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2024 (1) TMI 165 - ITAT DELHITaxability of long term capital gain on sale of immovable property - difference in value determined by the SVA and DVO - CIT(A) adopting the value of the property as per section 50C of the Act by taking into account the date of registration of sale instead of adopting the value of the said property as it existed at the time of finalization of deal for sale - what should be the fair market value (FMV) of the disputed property on the date of execution of sale deed on 12/01/2015? HELD THAT:- It is a fact on record that in course of assessment proceedings, the Assessing Officer had made a reference to the DVO for determining the FMV of the property. Since, the report of the DVO was not received in time, the Assessing Officer had proceeded to complete the assessment by adopting value determined by the SVA[Stamp Valuation Authority] as deemed sale consideration. However, before the first Appellate Authority DVO report was available. Additionally, the assessee had also furnished a valuation report of the Govt. Registered Valuer. As very same property, the value determined by the SVA under no circumstances reflects the FMV as there is wide variation of more than Rs. 2,00,00,000/- between the value determined by SVA and the DVO. It is further observed that the Govt. Registered Valuer has determined the value of the property at Rs. 5,36,00,000/-. Valuation of property involves some kind of guess work and estimation and there cannot be any consensus in the opinion of two valuers. This fact is very much evident from three different FMVs determined by three valuers. Assessee has brought on record the mitigating circumstances resulting in sale of the property for the actual sale consideration of Rs. 5,50,00,000/-. We have further noted that in the same locality the assessee had two properties, one was sold at Rs. 32,258/- per sq. mtr. and disputed property at Rs. 45,156/- per sqm. The aforesaid facts show that the rate of property even in the same locality differs depending upon locational advantage and other factors. It is also revealed that though the Assessing Officer has brought to the notice of DVO certain sale instances in the same locality at higher price, however, DVO has not accepted them. These facts clearly establish that there can be difference in valuation of property at the same locality. Thus, considering the fact that difference in FMV as per actual sale consideration received by the assessee and DVO is much lesser in comparison to the difference in value as per SVA and DVO, in our view, deeming provisions of section 50C cannot be pressed into action. More so, when the registered valuer has valued the same property at Rs. 5,36,00,000/-. Thus, considering the overall facts and circumstances of the case, we hold that the addition sustained by Ld. First Appellate Authority deserves to be deleted. Assessee appeal allowed.
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