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2023 (9) TMI 877 - AT - Income TaxCapital gain computation - Valuation of Capital Asset as made by valuation officer - property under consideration is in dispute - property was jointly owned by the assessee and his relative - assessee submitted that the title of the property was not clear and marketable, and hence the property has been sold below the “Jantri rate” - HELD THAT:- We observe that in the instant facts, evidently the DVO did not take into consideration the fact that the title of the property was under dispute and the matter was pending before a civil suit at the time when the assessee and his relative jointly sold the property. Further, we observe that the counsel for the assessee has placed evidence on record before us that the civil suit with respect to the title of properties is still going on even today as on the date of hearing before. We further observe in the case of Whiterose Holdings India Pvt. Ltd. [2019 (5) TMI 1506 - ITAT MUMBAI] has held that where in respect of a certain property there are disputes and litigations going on and the property is in the possession of the tenant, the property cannot be valued on the basis of development method by considering that developmental potential and built up area in the nearby locality. ITAT Hyderabad in the case of D. Anitha [2015 (4) TMI 723 - ITAT HYDERABAD] held that where property held by the assessee was encumbered and thus the assessee was not the absolute owner of the property, while computing the capital gains arising from transfer of such property, value of property taken for the purpose of payment of stamp duty could not be adopted as sale consideration by applying provisions of section 50C of the Act. Therefore, in the light of the facts of the instant case where apparently the DVO has not considered the on-going dispute as to the title of property at the time of sale of property and in the light of observations made by Hyderabad Tribunal on this aspect, in the interest of justice, the matter is being restored to the file of ld. CIT(A) to take appropriate steps for determining the sale consideration as per law taking into consideration the fact that market value of adjacent properties cannot be taken as the benchmark to determine the sale consideration of a property, the title of which itself is under dispute. Accordingly, the matter is being restored to the file of ld. CIT(A) with the above observations.
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