Section 142A of the Income-tax Act, 1961—Estimate by Valuation Officer—Where an express mandate was given under section 142A, the Valuation Officer could not have travelled in the arena of section 55A to determine the FMV.

Facts: Aggrieved by the reduction in FMV of property as on 01-4-1981 by the AO resulting in enhanced capital gains on sale of land, the assessee preferred appeal before the CIT(A). The action of AO was thus confirmed by CIT(A). Being aggrieved, assessee went on appeal before Tribunal.

Held, that Where an express mandate was given under section 142A, the Valuation Officer could not have travelled in the arena of section 55A to determine the FMV. However, AO himself has not chosen to exercise powers under section 55A and therefore, we do not require to delineate any further on this aspect. As further noted, the AO could not invoke powers vested under section 142A either in the given facts of the case. The RV has adopted reverse calculation of indexation which method has been approved by the co-ordinate bench in some cases as noted above. The AO has failed to bring on record any adversities in applicability of such method but has simply adopted the FMV determined by the Valuation Officer on the strength of some comparable instances under a different provision without any mandate. On facts too, the assessee has claimed that the case of the assessee is not comparable with such instances having regard to the different nature of land and different complexities. AO has also failed to observe the principles of natural justice while confronting the findings of the DVO inasmuch as the copy of order of the DVO was also not provided at the time of hearing.In totality, the action of the Revenue is seriously marred by multiple and intrinsic legal infirmities and violation of principles of natural justice. The assessee, on the other hand, has discharged its primary onus to support the FMV as on 01-4-1981. Thus, in our view, the jurisdictional defect in issuing firstly unlawful reference under section 142A and secondly, adopting FMV as per the valuation order passed under a wholly different section i.e. 55A in gross contradiction of mandate is prima facie not curable. Coupled with this, the valuation report of RV could not be successfully demonstrated to be unworthy of acceptance. We thus set aside the order of the CIT(A) and direct the AO to restore the claim of the assessee. - DASHRATHBHAI G. PATEL V/s DY. CIT - [2020] 182 ITD 327 (ITAT-AHMEDABAD)