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2019 (5) TMI 1506 - AT - Income TaxComputation of capital gain on sale of property - valuation - disputed property in the possession of tenants - CIT(A) directed the AO to adopt market value the property - AO did not receive the valuation report from the DVO till the date of order and the value of the property was ascertained on the basis of ready reckoner rates - whether Assessing Officer was justified in referring the matter to the Valuation officer u/s 50C? - HELD THAT:- the development of the said property has not even started till date due to the litigations going on. - the director of the company Shri. Jaikishan Awtani have not got any convenience of the property in his favour till date. The possession of the property still with the tenants and the assessee. The purhcaser director having no authority to collect the rent from the tenants. In other words even after elapse of 23 years, the status of the property is same. Thus in such a scenario the valuation done by the valuation officer on the basis of development method by considering the developmental potential and by considering the built up area rate analyzed /sale and ready flat available in the nearby locality was totally wrong and against the principle of method of valuation of the immovable properties. We are quite convince with the arguments of Ld. AR that the said property which is occupied by the tenants should be valued on the basis of capitalization rental method and not any other method. See SIR MOHD. YUSUF TRUST VERSUS ACIT-18 (1) , MUMBAI [2019 (3) TMI 1455 - ITAT MUMBAI] Thus we hold that the property in question cannot be valued as has been directed by the ld CIT in view of the litigations underway and also the fact that the property is in the possession of the tenants. Accordingly, we set aside the order of CIT(A) and direct the AO delete the disallowances. - Appeal of the assessee is allowed.
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