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2021 (2) TMI 1024 - AT - Income TaxCapital gain computation on sale of lands - difference in value determined by DVO and value declared by assessee - CIT(Appeals) directing the AO to substitute the value determined by DVO on reference u/s.50(2) as deemed value of consideration received on sale of land u/s.50C - AO mad addition solely on the basis of difference between the rate adopted by stamp valuation authority solely on the basis of sale consideration shown by the assessee and the value determined by the stamp valuation authority - HELD THAT:- Difference between sale consideration and the value adopted by DVO is merely 9.11%, as it does not exceed 10%, fiction of section 50C of the Act will not came into play, therefore, capital gain will have to be computed with reference to actual sale consideration only. Hence, we direct the A.O. to delete the addition qua plot no.1. Addition with regard to plot no.2 - assessee vehemently submitted there was a 5 feet deep hole in the ground and a drainage next to the land, Slum cluster next to the plot, water of waste drainage was flooded in the said land and during the monsoon season part of the land remains water logged. All those factors are duly mentioned in clause 5 of the agreement to sale and that the market value of the land was less than the market value of surrounded land and was fixed keeping in view of such circumstances and relied upon the decision of Co-ordinate Bench in [2017 (4) TMI 1531 - ITAT AHMEDABAD]4 - Assessee before the ld.CIT(A) categorically pleaded that rate of land was determined on the basis of actual position of considering the various factors as illustrated in clause 5 of agreement to sale dated 29.03.2011. Valuation of DVO has not considered those factors as illustrated in para 5 of agreement to sale deed. Co-ordinate Bench in Shri Vinubhai V.Navadia Vs. DCIT, [2017 (4) TMI 1531 - ITAT AHMEDABAD] while considering the various factors effecting the sale consideration granted 50% reduction in the deemed value of consideration in the basis of DVO Report. As assessee has brought on record that in second plot, there was a 5 feet deep hole in the ground and a drainage next to the land, Slum cluster next to the plot, water of waste drainage was flooded in the said land and during the monsoon season part of the land remains water logged and the market value of was fixed keeping in view of such circumstances. The Ld. CIT(A) has not examined those facts and simply accepted the report of the DVO. The report of the DVO is also based on certain estimation. Thus, keeping in all facts and circumstances of the preset case and the evidence available on record the assessee is allowed 6% of reduction in difference of sale consideration and value determined by the DVO. Therefore, we direct the AO to allow the deduction of 6% of difference on the actual sale consideration and the value determined by the DVO and compute the capital gain accordingly.- Appeal of assessee allowed.
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