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2024 (2) TMI 544 - AT - Income TaxCapital gain computation on the transfer of property - AO mechanically adopted the stamp duty value/segment rate as the deemed sale consideration - assessee failed to participate in the assessment proceedings - non-reference to the Valuation Officer for determination of FMV - determining FMV of the property as on the date of transfer - HELD THAT:- Failure on the part of the assessee to comply with the notices issued by the A.O and, thus, participate in the assessment proceedings was due to compelling circumstances prevailing at the relevant point of time i.e., death of his father on 06.08.2018. A.O while adopting the stamp duty value of Rs. 31,55,100/- as the deemed sale consideration for computing capital gain on the transfer of the aforesaid property which was claimed by the assessee to have been sold for Rs. 3.50 lacs, should not have mechanically adopted the stamp duty value/segment rate as the deemed sale consideration, and in all fairness, ought to have referred the matter to the District Valuation Officer (DVO) for determining of the FMV of the property as on the date of transfer. Thus as there were justifiable reasons for the assessee in not participating in the course of the proceedings before the A.O, as a result whereof, there was no occasion for him to have sought a reference to the DVO for determination of FMV of the property under consideration. The assessee had in the facts/submissions filed before the CIT(Appeals) categorically stated that as property under consideration was wall locked land located in between constructed buildings belonging to third parties with no independent access/approach road, therefore, for the said reason the said property was sold at a distress value of Rs. 3.50 lacs. Assessee has specifically brought to the notice of the CIT(Appeals) the locational disadvantages of his property, therefore the latter in exercise of powers vested with him which are co-terminus with that of the A.O ought to have considered the said material aspect and should have called for a remand report with a direction to the A.O to make a reference to the Valuation Cell for determining the FMV of the aforesaid property in question. Thus the matter in all fairness requires to be restored to the file of the A.O who is directed to make a reference to the Valuation Officer for determination of FMV of the aforementioned property as on the date of transfer - We are also unable to persuade to concur with the adoption of the cost of acquisition of the property under consideration at Rs. Nil by the A.O while calculating STCG on the sale of the same. AO is also directed to verify the aforesaid claim of the assessee qua the cost of acquisition of the aforesaid property under consideration, and allow his claim for deduction of indexed cost of acquisition if the same is found in order.
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