(2) by Finance Act, 2012 w.e.f. 01.07.2012, only where in his
opinion its fair market value exceeds the value of the asset as claimed by the assessee,
and that the amendment to the said Act, substituting the words `is less than its fair market
value' by the words `is at variance with its fair market value' in the said provision, would
only be prospective, i.e., w.e.f. 01.07.2012. In the present case, it is the admitted,
undisputed position between the parties that the A.O. considered the fair market value (as
on 01.04.1981) of the capital asset transferred as claimed by the assessee on the basis of
the valuation report by an approved valuer to be on the higher side, so that the same was,
in his view, at a lower sum. The said reference is thus not legally valid.

3.2       The ld. Departmental Representative (DR), on being confronted with the said
decision, conceded to the legal issue arising in the instant case as being squarely covered
by the said decision by the hon'ble jurisdictional high court.

4.        We have heard the parties, and perused the material on record. Under the
circumstances afore-noted, we have no hesitation in holding, following the said decision
by the hon'ble jurisdictional high court supra, that the reference by the A.O. in the instant
case was legally not permissible. The subsidiary question afore-referred, which concerns
the valuation on merits, would therefore not arise for our consideration.
                                                   ITA No. 3884/Mum/2012 (A.Y. 2001-02)
                                                            ITO vs. Narendra Nath Kumar

5.    In the result, the Revenue's appeal is dismissed.

    Order pronounced in the open court on June 19, 2014 at the conclusion of the
hearing itself.

              Sd/-                                  Sd/-
      (Dr. S. T. M. Pavalan)                   (Sanjay Arora)
         / Judicial Member                       / Accountant Member
 Mumbai;  Dated : 24.06.2014

. ../Roshani, Sr. PS

         /Copy of the Order forwarded to :
1.  / The Appellant
2.  / The Respondent
3.     () / The CIT(A)
4.      / CIT ­ concerned
5.               ,     ,  / DR, ITAT, Mumbai
6.     / Guard File
                                                / BY ORDER,

                                          /  (Dy./Asstt. Registrar)
                                      ,  / ITAT, Mumbai
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