SHRI AMITABHA CHAUDHURI, KOLKATA v. DY. COMMISSIONER OF INCOME TAX, CIRCLE-1, DURGAPUR (WEST BENTAL), DURGAPUR

ITA 2041/KOL/2019 | 2001-2002
Pronouncement Date: 28-02-2020 | Result: Allowed

Appeal Details

RSA Number 204123514 RSA 2019
Assessee PAN ACDPC1857E
Bench Kolkata
Appeal Number ITA 2041/KOL/2019
Duration Of Justice 5 month(s) 26 day(s)
Appellant SHRI AMITABHA CHAUDHURI, KOLKATA
Respondent DY. COMMISSIONER OF INCOME TAX, CIRCLE-1, DURGAPUR (WEST BENTAL), DURGAPUR
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2020
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-02-2020
Last Hearing Date 01-01-2020
First Hearing Date 01-01-2020
Assessment Year 2001-2002
Appeal Filed On 02-09-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH KOLKATA BEFORE SHRI J. SUDHAKAR REDDY AM & SHRI S. S. GODARA JM ./I.T.A NO.2041/KOL/2019 ( [ [ / ASSESSMENT YEARS: 2001-02) SHRI AMITABHA CHAUDHURI 2D-401 AVISHIKTA 1 369/1 PURBACHAL KALITALA ROAD KOLKATA 700078. VS. DCIT CIRCLE-1 DURGAPUR ./ ./PAN/GIR NO.: ACDPC1857E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S.M. SURANA ADVOCATE RESPONDENT BY : SMT. RANU BISWAS ADDL. CIT / DATE OF HEARING : 01/01/2020 /DATE OF PRONOUNCEMENT : 28/02/2020 / O R D E R PER SHRI S. S. GODARA: THIS ASSESSEES APPEAL FOR ASSESSMENT YEARS 2001-02 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (A) DURGAPURS ORDER DATED 29.07.2019 PASSED IN CASE NO.15/CIT(A)/DGP/2016-17 INVOLVING PROCEEDINGS U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE CANVASSED IN THE INSTANT APPEAL CHALLENGES BOTH THE LOWER AUTHORITIES ACTION REJECTING VALUATION OF HIS SHARE(S) HELD IN M/S EASTERN TEA ESTATE PVT. LTD. @ RS.90284/ - PER UNIT AS THE COST OF ACQUISITION AS ON 01.04.1981 BASED ON THE REGISTERED VALUER/CHARTERED ENGINEERS REPORT THEREBY RESTRICTING THE SAME TO THAT @RS.1000/- EACH IN THE COURSE OF ASSESSMENT AND RS.39 256/- EACH IN THE CIT(A)S DETAILED DISCUSSION READING AS UNDER: I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 2 GROUND NOS.1 2 3 4 6 7AND 8: THE FACTS RELATED TO THE ISSUE UNDER ADJUDICATION HAVE ALREADY BEEN STATED ABOVE. THEREFORE IT IS NOT NECESSARY TO REITERATE THE SAME HERE. THE MOOT QUESTION THAT HAS TO BE DECIDED IS WHAT WAS THE COST OF ACQUISITION OF THE SHARES OF EASTERN TEA ESTATE (P) LTD. AS ON 01.04.1981. THERE ARE THREE DIFFERENT VALUATIONS FOR COST OF ACQUISITION OF THE SAME SHARES AS ON 01.04.1981 IN THIS CASE: (I) AT RS.55 350 AS ON 01.04.1982 WHICH IF ADOPTED ON 01.04.1981 WOULD YIELD THE COST OF ACQUISITION AT RS.49 932. THIS VALUATION IS STATED TO BE HAVE BEEN MADE BY THE APPELLANT WITH DUE DILIGENCE. THIS VALUATION WAS ADOPTED IN THE ORIGINAL RETURN OF INCOME FILED BY THE APPELLANT. (II) VALUATION REPORT DATED 19.04.2007 PREPARED BY SHRI JAYANT SARKAR REGISTERED VALUER AND CHARTERED ENGINEER WHO ESTIMATED THE VALUE OF FIXED ASSETS OF EASTERN TEA ESTATES PVT. LTD. AS ON 01.04.1981 AT RS. 1 36 97 000. THIS VALUE WAS LATER ADOPTED BY ROY SUBODH & ASSOCIATES IN THEIR VALUATION OF THE FMV AS ON 01.04.1981 OF THE SHARES OF EASTERN TEA ESTATES PVT. LTD. WHO VALUED IT AT RS. 90 284 PER SHARE. (III) THE VALUE DETERMINED BY THE ID. AO DURING THE ASSESSMENT PROCEEDINGS AT RS.1 000 WHICH HAPPENED TO BE THE FACE VALUE OF THE SHARES. THE VALUE OF COST OF ACQUISITION OF THE SHARES DETERMINED BY THE LD. AO AT RS. 1 000 PER SHARE WAS REJECTED BY THE PREDECESSOR CIT(A) DURGAPUR. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND EVEN I FEEL THE AO'S VIEW WAS NOT JUSTIFIED. IN THE SET-ASIDE PROCEEDINGS TOO THE AO HAS ONCE AGAIN HELD THE COST OF ACQUISITION OF THE SHARES IN QUESTION TO RS. 1000 PER SHARE. I FIND THAT THE ID. AO HAS CONFUSED HIMSELF WITH THE BOOK VALUE AND THE FAIR MARKET VALUE. THE VALUE AT RS. 1 000 PER SHARE AS RECORDED IN THE BOOKS OF THE APPELLANT IS THE FACE VALUE OF THOSE SHARES. IT CERTAINLY IS NOT THE FMV. FOR THE PURPOSE OF COMPUTING CAPITAL GAINS TAX THE FMV SHOULD BE TAKEN INTO CONSIDERATION. THEREFORE IN MY VIEW THE ID. AO'S CALCULATION OF LONG TERM CAPITAL GAINS IN THE HANDS OF THE APPELLANT IN UNJUSTIFIED AND IS REJECTED. ALL THE ABOVE REFERRED VALUATIONS INCLUDING THAT MADE BY THE ID. AO OF THE FMV FOR ASCERTAINING THE COST OF ACQUISITION OF SHARES OF EASTERN TEA ESTATES PVT. LTD. AS ON 01.04.1981 WERE THERE BEFORE THE PREDECESSOR ID. CIT (A) DURGAPUR. IN HIS APPELLATE ORDER HE CONSIDERED ALL THE THREE VALUATIONS AND FOUND THEM TO BE UNCONVINCING. THEREFORE HE ANALYSED THE FACTS AT LENGTH AND ARRIVED AT HIS CONCLUSIONS IN THE FOLLOWING MANNER: WE HAVE TO FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAINS IN THIS CASE FIND OUT A RATIONAL AND REASONABLE WAY TO DETERMINE THE FAIR MARKET VALUE AS ON 1.4.1981. IT IS BORNE OUT FROM THE RECORD THAT THE BOARD OF DIRECTOR HAD PASSED A RESOLUTION ON 25.03.1996 WHEREBY THE FIXED ASSETS OF THE COMPANY WERE RE-VALUED. THE FINAL ACCOUNTS FOR THE F.Y. 1998-99 ARE ALSO ON THE RECORD WHICH GIVES THE FIGURES AS AT 31.3.1997 AS WELL. THE SUM OF FIXED ASSETS (RS.2 30 03 913/-) INVESTMENT (RS.716/-) AND CURRENT ASSETS LOANS AND ADVANCES (RS. 28 42 834/-) AS ON 31.3.1997/1.4.1997 COMES TO RS. 2 58 47 463. THE SECURED LOANS (RS. 36 24 648/-) UNSECURED LOANS (RS. 31 432/-) CURRENT LIABILITIES (RS.15 63 182/-) AND PROVISIONS (RS. 12 39 000/-) AMOUNT TO RS. 64 58 262/-. SO THE NET ASSETS VALUE WORKS OUT TO RS. 1 93 89 201 (2 58 47 463/- MINUS RS. 64 58 262/-). THIS DIVIDED BY THE NUMBER (128) OF SHARES GIVES THE F.M.V PER SHARE AS ON 31.3.1997/1.4.1997 OF RS. 1 51 478. TAKING INTO ACCOUNT THE COST OF INFLATION INDEX OF THE F.YEAR 1997-98 AND 1981-82 (331 AND 100 RESPECTIVELY THE COST PER SHARE AS ON 1.4.1981 COMES TO RS. 45 763/- (RS. 1 51 478/- MULTIPLIED BY 100 AND DIVIDED BY 331). SO THE COST OF ACQUISITION OF 24.25 SHARES WORKS OUT TO RS. 45 05 596/- (45 763/-X 24.25 X4.06) AND THAT OF THE SHARES COMES TO RS.6 53 560/- (RS.45 763/-X7X406 DIVIDED BY 199 (THE COST OF INFLATION INDEX OF F.YR 1991-92 DURING WHICH ON 24.08.1991 THE 7 SHARES WERE ACQUIRED. I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 3 THE TOTAL COST OF ACQUISITION COMES TO RS.51 59 156/- (RS.45 05 596/- PLUS RS.6 53 560/-). CONSEQUENTLY THE LONG TERM CAPITAL GAINS WORKS OUT TO RS.1 16 47 300/- [RS.1 70 62 500/- (RS.5 46 000/- X 31.25 MINUS RS.51 59 156/- (RS.45 05 596/- PLUS RS.6 53 560/-) MINUS RS.2 56 044/- (BROKERAGE AND OTHER EXPENDITURE)]. TO SUM UP IT STANDS ENHANCED FROM THE RECTIFIED LONG TERM. DURING THE INSTANT APPELLATE PROCEEDINGS THE APPELLANT AND HIS ID. AR ARGUED DERIDING THE ACTION TAKEN BY THE ID. AO AND WHILE ASSAILING THE ASSESSMENT ORDER ON DIFFERENT COUNTS THEY HAVE ALSO PUT FORTH THE FOLLOWING ARGUMENTS IN SUPPORT OF THE VALUATION MADE BY ROY SUBODH & ASSOCIATES: ANY VALUATION IS A MATTER OF OPINION WHEREAS A SALE PRICE IS A SETTLED FACT; HENCE CREDIBILITY OF DIVERSE VALUATIONS FOR THE SAME FIXED ASSET(S) HAS TO BE TESTED. THERE IS A MISMATCH BETWEEN THE FMV/SHARE AS ON 01/04/1981 COMPUTED BY LD. CIT(A) ON THE BASIS OF 'BOOK VALUE' OF ASSETS IN B/S OF FY 97-98 ON ONE HAND AND THE FMV/ SHARE AS ON 01/04/1981 COMPUTED BY THE ASSESSEE'S CA ON THE BASIS OF THE VALUATION OF FIXED ASSETS DATED 19/04/2007 FROM THE REGISTERED VALUER ON THE OTHER HAND; THIS MISMATCH MUST BE RESOLVED. HERE THE ASSESSEE BEGS TO CITE THE ORDER OF HON. ITAT MUMBAI DATED 19/04/2012 IN SMT. RITA B. SHAH V ITO IN ITA NO.5363/MUM/2010. HERE HON. ITAT MUMBAI SPECIFICALLY CONSIDERED THE DECLARED SALE PRICE AND DECIDED THE QUESTION OF CREDIBILITY OF DIFFERENT VALUATIONS FOR IDENTICAL FIXED ASSETS ACCORDINGLY. OUT OF THE 2 VALUATIONS BY LD. DVO FOR IDENTICAL FIXED ASSETS HERE ONE WAS 162.45% AND THE OTHER WAS 90.2% OF DECLARED SALE PRICE; HON. ITAT MUMBAI HELD THE VALUATION THAT WAS CLOSER TO THE SALE PRICE AS CREDIBLE FOR COMPUTATION OF THE ASSESSEE'S LTCG DISCARDING THE ESTIMATE AT 162.45% OF SALE PRICE AS OVERVALUED. HENCE BY APPLICATION OF THE SAME YARDSTICK ADOPTED BY HON. ITAT MUMBAI THE ASSESSEE SUBMITS THAT THE COMPANY'S FIXED ASSETS ARE UNDERVALUED IN THE ESTIMATE OF FMV BY LD. CIT(A) AS ON 01/04/1981. THE COMPANY OWNED THE SAME FIXED ASSETS FROM FY'80-'81 TILL SALE OF ITS 128 SHARES ON 25/04/2000 AND IN TERMS OF THE SALE PRICE THE REGISTERED VALUER'S VALUATION OF THE FIXED ASSETS AS ON 01/04/1981 IS CREDIBLE. HERE THE ASSESSEE ALSO BEGS TO CITE PARA 7 & 8 OF THE ORDER IN SMT. MINA DEOGUN V ITO [2008] 117 TTJ (KOL) 121 WHICH DECIDED VALUATION OF A FIXED ASSET REJECTING THE LOWER VALUATION AS ON 01/04/1981 ON THE BASIS OF THE SALE PRICE; THIS ORDER WAS UPHELD IN CIT V SMT. MINA DEOGUN [2015] 375 ITR 586 (CAL.). THE ASSESSEE FURTHER BEGS TO CITE PARA 4.3 4.6 4.8 & 4.9 OF THE ORDER IN ACIT V MARIWALA FAMILY (NO.2) TRUST [2006] 8 SOT 38 (MUM.). THE APPELLANT ALSO PREPARED A CHART IN PURSUANCE WITH THE ABOVE ARGUMENTS SHOWING DIFFERENT VALUATIONS IN DIFFERENT CASES BY THE HON'BLE ITATS AT MUMBAI AND KOLKATA AND THOUGH THE SAME ARGUED JUSTIFYING THE VALUATION OF FMV OF THE SHARES IN HIS CASE AT RS.90 284 AS ON 01.04.1981. THE CHART/ TABLE IS AS UNDER: TABLE = 1 COMPUTATION OF FMV OF ALL 128 UNLISTED EQUITY SHARES OF EASTERN TEA ESTATES (P) LTD. BY THE METHOD ADOPTED BY LD. CIT(A) FINANCIAL YEAR (1) BOOK VALUE OF ASSETS + INVESTMENTS + CURRENT ASSETS LOANS & ADVANCES AS IN AUDITED B/S (2) SECURED LOANS + UNSECURED LOANS +CURRENT LIABILITIES + PROVISIONS AS IN AUDITED B/S RS. (3) NET ASSET VALUE ON 31 ST MARCH OF EACH FY COL.(2) COL.(3) RS. (4) FY'96 - 97 23003913 +716 + 2842834 = 25847463 3624648+ 31432 + 1563182 + 1239000 = 6458262 25847463- 6458262 = 19389201 I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 4 FY'97- '98 5482498 +31653+ 23247820 +716 + 8714170= 31962706 3999691+ 31653+ 635440 + 3761117 = 8427901 31962706- 8427901 = 23534805 FY'98 - '99 24045989+716+14409546= 38456251 5482498+31653+1095755+ YEAR5998608 = 12608514 38456251 - 12608514 = 25847737 TABLE # 2 COMPARATIVE STATEMENT OF DIFFERENT ESTIMATES OF FMV FOR IDENTICAL FIXED ASSETS AND ACTUAL TRANSACTION AMOUNT AS STATED IN THE ORDER OF HON. ITAT MUMBAI DATED 19/04/2012 IN SMT. RITA BHUPEN SHAH V ITO ITA NO. 5363/MUM/2010 FMV ESTIMATED BY STAMP VALUATION AUTHORITY FOR A FLAT SOLD BY ASSESSEE IN MARCH 2006 RS.8229144 FMV OF THE SAME FLAT ESTIMATED BY LD. DVO U/S 50C(2) ON 28/11/2008 FOR ABOVE SALE IN MARCH 2006 - HELD TO BE NOT CREDIBLE AND REJECTED AS OVERVALUED BY HON. ITAT MUMBAI. RS.6368000 FMV ESTIMATED BY LD. DVO U/S 50C(2) ON O7/12/2009 FOR ANOTHER IDENTICAL FLAT IN THE SAME BUILDING SOLD IN MAY 2005 FOUND CREDIBLE BY HON. ITAT MUMBAI. RS.3535896 DECLARED SALE PRICE OF THE FLAT SOLD BY ASSESSEE IN MARCH 2006.- HELD BY HON. ITAT MUMBAI AS ACCEPTABLE FOR COMPUTATION OF ASSESSEE'S LTCG. RS.3920000 TABLE #1 COMPARATIVE STATEMENT OF THE ASSESSEE'S SHARE IN DIFFERENT ESTIMATES OF FMV FOR FIXED ASSET AND ACTUAL SALE PRICE AS STATED IN THE ORDER OF HON. ITAT KOLKATA DATED 03/08/2007 IN SMT. MINA DEOGUN V ITO [2008] 117 TTJ (KOL) 121 THE ASSESSEE'S SHARE OF DECLARED SALE PRICE OF FIXED ASSET SOLD IN FY 2003-'04 RS.30000000 THE ASSESSEE'S SHARE OF FMV OF ABOVE FIXED ASSET AS ON 01/04/1981 ESTIMATED BY LD. DVO U/S 55A(B)(I) - HELD AS RS. 1165570 UNDERVALUED AND REJECTED BY HON. ITAT KOLKATA. THE ASSESSEE'S SHARE OF FMV OF ABOVE FIXED ASSET AS ON01/04/1981 AS PER ESTIMATE BY REGISTERED VALUER U/S 55A(A) & 55(2)(B)(II) HELD AS ACCEPTABLE BY HON. ITAT KOLKATA. RS.1840244 TABLE # 2 COMPARISON OF COMMERCIAL PARAMETERS OF EASTERN TEA ESTATES (P) LTD. ON THE BASIS OF AUDITED B/S OF THE COMPANY FOR FY'81- '82 FY'97 -98 AND FY'98 -'99 ON RECORD INCLUDING FIGURES STATED FOR 'PREVIOUS YEARS' FINANCIAL YEAR SALEABLE PRODUCTION KGS. SALE PROCEEDS RS. SECURED LOAN FROM UNITED BANK OF INDIA SECURED LOAN AS % OF SALE PROCEEDS REMARKS I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 5 RS. FY'80 -'81 1 93 895 19 81 630 34 68 120 175% B/S NOT AVAILABLE WITH ASSESSEE FY'81 -'82 1 75 323 20 53 759 47 33 776 230% APART FROM HYPOTHECATION OF PRODUCT TITLE DEED OF MAJOR FIXED ASSET WAS HELD BY UBI AS SECURITY AGAINST LOAN. FY'96-97 3 99 840 1 68 46 536 32 05 347 19% B/S NOT AVAILABLE WITH ASSESSEE FY'97-'98 3 82 257 2 56 38 687 36 58 330 14.2% TITLE DEED OF MAJOR FIXED ASSET NO LONGER RECORDED TO BE HELD BY UBI AS SECURITY AGAINST LOANS/ADVANCES. FY'98-99 4 23 571 2 64 769 42 44 80 623 16.9% - DO - THE APPELLANT HAS ARGUED THAT THE FMV/COST OF ACQUISITION OF THE SHARES AS ON 01.04.1981 WAS BASED ON VALUATION REPORTS PREPARED BY PROFESSIONAL VALUERS WHO HAD TECHNICAL EXPERTISE IN THIS FIELD. HE HAS FURTHER STATED RELYING ON THE DECISIONS IN THE CASE OF MINA DEOGUN AND RITA BHUPEN SHAH RENDERED BY THE HONBLE ITAT KOLKATA AND THE HONBLE ITAT MUMBAI RESPECTIVELY THAT THE VALUATION WHICH IS CLOSE TO THE SALE PRICE MUST BE ACCEPTED AND ADOPTED. THE CASES RELIED UPON BY THE APPELLANT ARE THOSE IN WHICH THERE WERE VALUATIONS MADE BY THE DVO VIS--VIS THE VALUATIONS RELIED UPON BY THE ASSESSEE IN THOSE CASES. FURTHER THE HON'BLE TRIBUNALS IN BOTH THE CASES HAVE FOUND THE VALUATIONS MADE BY THE RESPECTIVE DVOS TO BE INCORRECT AND THEREFORE THEY HAVE ACCEPTED THE ASSESSEE'S PLEA IN EACH OF THE TWO CASES. THE FACTS ARE DIFFERENT HERE. IN THIS CASE THERE ARE TWO VALUATIONS BOTH OF WHICH WERE MADE BY PERSONS HIRED BY THE APPELLANT OR BY THE COMPANY (EASTERN TEA ESTATES PVT. LTD.) WHOSE MANAGEMENT WAS CONTROLLED BY HIS FAMILY EACH OF WHICH VALUATION WAS ACCEPTED AND ADOPTED AS CORRECT BY THE APPELLANT AT DIFFERENT POINTS OF TIMES. THERE IS NO VALUATION MADE BY ANY PERSON CHOSEN BY THE REVENUE THERE IS NO REPORT FROM THE DVO AS WELL. THUS THERE IS A CONFLICT BETWEEN THE APPELLANT'S OWN POSITIONS AT DIFFERENT TIMES. THE QUESTION HERE THUS LOSES THE QUEST FOR TRUTH AND VEERS INTO THE REALM OF A QUEST FOR SELF-INTEREST; OF WHAT SUITS THE APPELLANT THE MOST. INITIALLY WHEN THE APPELLANT FILED HIS ORIGINAL RETURN OF INCOME HE ADOPTED A VALUATION FOR COST OF ACQUISITION OF SHARES AT RS. 55 350. HE ARGUED THAT THE VALUATION AT RS. 55 350 WAS CORRECT. LATER WHEN HE FOUND A VALUATION MORE SUITED TO HIM HE ADOPTED IT AND REJECTED HIS OWN CLAIMS MADE IN THE ORIGINAL RETURN OF INCOME. THUS IN HIS RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 HE ADOPTED HIS COST OF ACQUISITION AT RS. 90 284 PER SHARE AND HAS SINCE BEEN ARGUING THAT THIS VALUATION IS CORRECT. FURTHER IT MAY ALSO BE STATED THAT IN THE REFERRED CASES THE DVO'S VALUATION WAS FOUND TO BE UNRELIABLE. IN THIS CASE AS WELL THE VALUER'S REPORT IS FOUND TO BE DIVORCED FROM REALITY. AS IN THE REFERRED CASES IN THIS CASE TOO THE VALUER'S REPORT IS REJECTED. I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 6 THE APPELLANT HAS ALSO TAKING A CUE FROM THE LOANS GIVEN BY THE BANK ARGUED THAT THE POSITION OF ASSETS AND THEIR VALUATION WERE TOO ROBUST IN 1981 AND THAT THIS IN ITSELF WOULD JUSTIFY THE COST OF ACQUISITION OF SHARES ON 01.04.1981 AS HIGH AS RS. 90 288 PER SHARE. IN THIS VAIN EFFORT HE HIGHLIGHTED THE FACT THAT DURING THE FY 1980-81 THE SALE PROCEEDS WERE RS. 19 81 630 WHILE SECURED LOANS WERE RS.34 68 120 I.E. AT 175% OF THE SALE PROCEEDS. SIMILARLY IN 1981-82 THE SECURED LOANS BEING RS. 47 33 776 WERE 230% OF THE SALE PROCEEDS AT RS.20 53 759. THE SECURED LOANS WERE AGAINST HYPOTHECATION OF PRODUCTS AND THE TITLE DEED OF MAJOR FIXED ASSET WAS HELD BY UBI AS SECURITY AGAINST LOAN. IT WAS ALSO STATED THAT THE PERCENTAGE OF SECURED LOANS TO SALE PROCEEDS FELL STEEPLY DOWN TO 14 TO 16% DURING THE FYS 1997-98 AND 1998-1999. ALL THIS IN AN ATTEMPT TO JUSTIFY THE EXCESSIVELY HIGH VALUATION OF COST OF ACQUISITION OF UNLISTED SHARES OF THE PRIVATE LIMITED COMPANY RUN AND CONTROLLED BY THE APPELLANT'S FAMILY. THE ARGUMENTS PUT FORTH HAVE BEEN CONSIDERED. THE SECURED LOANS GIVEN BY THE BANK CANNOT BE TAKEN AS A REFLECTION OF HIGH FMV OF ASSETS OF THE CONCERN. LOANS ARE DISBURSED KEEPING MULTIPLE FACTORS IN VIEW SUCH AS THE CONCERN IS A GOING CONCERN IT HAS A REASONABLE AMOUNT OF ASSETS IT IS A PROFIT MAKING CONCERN ETC. LOANS CANNOT BE THE SOLE PARAMETER TO JUSTIFY AN UNREASONABLE VALUE ADOPTED BY THE VALUER. FURTHER THE PERCENTAGE OF LOAN TO THE SALE PROCEEDS DECEIVES THE FACT THAT THE ACTUAL AMOUNT OF LOAN GIVEN WAS ROUGHLY AROUND 35 TO 45 LAKHS OVER THE YEARS. IT NEVER CROSSED EVEN 50 LAKH AT ANY TIME. AS WOULD BE DISCUSSED IN THIS ORDER LATER ON THE VALUE OF ASSETS OF THE COMPANY COULD NOT BE MORE THAN 60-65 LAKHS IN 1981. EVEN IF THE VALUE IS ASSUMED TO BE AT 60-65 LAKHS I FIND THAT THE SECURED LOANS WERE AGAINST THE HYPOTHECATION OF PRODUCTS AND TITLE DEED OF ASSETS. A LOAN OF 35 LAKHS AGAINST THE TITLE DEED OF MAJOR FIXED ASSETS WORTH 60-65 LAKHS IS FULLY PROTECTED AGAINST ANY DEFAULT. THEREFORE LOANS BEING A CERTAIN PERCENTAGE OF SALE PROCEEDS FAILS TO SUPPORT THE CLAIM THAT THE FMV OF SHARES ON 01.04.1981 COULD BE AS HIGH AS 90 288 PER SHARE. COMING BACK TO THE PRIMARY FACTS ONCE AGAIN AND MOVING ON FROM HERE TO EXAMINE THE FMV OF THE SHARES ON O01.04.1981 IT IS REITERATED THAT THE APPELLANT HAD ACQUIRED 31.25 SHARES OF EASTERN TEA ESTATE (P) LTD AS UNDER: (I) 7 SHARES WERE ACQUIRED ON 11.04.1959 BY WAY OF GIFT FROM FATHER (II) 69 SHARES (JOINTLY WITH THREE OTHER SIBLINGS) WERE ACQUIRED ON 30.06.1959 BY VIRTUE OF GIFT FROM MOTHER. THE APPELLANT'S SHARE WAS 69/4 = 17.25 SHARES (II) 7 SHARES WERE ACQUIRED THROUGH JOINT APPLICATION TO THE COMPANY BY SUCCESSORS FOR REGISTRATION CONSEQUENT TO THE DEATH OF MOTHER. DURING THE YEAR 1996-97 A REVALUATION OF THE ASSETS OF THE COMPANY WAS UNDERTAKEN BY THE BOARD OF DIRECTORS AND A VALUATION REPORT WAS PREPARED BY SHRI JAYANT SARKAR. AS A RESULT OF THE REVALUATION OF ASSETS THE BOOK VALUE OF FIXED ASSETS WERE TAKEN AS RS.2 30 03 913 AS ON 01.04.1997 AT RS.2 32 47 820 AS ON 01.04.1998 AND AT RS.2 40 45 988 AS ON 01.04.1999. SHRI JAYANT SARKAR ALSO ESTIMATED THE VALUE OF FIXED ASSETS AS ON 01.04.1981 AT RS.1 36 97 000. ROY SUBODH & ASSOCIATES HAVE ADOPTED THE VALUATION MADE BY JAYANT SARKAR BUT HAVE TAKEN THE FMV OF FIXED ASSETS ON 01.04.1981 AT RS.1 46 59 082 INSTEAD OF RS.1 36 97 000. IF ONE CONSIDERS THE VALUE OF FIXED ASSETS AT RS.1 46 59 082 AS ON 01.04.1981 VISA-VIS THE VALUE OF FIXED ASSETS AT RS. 2 30 03 913 AS ON 01.04.1997 OR THE VALUES AS 01.04.1998 AND 01.04.1999 STATED ABOVE ONE FINDS THE VALUATION AT 01.04.1981 AS UNREASONABLY HIGH AND UNREAL. A PROPERTY OR A FIXED ASSET WORTH RS. 1.46 CRORES WOULD NOT REMAIN CONTAINED BETWEEN 2.3 OR 2.4 CRORES EVEN AFTER 16-17 YEARS HAVE PASSED BY. KNOWING THE WAY THE PRICES AND VALUES HAVE ESCALATED DURING THIS TIME PERIOD ONE CAN EASILY WITH SIMPLE COMMON SENSE INFER THAT A PROPERTY OR AN ASSET VALUED AT 1.4 CRORES IN 1981 WOULD BE AT SENSE INFER THAT A PROPERTY OR AN ASSET VALUED AT 1.4 CRORES IN 1981 WOULD BE AT LEAST 5 I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 7 CRORES IN 1998-99. CONVERSELY IT ALSO MEANS THAT A PROPERTY WHOSE VALUE WAS 2.4 CRORES IN 1999 WOULD BE AT A FAR LESSER VALUE IN 1981 OF LET US SAY RS. 60 TO 65 LAKHS. THIS CAN BE EASILY COMPREHENDED IF WE UTILIZE THE COST INFLATION INDEX AND CALCULATE THE VALUES AS ON 01.4.1998 TO 01.04.1981. IN THE CASE OF THE APPELLANT THIS BECOMES EVEN STARKER BECAUSE DURING THE YEARS 1981-82 AND 1982-83 EASTERN TEA ESTATES PVT. LTD. HAD BEEN INCURRING LOSSES. THEREFORE IN MY VIEW THE VALUATION ADOPTED BY SHRI JAYANT SARKAR AND CONSEQUENTLY THE VALUATION BY ROY SUBODH & ASSOCIATES DOES NOT PROVIDE AN HONEST PICTURE OF REALITY AND THE VALUE OF FIXED ASSETS AS ON 01.04.1981 APPEARS TO BE UNREASONABLY HIGH. THE SECOND VALUATION REPORT WHICH HAS BEEN ADOPTED BY THE APPELLANT IN HIS RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 WAS PREPARED BY ROY SUBODH & ASSOCIATES. THIS VALUATION HAS ADOPTED THE VALUATION OF FIXED ASSETS AS ON 01.04.1981 MADE BY SHRI JAYANT SARKAR. THE VALUATION AS ON 01.04.1981 HAS BEEN DONE KEEPING THE 'NET ASSET VALUE' METHOD IN MIND. THEY HAVE REFERRED TO THE COMPANY'S AUDITED ACCOUNTS FOR THE YEAR ENDED ON 01.04.1982 WHICH ALSO HAD THE DETAILS RELATED TO THE LAST YEAR I.E. THE YEAR ENDING ON 31.03.1981. THESE FIGURES WERE THE SAME AS ON 01.04.1981. FOR THE VALUATION OF FMV OF LANDED PROPERTY OF THE COMPANY THE VALUATION MADE BY SHRI JAYANT SARKAR CHARTERED ENGINEER & GOVT. REGISTERED VALUER AS ON 01.04.1981 HAS BEEN ADOPTED. THE VALUATION ADOPTED FOR MARTYCHERRA TEA ESTATE DIRECTOR'S BUNGALOW AT ITKHOLGHAT ROAD FISHERY LAND AND 2 STORIED BUILDING AT NAGNAHA LANE IS RS.1 36 97 000. THE VALUE OF CURRENT ASSETS AND CURRENT LIABILITIES HAVE BEEN TAKEN AT BOOK VALUE. THIS CREATES A DISJUNCT BETWEEN THE VALUATION OF ASSETS AND LIABILITIES. WHEREAS THE FIXED ASSETS WHICH HAVE BEEN VALUED AT RS. 1 36 9700 BY SHRI JAYANT SARKAR AND WHICH HAVE BEEN TAKEN AT RS. 1 46 59 082 AS FMV OF FIXED ASSETS AS ON O1.04.1981 BY ROY SUBODH ASSOCIATES THE LIABILITIES HAVE BEEN TAKEN STRICTLY AT BOOK VALUE AND NOT AT FMV. SO WHILE THE FIXED ASSETS HAVE A 'PROJECTION BEYOND THE BOOK VALUE THE LIABILITIES HAVE REMAINED SHRUNK' IN THEIR PRESENCE. THIS MEANS THE ASSETS HAVE GOT UNDULY ENHANCED VIS-A-VIS LIABILITIES. WITH THIS LOP-SIDED SELECTION OF VALUES THE FMV OF SHARES AS ON 01.04.1981 HAVE GOT ENHANCED AND DIVORCED FROM REALITY. THEREFORE TO STATE THAT THE FMV OF SHARES OF AN UNLISTED PRIVATE LIMITED COMPANY WAS AT RS. 90 284 EVEN THOUGH IT HAD INCURRED LOSSES OF RS.5 63 786 AS ON 31.03.1981 AND OF RS. 9 51 250 ON 31.03.1982 (THE FINANCIAL STATEMENTS FOR THE LATER FYS ARE NOT AVAILABLE ON RECORD) WOULD BE TO PROJECT THE SHADOW OF A LIZARD TO THE SEMBLANCE OF A DINOSAUR. FOR THE REASON OF THIS INHERENT DEFECT THE VALUATION RENDERED BY ROY SUBODH & ASSOCIATES LOSES ITS CREDIBILITY. AND FOR THIS VERY REASON THE DECISIONS RELIED UPON BY THE LD. AR AND ALL THE ARGUMENTS EMANATING FROM THOSE DECISIONS FAIL TO MAKE AN IMPACT. HENCE THE SAME IS REJECTED. THE PREDECESSOR ID. CIT (A) DURGAPUR HAS CONSIDERED THE VALUES IN TERMS OF FMV AND FOR THE UNAVAILABLE DATA HE HAS TAKEN THE RE-VALUATION OF ASSETS DONE BY THE DIRECTORS AS POINT OF DEPARTURE AND HAS INDEXED THE FIGURES BACK TO 01.04.1981. ALTHOUGH THIS MAY ALSO NOT YIELD THE CORRECT VALUE BECAUSE AT THE TIME OF REVALUATION BEING DONE IN 1996 SITUATIONS WITHIN THE COMPANY AND IN THE MARKET WERE VERY DIFFERENT FROM THAT IN 1981 AND THEREFORE THE FMV AS IN 1996 WOULD NOT YIELD A CORRECT REVERSE PROJECTION IN 1981 YET IN MY VIEW THIS IS THE BEST WAY AHEAD AS COMPLETE DATA IS NOT AVAILABLE FOR ASCERTAINING THE FMV AS ON 01.04.1981. I ALSO FIND THAT THE FMV OF SHARES AS ON 01.04.1981 ADOPTED BY MY PREDECESSOR IN OFFICE CAME QUITE CLOSE TO WHAT THE APPELLANT HAD DECLARED IN HIS ORIGINAL RETURN OF INCOME. THE SAID VALUATION IN THE ORIGINAL RETURN WAS ACCEPTABLE TO HIM TILL HE HAD ANOTHER VALUATION WHICH SUITED HIM MORE. HAVING EXAMINED THE VARIOUS VALUATIONS AND KEEPING THE FACTS IN PERSPECTIVE ONE STILL FEELS THE NEED TO ASCERTAIN THE BEST AND THE CLOSEST-TO-TRUTH VALUES FOR FMV AS ON 01.04.1981. THE INCOME-TAX ACT 1961 HAS THE PROVISIONS OF RULE 11UA. THOUGH THE PROVISIONS ARE NOT APPLICABLE TO A.Y 2001-02 AND THOUGH THERE IS NO INTENTION TO APPLY THIS RULE TO THE ESTIMATION OF FMV IN THE APPELLANTS CASE A REFERENCE IS BEING MADE TO IT I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 8 IN ORDER TO HAVE A CLEARER PICTURE OF THE CORRECT VALUATION AS WOULD BE REQUIRED UNDER INCOME TAX ACT 1961. IT IS REITERATED THAT A REFERENCE TO RULE 11UA IS MADE ONLY AND ONLY FOR HAVING AN IDEA OF WHERE THE FMV IN THIS CASE SHOULD STAND. THE REFERENCE AND THE WORKING BASED ON ITS IS AS UNDER: RULE 11UA DETERMINATION OF FAIR MARKET VALUE. THE FAIR MARKET VALUE OF UNQUOTED EQUITY SHARES SHALL BE THE VALUE ON THE VALUATION DATE OF SUCH UNQUOTED EQUITY SHARES AS DETERMINED IN THE FOLLOWING MANNER NAMELY:- THE FAIR MARKET VALUE OF UNQUOTED EQUITY SHARES = (A+B+C+D-L) X (PV)/(PE) WHERE A=BOOK VALUE OF ALL THE ASSETS (OTHER THAN JEWELLERY ARTISTIC WORK SHARES SECURITIES AND IMMOVABLE PROPERTY) IN THE BALANCE-SHEET AS REDUCED BY (I)ANY AMOUNT OF INCOME-TAX PAID IF ANY LESS THE AMOUNT OF INCOME-TAX REFUND CLAIMED IF ANY; AND (II) ANY AMOUNT SHOWN AS ASSET INCLUDING THE UNAMORTISED AMOUNT OF DEFERRED EXPENDITURE WHICH DOES NOT REPRESENT THE VALUE OF ANY ASSET; B= THE PRICE WHICH THE JEWELLERY AND ARTISTIC WORK WOULD FETCH IF SOLD IN THE OPEN MARKET ON THE BASIS OF THE VALUATION REPORT OBTAINED FROM A REGISTERED VALUER; C= FAIR MARKET VALUE OF SHARES AND SECURITIES AS DETERMINED IN THE MANNER PROVIDED IN THIS RULE; D= THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF THE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF THE IMMOVABLE PROPERTY; L= BOOK VALUE OF LIABILITIES SHOWN IN THE BALANCE SHEET BUT NOT INCLUDING THE FOLLOWING AMOUNTS NAMELY:- (I)THE PAID UP CAPITAL IN RESPECT OF EQUITY SHARES: (II) THE AMOUNT SET APART FOR PAYMENT OF DIVIDENDS ON PREFERENCE SHARES AND EQUITY SHARES WHERE SUCH DIVIDENDS HAVE NOT BEEN DECLARED BEFORE THE DATE OF TRANSFER AT A GENERAL BODY MEETING OF THE COMPANY; (III) RESERVES AND SURPLUS BY WHATEVER NAME CALLED EVEN IF THE RESULTING FIGURE IS NEGATIVE OTHER THAN THOSE SET APART TOWARDS DEPRECIATION; (IV) ANY AMOUNT REPRESENTING PROVISION FOR TAXATION OTHER THAN AMOUNT OF INCOME-TAX PAID IF ANY LESS THE AMOUNT OF INCOME-TAX CLAIMED AS REFUND IF ANY TO THE EXTENT OF THE EXCESS OVER THE TAX PAYABLE WITH REFERENCE TO THE BOOK PROFITS IN ACCORDANCE WITH THE LAW APPLICABLE THERETO; (V) ANY AMOUNT REPRESENTING PROVISIONS MADE FOR MEETING LIABILITIES OTHER THAN ASCERTAINED LIABILITIES; (VI) ANY AMOUNT REPRESENTING CONTINGENT LIABILITIES OTHER THAN ARREARS OF DIVIDENDS PAYABLE IN RESPECT OF CUMULATIVE PREFERENCE SHARES; PV= THE PAID UP VALUE OF SUCH EQUITY SHARES; PE= TOTAL AMOUNT OF PAID UP EQUITY SHARE CAPITAL AS SHOWN IN THE BALANCE SHEET IN THE PRESENT CASE FAIR MARKET VALUE OF THE UNQUOTED SHARES IS CALCULATED AS UNDER: A: BOOK VALUE OF ALL THE ASSETS (OTHER THAN JEWELLERY ARTISTIC WORK SHARES SECURITIES AND IMMOVABLE PROPERTY) IN THE BALANCE SHEET PARTICULARS VALUE ON 31 ST MARCH 1981 I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 9 FIXED ASSETS: AT HEAD OFFICE MOTOR CAR 283.00 FURNITURE FIXTURE & FITTINGS 5 886.00 MACHINERY 310.00 LIBRARY 346.00 TEA ESTATE MACHINERY 3 17 290.50 MOTOR TRUCK & JEEP 14 463.00 TRACTOR & IMPLEMENTS 14 883.00 FURNITURE FIXTURE & FITTINGS 1 609.00 ELECTRICAL INSTALLATION 268.00 OVERHEAD ELECTRIC LINE 220.00 WATER 215.00 BOOK VALUE OF FIXED ASSETS TAKEN OVER BY SMT. ARATI DUTT EX. JT. MANAGING DIRECTOR 6 06 306.81 INVESTMENT 716.00 OTHER ASSETS 21 60 220.00 TOTAL (A) 31 23 016.31 B: NIL C: NIL D: THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF THE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF THE IMMOVABLE PROPERTY. THE VALUE OF IMMOVABLE PROPERTY IS CALCULATED ON THE BASIS OF THE FINANCIAL STATEMENT OF THE COMPANY FOR THE YEAR ENDING 1996-97. THE SAID FINANCIAL STATEMENT INCLUDES THE SCHEDULE OF FIXED ASSETS PROVIDED BY THE COMPANY. IN THE FIXED ASSETS SCHEDULE THE COMPANY-APPROVED REVALUATION OF ASSETS VIDE BOARD RESOLUTION DATED 25.03.1996 HAVE BEEN ADOPTED. ON THE BASIS OF THE REVALUATION THE ASSESSABLE VALUE OF IMMOVABLE PROPERTY CAN BE ARRIVED AT THROUGH REVERSE INDEXING OR USING THE METHOD OF CALCULATING BACK THE VALUES AS ON 01.04.1981 BY INDEXING BACK THE FIGURES TO 01.04.1981. THIS HAS BEEN DONE AS UNDER: PARTICULARS VALUE ON 31 ST MARCH 1997 HEAD OFFICE: LANDED PROPERTY 30 20 000.00 BUILDING 8 41 382.00 CHIRAKUNDI: BLOCK & DEVELOPMENT 13 38 000.00 MATICHERRA TEA ESTATE: BLOCK 20 96 500.00 BUILDING 28 33 510.00 NEW PLANTATION 1 09 13 560.00 TOTA (D) AS ON 31.03.97 2 10 42 952.00 BY APPLYING INDEXATION WE CAN ARRIVE AT ASSESSABLE VALUE OF IMMOVABLE PROPERTY ON 31.03.1981 WHICH IS AS FOLLOWS: I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 10 TAKING INTO ACCOUNT THE COST INFLATION INDEX OF THE FINANCIAL YEAR 1981-82 IS 100 AND FOR FINANCIAL YEAR 1997-98 IS 331 THE ASSESSABLE VALUE IS COMPUTED AS FOLLOWS. 2 10 42 952*100/331 = 63 57 387.31 A+B+C+D = 39 31 149.38+0+0+63 57 387.31 = 1 02 88 536.69 L = 36 14 099.39+1 62 152.76+14 87 419.24 = 52 63 671.39 FAIR MARKET VALUE OF UNQUOTED EQUITY SHARE = (A+B+C+D-L) X (PV)/(PE) [1 02 88 536.69(-) 52 63 671.39] X 1000/128000 = 39256.76 THUS THE FMV AS ON 01.04.1981 APPLYING THE METHOD PRESCRIBED IN RULE 11UA COMES TO RS. 39 256. WHEN THIS VALUE IS KEPT IN SIGHT WITH THE DIFFERENT VALUATIONS INVOLVING THE APPELLANTS VALUATION IN THE ORIGINAL RETURN THE RE-VALUATION IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 THE LD. AOS VALUATION AND THAT MADE BY MY PREDECESSOR LD. CIT(A) DURGAPUR I FIND THE VALUES ADOPTED BY MY PREDECESSOR STAND CLOSEST TO IT. AS SUCH I FIND MYSELF IN CONSONANCE WITH THE VALUATION OF FMV ADOPTED BY MY PREDECESSOR. I MAY ALSO ADD THAT THE APPEAL BEFORE THE HONBLE ITAT KOLKATA THE MERITS OF THE CASE WERE YET TO BE EXAMINED. THE CASE WAS SET ASIDE TO THE FILE OF THE LD. AO ON A TECHNICAL ISSUE. THEREFORE SINCE THE HONBLE ITAT KOLKATA NEVER HAD AN OCCASION TO EXAMINE THE VALUES ADOPTED BY MY PREDECESSOR I DEEM IT FIT TO FOLLOW MY PREDECESSOR WITH AN OBSERVATION THAT THE VALUATION UNDER RULE 11UA COULD HAVE FURTHER REDUCED THE APPELLANTS CLAIM FOR FMV AS ON 01.04.1981. BUT SINCE THESE PROVISIONS ARE NOT APPLICABLE TO THE AY UNDER CONSIDERATION THE SAME ARE LEFT ALONE. AS A RESULT I HOLD THAT THE COST OF ACQUISITION OF 24.25 SHARES IS RS. 45 05 596 AND THAT OF 7 SHARES ACQUIRED IN FY 1991-92 IS RS. 6 53 560/- LEADING TO THE TOTAL COST OF ACQUISITION AT RS. 51 59 156. THIS VALUATION COMES CLOSEST TO THE ORIGINAL VALUES ADOPTED BY APPELLANT AT RS. 55 350 IN HIS ORIGINAL RETURN OF INCOME. THE LONG TERM CAPITAL GAINS ARE DIRECTED TO BE COMPUTED ACCORDINGLY TAKING THE COST OF ACQUISITION OF 24.25 SHARES AT 45 05 596 AND FOR RS. 6 53 560 AS ON 01.04.1981. THESE GROUNDS OF APPEAL ARE THEREFORE DISMISSED. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS AGAINST AND IN SUPPORT OF THE CIT(A)S ACTION DECLINING THE COST OF ACQUISITION OF ASSESSEES SHARES IN ABOVE-STATED COMPANY @RS.90284 AS ON 01.04.1981. SUFFICE TO SAY THE ASSESSEE HAD RELIED UPON ITS REGISTERED VALUER/CHARTERED ENGINEERS VALUATION REPORT DECLARING THE IMPUGNED VALUE @RS.90284. THE ASSESSING OFFICER HAD HELD THE SAME TO BE RS.1000/- PER SHARE ONLY GOING BY THE BOOK VALUE THEREOF. THE CIT(A) HAS GONE BY RULE 11UA OF THE INCOME TAX RULES ON THE OTHER HAND. 4. THE ASSESSEE HAD ADMITTEDLY ACQUIRED 7 17.25 AND 7 UNITS OF SHARES FROM HIS FATHER AND MOTHER BY WAY OF GIFT AND THROUGH LATTERS SUCCESSION AFTER DEATH ON 11.04.1959 30.06.1959 AND 24.08.1991; WITHOUT CONSIDERATION; RESPECTIVELY. WE ARE THEREFORE OF THE VIEW THAT GOING BY SECTION 49(1) CLAUSE (II) AND (III) OF THE ACT COST OF ACQUISITION THEREOF HAS TO BE DEEMED AS THE COST BORNE BY THE SAID PREVIOUS OWNER W.E.F 01/04/1981 ONLY. HONBLE JURISDICTIONAL HIGH COURTS DECISION IN CIT I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 11 VS. SMT. MINA DEOGUN IN ITA NO.438 OF 2008 DATED 20.04.2015 ALSO REITERATES THE VERY LEGAL PROPOSITION. 5. COMING TO VALUATION ASPECT THERE IS HARDLY ANY DISPUTE THAT SECTION 55A(A) ENVISAGES THAT AN ASSESSING OFFICER MAY MAKE REFERENCE TO THE VALUATION OFFICER ONLY IN CASE THE VALUE OF THE CAPITAL ASSET SO CLAIMED IS LESS THAN ITS FAIR MARKET VALUE. WE MAKE IT CLEAR THAT THE LEGISLATIVE AMENDMENT INSERTING THE CLINCHING STATUTORY EXPRESSION IS AT VARIANCE WITH ITS FAIR MARKET VALUE VIDE FINANCE ACT 2012 W.E.F. 01/07/2012 IS APPLICABLE WITH PROSPECTIVE EFFECT ONLY. HONBLE GUJARAT HIGH COURTS DECISION (2014) 367 ITR 238 ( GUJ ) GAURANGINIBEN S. SHODHAN HOLDS THAT THE ASSESSING OFFICER COULD PROCEED ONLY UNDER SECTION 55A(A) IS A CASE INVOLVING REGISTERED VALUERS REPORT AND NOT UNDER ANY OTHER CLAUSE. THE SAID UNAMENDED CLAUSE; AS INDICATED HEREINABOVE WOULD COME INTO PLAY IN THE RELEVANT PREVIOUS YEAR. WE THUS CONCLUDE IN THESE FACTS AND CIRCUMSTANCES THAT THE LEARNED LOWER AUTHORITIES ACTION INTERFERING WITH THE REGISTERED VALUERS REPORT @RS.90284/PER UNIT IS NOT SUSTAINABLE. THE SAME STANDS REVERSED. THIS ASSESSEE SUCCEEDS IN HIS SOLE SUBSTANTIVE GRIEVANCE. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 28.02.2020. SD/ SD/- ( J. SUDHAKAR REDDY ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER /KOLKATA; / DATE: 28/02/2020 RS I.T.A NO.2041/KOL/2019 SHRI AMITABHA CHAUDHURI PAGE | 12 / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR I.T.A.T KOLKATA BENCHES KOLKATA . 1. THE APPELLANT - SHRI AMITABHA CHAUDHURI 2. THE RESPONDENT- DCIT CIRCLE-1 DURGAPUR 3. ( ) / THE CIT(A) KOLKATA [SENT THROUGH EMAIL] 4. / CIT 5. / DR ITAT KOLKATA [SENT THROUGH EMAIL] 6. [ / GUARD FILE.