RECENT JUDGEMENT & CONTROVERSIAL ISSUES ON CAPITAL GAINS TAX

RECENT JUDGEMENT & CONTROVERSIAL ISSUES ON CAPITAL GAINS TAX.
By, Vimal C.Punmiya.
CHARTERED ACCOUNTANT.

The Sections particularly relating to the Computation of Income from Capital Gains deals from Section 45 to 55A under Chapter IV E of the Income Tax Act, 1961. The Scheme of these sections is as under :

Section 45 : defines capital gains, makes them chargeable to income-tax and allots the appropriate year for such charge. It also enacts certain deeming provisions.
Section 46(1),47 & 53 : lay down the circumstances wherein section 45 is not to come into operation.
Section 46(2) : lays down the method of taxation, in the hands of shareholders, of what was exempted under section 46(1) in the hands of the company.
Section 47(A) : provides for withdrawal of exemption in certain cases.
Section 48 : lays down the mode of computation of capital gains and deductions there from.
Section 49 : lays down the method of ascertainment of the cost of acquisition of an asset which became the property of the assessee in the circumstances referred to in sections 46(1) and 47, etc.
Section 50 : lays down the method of ascertainment of the cost of acquisition in case of depreciable assets, where depreciation has been earlier obtained by the assessee.
Section 51 : merely provides that if the asset was the subject-matter of negotiations for transfer on some earlier occasion, the advance or other money received or retained thereabout shall go into the calculation of the cost of acquisition.

Section 52 : laid down the conditions when the Income Tax Officer could ignore, for ascertainment of the full value of consideration for transfer of a capital asset, the amount purported to be agreed to by the parties.
10. Section 54 : affords relief in respect of profit on sale of
property used for residence.
11. Section 54D : stipulates cases where capital gains on
compulsory acquisition of lands and buildings are not to be
charged to tax for and from assessment year 1974-75.
12. Section 54E : stipulates cases where long-term capital gains
in certain cases are not to be charged to tax. This is operative
for and from assessment year 1978-79.
13. Section 54F : stipulates cases where long-term capital gains
in certain cases are not be to charged to tax in case of
investment in residential house. This is operative for and from
assessment year 1983-84.
14. Section 54G : stipulates cases where capital gains on transfer
of assets in cases of shifting of industrial undertaking from
urban area are not to be charged on fulfillment of the
conditions laid down in that behalf. This is operative for and
from assessment year 1988-89.
15. Section 55 : defines certain expressions in relation to capital
gains.
16. Section 55A : provides for reference to a valuation officer of
certain capital assets. This came into force from 1-1-1973.

The following principal changes have been made in the Act particularly relating to following provisions.

any transfer by way of distribution of the capital assets by a company in liquidation is not regarded as a transfer for the purpose of charging capital gains in the hands of the company. But, the shareholder receiving the money or other

assets, as a result of liquidation, from the company has been made chargeable on the difference between the money so received and / or the market value of the assets on the date of distribution and the cost of acquisition, etc., of the shares as per section 48 subject to the appropriate adjustment, if any, on the portion of the amount or value of the capital asset which has been assessed as dividend under section 2(22)(c) of the 1961 Act.

any distribution of capital assets on the dissolution of a firm, body of individuals, or other association of persons, is regarded as a transfer for the purpose of capital gains tax.

the distinction drawn between assets acquired as a result of partition of a Hindu undivided family or by way of gift, before and up to April 1, 1956, has been abolished. A uniform procedure is laid down according to which, for assets acquired before March 31st 1981, then either the market value on the date of the acquisition or the market value on April, 1, 1981, at the option of the assessee, is adopted, whatever be the mode of acquisition.

Based on the above, we now deal with the today’s topic for the day being the recent decision of Tribunals, Hon’ble High Courts & Supreme Court.

I: We First Deal With The Recent Judgement Of Tribunals:

1. Asstt. CIT v. Narendra I. Bhuva (2004) 90 ITD 174(Mum.)
Ford Tourer 1931 model of car purchased by assessee in 1983
which remained parked at his residence and was never used,
could not be regarded as personal effect.

Anil S. Gore v. Asstt. CIT(2004) ITD 222(Mum.)
For assessment year 1991-92, ‘units’ of Unit Trust of India
could not be regarded as ‘shares’.

Kantilal T. Sanghvi v. Asstt. CIT(2004) 89 ITD 282 (Mum.)
There is no capital gain or loss on encashment of Indira Vikas Patras on their maturity as no transfer is involved; as such, assessee holding the same cannot claim benefit of indexed cost of acquisition.

Dhruv N. Shah v. Dy. CIT(2004) 88 ITD 118 (Mum.)
Liquidated damages received by assessee in a case of
fraudulent sale of flat by a party to assessee, could not be
brought to tax as capital gain, since in absence of right, title or
interest in impugned flat, the question of conveying right, title or
interest to assessee by an agreement could not arise.

5. Smt. Geeta Devi Mahipal v. ITO (2004) 1 SOT 468(Jodh.)
Income from sale of shares allotted on offer of public issue and
treated as investment in wealth-tax assessment, is assessable
as capital gains and not as business income.

6. ITO v. Md. Nasser Ahmed(2004) 2 SOT 389 (Gau.)
Where assessee, being a co-owner of land and building, sold
out his right to construct three floors to different parties, share of
sale proceeds was liable for taxation as capital gains and not as
income from other sources.
7. Sachdeva & Sons (E.O.U.) v. Dy. CIT(2004) 82 TTJ(Asr.) 847
On conversion of firm to company when erstwhile partners are
only shareholders in company and shares are allotted to them in
same proportion as in firm, there is no transfer attracting section
45(4).

8. ITO v. Ramesh M. Shah (2004) 2 SOT 558 ( Mum.)
Amount credited in capital account of retired partner upon
revaluation of assets of firm is not taxable as capital gain as
there is no transfer.

9. Shevantibhai C. Mehta v. ITO (2004) 83 TTJ (Pune) 542
Amount received by the retiring partner was liable to capital
gains tax where retiring partner had assigned his interest in
partnership firm specifically by a deed of retirement executed in
writing to continuing partners and consideration for same was
agreed to be paid in lump sum.

10. Asstt. CIT v. A.R.Dahiya ( 2004) 89 ITD 377 (Chd.)
Enhanced compensation is to be charged to tax in previous year
in which it is received and Assessing Officer is not to bother as
to when enhanced compensation ‘accrued’ to assessee.

11. Addl. CIT v. Lake Palace Hotels & Models Ltd. (2004) 139
Taxman 159 (Jodh.)( Mag.)
Where assessee-company gave land on lease for 72 years to a
hotel for a lease rent fixed under agreement, Assessing Officer
could not treat refundable deposit of 2.5 crores received by
assessee at 9 percent interest as value of consideration and
calculate capital gains on transaction treating it as a case of
transfer of land.

12. Dy. CIT v. Ramdeo Kumar (2004) 140 Taxman 102 (Jodh.)
(Mag.)
Assessing Officer was not justified in substituting cost of
acquisition shown by assessee by reduced cost of acquisition based on Inspector’s report without confronting the assessee with Inspector’s report.

13. Naveen Kumar Gaulechha v. ITO (2004) 1 SOT 167 (Delhi)
Revenue cannot proceed with Computation of Capital Gain by
adopting valuation of DVO for sale consideration while
ignoring same report for purpose of cost of acquisition of same
property.

14. Ketan Bolinjkar v. Asstt. CIT (2004) 2 SOT 868 (Mum.)
Where assessees sold their ownership rights in a property and
claimed deduction of certain amount paid to their sister for
peacefully, vacating portion of property occupied by her
deduction was to be allowed u/s. 54.

15. Asstt. CIT v. Malu Khan & Party (2004) 3 SOT 529 ( Jodh.)
Estimation of fair market value is not required as per section
50(1)(ii).

16. Dy. CIT v. Everest Woollen Mills (P.) Ltd.(2004) 3 SOT 521
(Chd.)
Where written down value of machinery sold during previous
year and cost of new machinery in that block of assets,
acquired during same previous year, was more than sale
proceeds, no income was liable to capital gains under
section 50(2).

17. D. Anand Basappa v. ITO (2004) 91 ITD 53 (Bang.)
To claim deduction under section 54, there is no bar on
acquiring more than one residential house out of proceeds of
one residential house.

18. Asstt. CIT v. Smt. Uma Budhia (2004) 141 Taxman 39 (Kol.)
(Mag.)
Word ‘purchase’ for purpose of section 54, must be interpreted
in its ordinary meaning as buying for a price or equivalent of
price.

19. Ketan Bolinjkar v. Asstt. CIT (2004) 2 SOT 868 (Mum.)
Where though assessees entered into agreement for purchase
of new house prior to sale of house, they had taken possession
of new house before expiry of limit of two years from date of
sale of residential house, deduction u/s. 54 can be granted.

20. Asstt. CIT v. Smt. Uma Budhia (2004) 141 Taxman 39(Kol.)
(Mag.)
If amount of capital gain is utilized by assessee for purpose of
construction of new asset before date of furnishing of return of
income under section 139(1), it is immaterial as to whether
during intervening period, same was deposited in any bank as
required under section 54(2) or utilized for some other
purposes.

21. Clear Investment & Trading (P.) Ltd. v. Dy. CIT (2004) 1 SOT
174 (Delhi)
Where assessee received compensation on acquisition of
agricultural land by Government and compensation was treated
as exempt by Assessing Officer, additional compensation would
also be exempt from tax.

22. Asstt. CIT v. Madan Lal Bassi (2004) 88 ITD 557 (Chd.)
If by applying section 54F, there is no income in hands of a
minor child to be added, benefit under section 54F cannot be
denied to minor child on ground that father of minor child had a
residential house at time of transfer of capital asset.

23. Smt. Rita Gaur v. Dy. CIT (2004) 90 ITD 24 (Luck.)
For claiming deduction under section 54F, mere purchase of
residential plot is not sufficient, assessee has to construct ( or
purchase) a house within specified period.

24. Smt. Hansa Bai Sanghi v. ITO (2004) 89 ITD 239 (Hyd.)
Where assessee purchased ground floor of a house and later,
when vendor build first floor, assessee purchased first floor by
separate sale deeds, assessing authority was not justified in
disallowing assessee’s claim for exemption of capital gains on
ground that ground floor and first floor constituted two residential
houses and, therefore, provisions of section 54F(2) were
attracted.

25. ITO v. Smt. Rajkumar Jain (2004) 3 SOT 145 (Jp.)(SMC)
Question of cost of construction cannot be referred to Valuation
Officer except under sections 55A and 268L.

26. Jagan Nath Singh Lodha v. ITO (2004) 85 TTJ(Jodh.)173.
Failure to invest unutilized amount of capital gain in Capital
Gains Account Scheme, where such failure was unintentional
and for reasons beyond assessee’s control, would not disentitle
assessee to claim of exemption.

27. Ms. Rubab M. Kazerani v. Jt.CIT (2004) 91 ITD 429 (Mum.) 7
(TM).
Neither Assessing Officer nor Commissioner could assume
power under section 55A(a) to give a direction where value of
property disclosed by assessee based on an approved valuer’s
report was on a higher side.

II. On The Recent Judgements of the High Courts & Supreme Court:

1. Capital gains is respect of compulsory acquisition of land :
Year in which gains are assessable :-
CIT v. C.P. Lonappan and Sons [2004] 265 ITR 101 (Ker)
Effect of section 45(5) and provisions of Land Acquisition Act is
that the date of award is the date of transfer.
Advance towards compensation was received in August 1991, and
the award was made in December, 1992.
Entire gains were assessable in assessment year 1993-94.
Income-tax Act, 1961, s. 45(5)-Land Acquisition Act, 1894, ss. 11, 12.

2. Year of taxability of capital gains:
CIT v. Vimal Kumar Surana [2004] 269 ITR 288 (Raj)
Contribution to firm in the form of precious stones.
The Tribunal had found that so far as contribution of precious
stones was concerned no books were maintained, therefore, the
date January 4, 1976, should be taken as the relevant date for
taxing the capital gain.
The capital gain could not be taxed in the assessment year 1977-
78. The relevant year for that was 1976-77.

3. Effect of insertion of sub-sections (3) and (4) of s. 45 w.e.f.
1-4-1988.
CIT v. A.N. Naik Associates [2004] 265 ITR 346 (Bom)
CIT v. Rangavi Realtors [2004] 265 ITR 346 (Bom)
Transfer of assets to partner by existing firm or by a partner to firm.
The gains was assessable as capital gains.

4. For A.Y. 1982-83.
CIT v. Subodhchandra S. Patel [2004] 265 ITR 445 (Guj)
Contribution of capital assets by partner is transfer.
But consideration cannot be determined for purposes of section 45.
Capital gains tax cannot be levied.

5. CIT v. Lingmallu Raghukumar (2001) 247 ITR 801 (SC).
The Supreme Court has held that when a partner retires from a
firm and the amount of his share in the partnership assets after
deduction of liabilities and prior charges, is determined on
taking accounts in the manner prescribed by the partnership
law, there is no element of transfer of interest in the partnership
assets by the retired partner to the continuing partners and the
amount received by the retiring partner is not capital gain.

6. After dissolution of firm, the affairs of firm was carried on by
erstwhile partners as association of persons for purposes of
winding up.
Set aside and matters remanded for fresh disposal, in.
M. Janardhana Rao v. Jt. CIT [2005] 273 ITR 50 (SC)
There was no distribution of capital assets of firm on dissolution
and therefore, no capital gains arose. The firm stood dissolved
with effect from December 6, 1987. The assets of the firm were
ultimately sold to the assessee under orders of the court in
winding up proceedings on November 20, 1994.

The Commissioner, exercising his revisional powers u/s 263, took
the view that as a result of the dissolution of the firm and passing
of business and assets of the firm to the hands of association of
persons there was a transfer in terms of section 45(4) of the Act,
which attracted liability of capital gains tax and that stocks of the
dissolved firm were undervalued. Accordingly, he set aside the
assessment order and remanded the case for reassessment.

On appeal, the Tribunal held that there was no transfer of capital
assets of the firm to the partners so as to attract the provisions of
section 45(4) and as such no capital gains tax was leviable on the
firm and that there was nothing wrong on the part of the firm in
valuing its closing stock at cost instead of market price as on the
date of the dissolution of the firm.

On reference, the High Court, held :

(I) that although the firm stood dissolved on December 6, 1987, yet
for a limited purpose of winding up of the affairs of the firm, it
continued till its assets and business were sold as a going
concern on Nov 20, 1994.
Thus, the firm continued to hold the properties as owner till Nov
20, 1994. Hence, there was no distribution of capital assets of
the firm despite its dissolution and therefore the firm could not
have been made liable for paying capital gains tax in terms of
section 45(4) of the Act, in view of the decision of the Apex Court
in the case of Saligram Ruplal Khanna vs Kanwar Rajnath [1974]
AIR 1974 SC 1094 applied.

(ii) That at no point of time had the business carried on by the firm
despite its dissolution been closed during the previous year
pertaining to the assessment year in question and the same set
of persons continued to carry on the same as association of
persons with the same share ratio.
Therefore, the Tribunal was right in holding that there was
nothing wrong on the part of the Assessing Officer in valuing the
closing stock at cost instead of market price as on the date of
dissolution of the firm.
The Commissioner had erred in setting aside the assessment
order, in the light of the decision of the Supreme Court in the
case of A.L.A. Firm [1991] 189 ITR 285 (SC)

7. CIT v. Surendra Kumar Gupta [2004] 270 ITR 325 (All)
Firm was consisting of two partners. Assets of the firm were taken
over by one partner on dissolution of firm and consideration was
paid to other partner.
There was no transfer of capital assets.
Capital gains tax cannot be levied.

8. Apsara Co-op. Hsg. Society Ltd. 204 ITE 662 (Cal. )
Since the Society has constructed additional area on the existing
building and allotted to the existing member by taking certain
construction deposit and certain donation to the Common
Amenity Fund on the principles of mutuality, there will not be tax
liability.

9. CIT v. Smt. Shantavva [2004] 267 ITR 67 (Kar)
Section 45(5)(b) of the Act, shifts the date of “income” from the
date of acquisition and from the date of determination of
compensation by a court / Tribunal / authority, to the date of
receipt of the compensation in pursuance of an enhancement by
the court / Tribunal / authority.
Two conditions have to be satisfied for applicability of s. 45(5)(b) :
There should be enhancement of compensation by a court /
Tribunal / authority ;
The assessee should receive payment of such enhanced
compensation.
When the award of the reference court enhancing the
compensation is stayed and an interim payment is ordered as
condition for such stay or otherwise and is paid pending final
decision, neither of the two conditions are satisfied.
The amount received in pursuance of an interim order by
furnishing security, not being an amount payable in pursuance of
an enforceable order or decree increasing the compensation,
cannot be considered as receipt of enhanced compensation.

10. Cost of acquisition – where not ascertainable !
CIT v. D.P. Sandu Bros. Chembur (P) Ltd. [2005] 273 ITR 1 (SC)
& Cadell Weaving Mill Co. (P) Ltd. v. CIT [2005] 273 ITR 1 (SC)
Where no cost of acquisition can be computed, such transaction
cannot be brought to tax under “Income from other sources”
The amendment to section 55(2) took effect from April 1, 1995,
and applied in relation to the A.Y. 1995-96 and subsequent years.

But, till that amendment in 1995, the law was that if the cost of
acquisition could not in fact be determined, the transfer of such
capital assets would not attract capital gains tax.

11. CIT v. Travancore Rubber & Tea Co. Ltd.(SC)
Where on a previous occasion there were negotiations for a
transfer, and if ‘advance or other money’ had been received and
retained by the assessee, such amounts will in effect be added to
the value of the capital asset impacting the ultimate assessment
of capital gains.

12. Sum received for surrender of leasehold right is not
ascertainable.
CIT v. Gotan Lime Stone Khanij Udhyog [2004] 269 ITR 399
(Raj)
The amount is not to be taxed as capital gain.
In view of the fact that the computation provisions u/s 48 of the
Act could not be applied to such transaction for want of
ascertainable cost of acquisition on the date of acquisition capital
gains did not arise out of such transfer, and since the case of the
assessee was prior to the amendment in section 55(2) of the Act
which came into force in 1995 and which did not operate
retrospectively, it was not liable to be included under the total
income as capital gain for the assessment year 1988-89.

13. Amount paid to father of assessee in terms of earlier
compromise agreement
Ashok Soi v. CIT [2005] 273 ITR 165 (Del)
The assessee was the absolute owner of the property. It was he
who threw the property into the Hindu undivided family and
therefore when the property was transferred consequent upon a
partition suit by the owners, any amount paid to settle the claims
of his father who had no right, title or interest in the property
could not be regarded as “expenditure incurred wholly or
exclusively in connection with such transfer”.

The payment could not be regarded as payment for any
relinquished right and would not be covered by section 48(i). The
amount paid was not deductible.

14. CIT v. Trikamlal 168 ITR 733,
& CIT v. Ashok Kumar 204 ITR 16
Prior to insertion of section 49(1)(iv), when a member’s individual
property was thrown into joint family hotchpot, cost of acquisition
to the family was held to be nil .

15. CIT v. Smt. R.R. Sood (1986) 161 ITR 92 (Bom.)
Where a capital asset is a plot of land purchased from a third
party, period of holding to determine whether it is a short-term or
long-term capital asset will be counted from date of execution of
the conveyance deed and not from the date of agreement to
purchase the said plot of land.

16. Shyamala Pictures (P.) Ltd. v. CIT (1983) 142 ITR 115 (Mad.)
Where originally land was purchased as capital asset and it
was only later on that land was converted into plots and sold
for purpose of paying of debts of assessee, resultant surplus
would be assessable as capital gains and not as income
from adventure in nature of trade.

17.CIT v. D.P. Sandu Bros. Chembur (P) Ltd. [2005] 273 ITR 1(SC)
& Cadell Weaving Mill Co. (P) Ltd. v. CIT [2005] 273 ITR 1 (SC)
The cost of acquisition of leasehold rights can be determined.
However, in view of the stand taken by the Department before the
High Court that the cost of acquisition of the tenancy right was
incapable of being ascertained, the decision of the High Court
had to be upheld.

18. Traders & Miners Ltd. v. CIT (1955) 27 ITR 341 (Pat.)
Lease is transfer of capital asset.

19. CIT v. Smt. Khorshed M. Mistry ( 1978) 113 ITR 850 (Bom.)
If assessee has no right to receive consideration in accounting
year, no capital gain arises.

20. T.V. Sundaram Iyengar & Sons Ltd. v. CIT (1959) 37 ITR 26
(Mad.)
Capital gains tax is payable in year in which assessee has acquired a right to receive profits, and its actual receipt in that year is not necessary.

21. Alapati Venkataramiah v. CIT (1965) 57 ITR 185 (SC)
Entries in books of account are irrelevant for determining date of transfer.

22. Section 45 cannot be applied to deemed profits or gains.
K. P. Verghese v. ITO (1970) 77 iTR 719 (Ker.)
The words ‘any profits or gains arising from the transfer of a capital asset’ used in section 45 can mean, only what they plainly state. They cannot mean not only any such profits or gains, but also any profits or gains deemed to arise from such transfer.
23. Madhya Pradesh Financial Corporation v. CIT (1981)
132 ITR 884 (MP)
Profit on surrender of Government bonds is taxable as capital
gains.

24. CIT v. Mithlesh Kumari (1973) 92 ITR 9 ( Delhi )
Ground rent is not part of actual cost of asset to assessee.

25. B.B. Sarkar v. CIT (1981) 132 ITR 150 (Cal.)
Where assessee spent capital gains partly for purchase of
another house and partly for further construction on it, he would
still be entitled to exemption under section 54.

26. Delhi Safe Deposits Co. v. CIT [2004] 269 ITR 66 (Del)
On dissolution of firm, the assets obtained on dissolution by
partner who had advanced money to firm, were sold. The court
decreed the suit as one for dissolution of firm. The cost of
acquisition of assets by firm was to be treated as cost of assets.

27. Mrs. Alpana Chinai v. ITO [2004] 269 ITR 123 (Bom)
Condition precedent for application of section 52(2)
It was held that actual understatement of consideration must be
there.
Burden of proof of such actual understatement is on Revenue.
Revenue established that fair market value of shares sold by the
assessee was at more than Rs. 20 per share as against full value
of Re. 1 declared by the assessee. Revenue also established
that the assessee received additional consideration.
Application of section 52(2) was held justified.

28. CIT v. Madan Parnami Family Trust [2004] 269 ITR 16 (Raj) 8
Section 53 applies only to individuals and are not applicable to
association of persons.
In respect of Trust assessed as AOP, exemption u/s 53 is not
available though income is ultimately received by individual
beneficiaries.

29. P.K. Lahiri v. CIT [2005] 275 ITR 17 (All)
The assessee in the present case claimed that the land sold was
appurtenant to the old residential house.
The Assessing Officer considered the significance of the land
appurtenant thereto as defined in section 5(1)(ivc) of the Wealth-
tax Act.

Though we are concerned with the income-tax matters yet in the
absence of a corresponding definition in the Income-tax Act, we
are of the view that it would be permissible to adopt the same
connotation and significance of the word ‘appurtenant to’ as spelt
out in the Wealth-tax Act.

30. P.K. Lahiri v. CIT [2005] 275 ITR 17 (All)
A perusal of section 54 of the Income-tax Act, 1961, makes it
clear that the exemption under the provision is available only
where a building or land appurtenant thereto is sold and within
two years immediately preceding the date on which the transfer
took place, was being used by the assessee or a parent of his
mainly for the purposes of his own or the parent’s own residence
and the assessee has within a period of one year before or after
that date purchased, or has within a period of two years after the
date constructed, a house property for the purpose of his own
residence.

31. Meaning of “appurtenant” – land and building should belong
to same person.
P.K. Lahiri v. CIT [2005] 275 ITR 17 (All)
Land appurtenant to the building implies that the ownership of the
building and the land appurtenant should be of the same person.
If the building is owned by one person and the land is owned by
another person then it will be the case of land adjoining the
building and by no stretch of imagination can it be called land
appurtenant to the said building.

32. Effect of amendment to section 55(2)
Amendment has only prospective effect.
Clause (a) of sub-section (2) of section 55 of the Income-tax Act,
1961, was amended by the Finance Act, 2001. The amended

provisions of clause (a) of sub-section (2) of section 55 provided
that for the purposes of sections 48 and 49 “cost of acquisition” in
relation to a capital asset, being goodwill of a business or a trade
mark or brand name associated with a business, or a right to
manufacture, produce or process any article or thing or right to
carry on any business, tenancy rights, stage carriage permits or
loom hours :

(i) in the case of acquisition of such asset by the assessee by
purchase from a previous owner, means the amount of the
purchase price ; and
(ii) in any other case not being a case falling under sub-clauses (i) to
(iv)of sub-section (1) of section 49 shall be taken to be nil.

33. Vysali Chemotherapeutics (P) Ltd. v. CIT [2004] 269 ITR 362
(Ker)
This amendment of section 55 clause(2) has only prospective
effect from April 1, 2002.

34. CIT v. Gotan Lime Stone Khanij Udhyog [2004] 269 ITR 399
(Raj) .
Amendment in section 55(2) is not retrospective.

35. Namita Sarkar v. CIT [2005] 275 ITR 590 (Cal)
For computation of capital gains, the report of valuer was not
conclusive. Income-tax authorities can reject report and get
property valued or value it. The Tribunal rejected valuer’s report
but did not follow principles of valuation.
It was held that valuer’s report which was on record was to be
adopted.

36. Prakash Chand v. Deputy CIT [2004] 269 ITR 260 (MP)
The Assessing Officer has no jurisdiction to take recourse to the
provisions of sections 131(1), 133(6) and 142(2) of the Income-
tax Act, 1961, for obtaining any report of the Valuation Officer
except in a case of reference made to the Valuation Officer under
section 55A and that too in respect of the cases enumerated
therein for making a reference.

37. Shah v. Matain 209 ITR 568
the report under section 55A can be used as piece of evidence
which is rebuttable.