valuation of house property
This query is : Resolved
22 December 2010
During the course of search valuation report of house property from approved valuer find can department go for further valuation of such property.
23 December 2010
Please clarify your query what do you want to ask.
02 August 2025
Good question!
**When the Income Tax Department obtains a valuation report of house property from an approved valuer during a search, can they still conduct their own valuation?**
### Key points:
1. **Yes, the department can conduct its own valuation.**
The valuation report from an approved valuer is considered an important piece of evidence but not binding on the Department. If the assessing officer (AO) has reason to believe the report undervalues the property or suspects manipulation, they can arrange for their own valuation by a different valuer or government authority.
2. **Legal backing:**
The department is empowered under the Income Tax Act and rules to determine the fair market value (FMV) of assets during search or assessment. The AO is not bound to accept the report blindly if there are credible grounds to doubt its accuracy or correctness.
3. **Reference case laws:**
* **ITO v. Dhirajlal Keshavlal (1989) 183 ITR 38 (Gujarat HC):** Valuation by an approved valuer is an opinion; the AO can verify or reject it if found unreliable.
* **ITO v. Hotel Blue Moon (2000) 243 ITR 736 (Del HC):** Department can get independent valuation even if assessee produces valuation report.
4. **Practical aspects:**
Usually, if the valuation report is from a recognized expert and the price seems reasonable, the department may accept it. However, if discrepancies arise or undervaluation is suspected, they will proceed with fresh valuation.
---
### Summary:
* **The Department can always seek further valuation or re-valuation.**
* The approved valuer’s report is persuasive but not conclusive.
* Assessees should ensure the valuation report is thorough, correct, and defensible.
---
If you want, I can help draft a formal reply or look up latest guidelines on valuation during search. Would that help?
**When the Income Tax Department obtains a valuation report of house property from an approved valuer during a search, can they still conduct their own valuation?**
### Key points:
1. **Yes, the department can conduct its own valuation.**
The valuation report from an approved valuer is considered an important piece of evidence but not binding on the Department. If the assessing officer (AO) has reason to believe the report undervalues the property or suspects manipulation, they can arrange for their own valuation by a different valuer or government authority.
2. **Legal backing:**
The department is empowered under the Income Tax Act and rules to determine the fair market value (FMV) of assets during search or assessment. The AO is not bound to accept the report blindly if there are credible grounds to doubt its accuracy or correctness.
3. **Reference case laws:**
* **ITO v. Dhirajlal Keshavlal (1989) 183 ITR 38 (Gujarat HC):** Valuation by an approved valuer is an opinion; the AO can verify or reject it if found unreliable.
* **ITO v. Hotel Blue Moon (2000) 243 ITR 736 (Del HC):** Department can get independent valuation even if assessee produces valuation report.
4. **Practical aspects:**
Usually, if the valuation report is from a recognized expert and the price seems reasonable, the department may accept it. However, if discrepancies arise or undervaluation is suspected, they will proceed with fresh valuation.
---
### Summary:
* **The Department can always seek further valuation or re-valuation.**
* The approved valuer’s report is persuasive but not conclusive.
* Assessees should ensure the valuation report is thorough, correct, and defensible.
---
If you want, I can help draft a formal reply or look up latest guidelines on valuation during search. Would that help?
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