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2015 (9) TMI 1560 - AT - Income TaxAdoption of amount of sale consideration - long term capital gain - valuation report of an approved valuer - Held that:- It is an admitted fact that the properties sold by the assessee are tenanted properties having 52 tenants on both the properties and the assessee is not in possession of single square foot of land. At page 5 of the sale deed it has been clearly mentioned that “the entire building and the said property is in vacant and peaceful possession of the party of the first part”. From the sale instances given by the assessee, we find the tenanted property fetches lesser consideration which is apparent from the 4 sale instances given by the DVO. From the various details furnished by the assessee, we find the sq.ft rate of property at survey No.139 was ₹ 19,934/- and selling rate of property situated at survey No.540 was at ₹ 18,100/- whereas the property at survey No.273 which has been sold at ₹ 15,126/- per sq.ft. This shows that a tenanted property fetches lesser rate than a property free from any encumbrance and having vacant possession by the owner. Therefore, we find merit in the arguments of the assessee that when a property having 8 tenants fetches lesser price than a property free from encumbrance, the property having 52 tenants will definitely fetch lesser price than the property having 8 tenants. Therefore, the 4 instances taken by the DVO are not comparable instances. DVO has increased the valuation of the property of comparable instances on account of time gap and locational advantage. So far as the locational advantage is concerned we find all the properties are situated in the heart of the city and therefore benefit of locational advantage cannot be a factor for increasing the value of the property sold by the assessee. So far as the time gap is concerned, we find the DVO has not considered the cost inflation index published by the income tax department. Further the DVO has given reduction @25% on account of factors like size of the property, undivided share and occupation by the tenants etc. on presumption basis. There is no finding by the AO or material in his possession that the assessee has received any extra amount other than what is declared as sale consideration. The purchaser has also not given any evidence or stated before the AO that he has paid more than what is mentioned in the sale deed. Thus considering the objections raised by the assessee from the very beginning, i.e., before the DVO/AO and the CIT(A) that the valuation made by the DVO is not correct, we are of the considered opinion that the value determined by the DVO cannot be accepted. At the same time when the value adopted by the registered valuer appointed by the assessee herself has valued the property at Survey No.1157 & 1158 at ₹ 1,19,77,000/- the contention of the Ld. Counsel for adoption of ₹ 85,34,700/- as sale consideration also cannot be accepted since the registered valuer has considered all aspects as argued by the Ld. Counsel for the assessee. We accordingly hold that while the value of the property at Survey No.1157 & 1158 be held at ₹ 1,19,77,000/-, the value of the property at Survey No.990 be taken at ₹ 17,00,000/- as declared by the assessee. The AO is directed to recompute the capital gain accordingly.
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