Reference to Valuation Officer
Introduction
An Assessing Officer (AO) may refer a capital asset’s valuation to a Valuation Officer to ascertain its fair market value (FMV). This referral is warranted when the declared value appears lower than the actual FMV or the asset’s nature necessitates expert evaluation.
Key Provisions
- Purpose of Reference:
To determine the FMV of a capital asset for computing capital gains. The AO must base the decision on material evidence, the asset’s nature, or relevant circumstances. - Situations for Reference:
- Value Estimated by a Registered Valuer:
The Assessing Officer may refer the asset’s valuation to a Valuation Officer if there is a variance between the registered valuer’s estimate and the fair market value. - Value Claimed by the Assessee:
Referral occurs when the AO believes the FMV exceeds the claimed value by:- 15%of the claimed value by assessee; or
- 25,000, whichever is less.
- Special Nature of Asset:
When the asset’s unique nature or circumstances necessitate expert valuation.