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i) That no valuation report was filed along with original return, whereas the revised return filed u/s.139(5) along with valuation report is not a valid revised return in terms of section 139(5) of the Act.

ii) That in terms of section 55A (b)(ii) of the Act, the AO has option to refer to the matter to DVO and AO was correct in referring the same because there is no valuation report by the registered valuer furnished along with the original return of income.

4. The first aspect in respect to revision of assessment order argued by Ld. Counsel is that the revised return filed by the assessee is a valid revised return. We find that original return of 4 ITA 1234/K/2009, ITA 1099/K/2008 & CO 85/K/2008 Mugneeram Bangur & Co. A.Y.04-05 income was filed on 01.11.2004 which was within the due date as per section 139(1) of the Act, and this was processed u/s. 143(1) of the Act on 29.03.2006 and further this was revised on 30.03.2006 in terms of section 139(5) of the Act. The CIT as well as CIT, DR, both contended that this revised return is not in terms of section 139(5) of the Act as this was filed after completion of assessment u/s. 143(1) of the Act and moreover, the assessee has declared same loss and there is no omission on the part of the assessee which he wants to remove by filing revised return of income. Hence, CIT, DR Shri Niraj Kumar contended that the revised return is not a valid return in the eyes of law. The Ld. Counsel Shri Naveen Verma argued that processing u/s 143(1) of the Act is no assessment as held by many High Courts and assessee has substantially changed its returned loss, returned originally higher loss due to inadvertence. He also brought to our notice that assessment proceedings by issuing notice u/s 143(2) of the Act was started before processing u/s 143(1) of the Act and notice u/s 143(2) was dated 17.08.2005. He narrated the fact the assessee filed original return disclosing Long Term Capital Loss of Rs.1,20,25,795/- but subsequently, in the revised return Long Term Capital Loss was reduced at Rs.6,81,683/- as computed on the basis of fair market value as on 01.04.1981 as determined by the registered valuer and copy of the same was filed with the revised return before the AO. Hence, it cannot be said that the revised return is not a valid revised return. And once, revised return is a valid return, subsequent proceedings i.e. reference to DVO for computing fair market value of the assets sold as on 01.04.1981 is not valid as per law and as per the decision of Hon'ble High Courts.

6 ITA 1234/K/2009, ITA 1099/K/2008 & CO 85/K/2008 Mugneeram Bangur & Co. A.Y.04-05 It means once action u/s. 143(2) of the Act is initiated, no proceedings u/s. 143(1)(a) of the Act or 154 of the Act can be taken up till 143(3) of the Act is passed.

6. In the present case before us also, the facts are very clear that for framing assessment u/s. 143(3), the AO has already issued notice u/s. 143(2) of the Act and thereafter, acted on the return of income and processed the same u/s. 143(1) of the Act. In view of the above judgments, particularly of Hon'ble Apex Court in the case of Gujarat Electricity Board (supra), the intimation issued by the AO in this case is not a valid intimation and hence, revise return filed by assessee is a valid revised return. For this, we have another reason that the assessee while filing revised return has substantially changed/reduced its losses from Rs.1,20,25,795/- to Rs.6,81,683/- on the basis of registered valuer's report, which was filed along with the revised return of income. Hence, we treat the revised return of income filed by assessee as a valid revised return filed within the prescribed time of section 139(5) of the Act.

7. Now, we have hold the revised return filed by assessee as a valid revised return, what will be the consequence of reference to DVO u/s. 55A of the Act by revenue. The brief facts relating to this issue are that the assessee filed its revised return of income showed the cost of this property at Rs.96.78 lacs. For the purpose of computation of capital gains, the AO determined the value at Rs.80 lacs in original assessment and that was upheld by CIT(A). The CIT, however, initiated proceedings u/s.263 of the Act for revising the order of AO in order to reduce the cost of the property as on 01.04.1981. The assessee challenged the very reference to valuation for estimating fair market value as on 01.04.1981. Ld. Counsel for the assessee before us referred to the provisions as contained in section 55A of the Act and stated that section 55A of the Act contains two clauses, clause (a) and clause (b). According to him, under clause (a) reference can be made for determination of fair market value, if in the opinion of the Assessing Officer, the fair market value claimed by the assessee, on the basis of the report of the valuer is less than the fair market value. In all other cases i.e. in cases where the estimate of fair market value is not accompanied by the report of a Registered Valuer then only reference could be made under clause (b) of Section 55A of the Act. He further explained that Clause (a) of Section 55A of the Act is not applicable for determining cost of acquisition and clause (b) is applicable only when the estimate of Fair Market Value is not accompanied by the report of a Registered Valuer. He narrated the facts that in the present case, since the assessee has acquired the capital asset before 01-04-1981, it choose to opt for the fair market value as on 01-04-1981 as the Cost of Acquisition in accordance with the provisions of Sub-section (2) of Section 55 of 7 ITA 1234/K/2009, ITA 1099/K/2008 & CO 85/K/2008 Mugneeram Bangur & Co. A.Y.04-05 the Act. Further, the estimate of fair market value as on 01-04-1981 accompanied by the report of a Registered Valuer was filed with the revised return of income. Reference under clause (a) of Section 55A of the Act can only be made if fair market value claimed by the assessee is lower than the actual fair market value in the opinion of the Assessing Officer. But, in the present case, since the assessee has adopted fair market value as the cost of acquisition, taking a lower fair market value would only lead to increase in the amount of Capital Gains. Thus, even if the fair market value adopted by the assessee is lower than the actual fair market value, reference under clause (a) of Section 55 of the Act would not have any meaning. In such cases, reference can only be made under sub clause (ii) of clause (b) of Section 55A of the Act, which is possible only if the estimate of fair market value is not supported by the report of an approved valuer. The fact that reference for the purpose of determining cost of acquisition cannot be made uncle clause (a) or clause (b)(i) is also supported by the departmental Circular no 96 dated 25.11.1972 as reported in (1973) 91 ITR 1 (St.) 17. The Ld. Counsel for the assessee also referred to the decision of Hon'ble Gujarat High Court in the case of Hiaben Jayantilal Shah Vs. ITO & Anr. (2009) 310 ITR 31 (Guj).