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2014 (3) TMI 1156 - ITAT VISAKHAPATNAMCapital gain computation - Value estimated by the DVO - fair market value of the property - HELD THAT:- From the perusal of the compromise decree before the Lok Adalat, it is evident that there are legal disputes between the parties consequent to a registered 50 year lease deed executed between the parties in July, 1971. On a consideration of all the factors, the Lok Adalat has issued award determining the total consideration of sale at ₹ 2,62,35,000 on 20th March, 2005. On the facts and circumstances of this case, in our view, weight has to be given to this factor in determining the fair market value as on the date of sale. Admittedly, the compromise decree could not be executed because of the delay in obtaining ULC permission. The assessee had no other alternate but to execute the sale deed in view of the award given by the Lok Adalat. The sale deed executed refers to the civil litigation filed before the Principal Senior Civil Judge of Visakhapatnam vide O.S.No.1279/2004 and the Award of the Lok Adalat passed on 25th day of March, 2005 as a reason for executing the sale deed. The purchase consideration was fixed at ₹ 4,79,00,000 in place of ₹ 2,62,35,000 as awarded by the Lok Adalat. This figure of consideration as arrived at between the parties after long legal battles and negotiations. Under these circumstances, we are of the considered opinion that the figure mentioned in the sale deed is the fair market value on the facts and circumstances of the case. The report given by the DVO is nothing but an opinion, which when weighed against the actual fact of consideration paid for the purchase of the property, cannot be accepted on the fair market value of the property. It is a case where the facts have to be weighed against the opinions. Neither the AO nor the CIT(A) have based on themselves on any evidences or comparable documents or logical reasoning to come to a conclusion that the negotiated value of the property in question between the parties is not the fair market value of the property. Coming the base rate analysis given by the DVO in his report, we are unable to find logic in such analysis The land rates by sq.yards various between ₹ 1602 and ₹ 36,291. Such a variation demonstrates that the valuation report by the DVO is not correct and has to be seen as not given the appropriate fair market value. As the factual finding is that the fair market value in this case is that the negotiated value between the parties, which was a result of prolonged litigation, supported award by a legal authority, which ultimately culminated into a sale deed, and as we have found that the value by the DVO and the value arrived at by the learned CIT(A) are both opinions, we are of the considered opinion that the fair market value of the property has to be taken. We uphold the contention of the assessee and allow the appeals.
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