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Valuation of Immovable property (Taxation)

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This query is : Resolved


Author : Anonymous

Posted On 16 January 2010 at 18:10

1. District Valuation Officer valuing the property of plinth area basis on CPWD rates while proper books of accounts are maintained, Income Tax returns filed. Copy of all the details and records required by the District valuation officer for the prupose of his valuation were duly filed before his valuation procedures, which were not considered, valuation was done on plinth area method on CPWD rates while PWD rate is there. Valuation by registered valuer on PWD rate was submitted before the Assessing Authority which was not at all considered. Errors and flaws in the valuation report submitted by the DVO was pointed out which was not at all considered.
(A) Whether CPWD rate can be taken while PWD rate is prevails?
(B) Whether the Assessing Authority can complete the assessment without getting proper clarifications from the DVO for the errors and flaws in his valuation report was brought in notice, only because the case is getting time barred?
(C) Whether the value for which the property is insured can be taken as cost of construction for assessment purpose ignoring the books of accounts maintained and valuation by the Registered Valuer?





Expert : soumitra basu

Posted On 16 January 2010 at 22:48

(A) It has been well settled by Tribunals/High Court that if the assessee has valued it property on PWD basis by an approved valuer the same should be accepted by the A.O.
(b) The assessing officer has to get proper clarification from the DVO and his comment in this respect should be forwarded to the assessee for rebut the same. After that only the assessment can be made.
(c) If the books of accounts are proper and supported by vouchers and the AO can not detect any defect in it, it should be accepted in full.



Author : Anonymous

Posted On 18 January 2010 at 16:56

(A) Kindly provide details of few judgements in the Tribunal/High Court that value of the property on PWD basis by approved valuer should be accepted by the AO.
(B) Whether any circular or case law supporting this?



Expert : Vineet

Posted On 19 January 2010 at 15:03

1. I also request Mr Basu to please provide the case laws prefering PWD rates over CPWD rates. The DVO are generally officers drawn from CPWD and in any case they are central government employees, they are generally guided by CPWD rates. However, these rates are not sacrosant and rebuttable if other reliable figures such as PWD or any local authority, collector, registrar rates are available to the benefit of assessee. You should challenge the valuation by DVO on this ground and if your contentions are correct, you would certainly get relief.

2. Objections can be raised before the DVO himself as such proceedings are quasi judicial in nature and orders of DVO are appellable. The orders of DVO are binding on AO in so far as they are relevant to property referred to DVO for valuation.

3. The AO may adopt insured value of the property for Wealth Tax purposes. However, in Income Tax proceedings entries in boooks of accounts are to be rejected with cogent reasoning to adopt a higher value of investment in the property.


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