Section 55A

Section 55A — the law in short

What the courts have decided on section 55A, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Dilip N. Shroff v JCIT Supreme CourtHelps taxpayerPartly overruled — read this first
  Is a valuation you put on an asset 'inaccurate particulars' if the officer disagrees with it?
  No. 'Inaccurate' connotes a deliberate act or omission and 'particulars' means the details disclosed in the return. Furnishing an assessment or valuation is not by itself inaccurate particulars. But read the editor's note — this case was later overruled in part.
• CIT v Gauranginiben S. Shodhan High CourtHelps taxpayer
  The Assessing Officer sent my property to the Departmental Valuation Officer because he thought my sale price and my 1981 cost were both wrong — was he entitled to?
  No, on these facts. The Gujarat High Court held that a section 55A reference to ascertain fair market value on the date of sale is redundant for computing capital gains, because section 48 works on the full value of consideration received, not on market value. As for the 1981 value, where the assessee has supported it with a registered valuer's estimate the reference can only be made under clause (a), and clause (a) as it then stood required the officer to think the claimed value was less than fair market value — not more. The Revenue's appeals were dismissed.
• CIT v Daulal Mohta (HUF) High CourtHelps taxpayerSuperseded by amendment
  I used a registered valuer's FMV as my cost of acquisition. Can the AO send it to the DVO?
  Not on the text of s.55A as it then stood. A reference to the DVO could be made only where the value shown by the assessee was less than fair market value, so where the registered valuer's figure was the higher one the reference was without jurisdiction and the DVO's lower value could not displace it.
• ITO v Ketaben Janakbhai Patel ITATHelps taxpayer
  The Assessing Officer has adopted the jantri value for my land sale because a co-owner's assessment used it, even though I objected that the title was defective. Must he refer the valuation to the DVO instead?
  Yes. The Ahmedabad Tribunal held that once the assessee objects that the stamp duty value exceeds the fair market value, the Assessing Officer is duty bound to refer the valuation to the Departmental Valuation Officer under section 50C(2). He cannot adopt the jantri value simply because the officer assessing a co-owner did so. Here the assessee had raised serious objections about defective and disputed title, and the officer knew of them. The Commissioner (Appeals) was right to delete the addition made by substituting the jantri value of Rs 4,98,83,550 for the DVO's earlier valuation of Rs 3,17,86,000, and the Revenue's appeal was dismissed.
• Naina Saluja v DCIT ITATHelps taxpayerValidity unconfirmed
  The officer sent my property to the Valuation Officer. Does that give him extra time to finish the assessment?
  No, not where the reference is under s.50C. The extension in clause (iv) of Explanation 1 to s.153 is given only where the Assessing Officer makes a reference to the Valuation Officer under s.142A(1); a reference under s.50C or s.55A does not stop the clock. The assessment, completed after the ordinary period had run out, was quashed as barred by limitation.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.