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2015 (7) TMI 78 - AT - Income TaxValuation of the property - CIT(A) has upheld the valuation made by Registered Valuer and discarded the DVO Report relied by the AO - Held that:- CIT(A) rightly repells the said reasoning of the DVO and opined that the valuation by the Registered Valuer was not made considering the structure as new one and held that it was an incorrect observation of DVO. The DVO further states in his letter that the cost of construction as on today i.e. in the year 2006 varied between ₹ 550 to ₹ 650 for a load bearing G+1 structure and how the rate could be ₹ 350/- pr sq. ft. as on 1.4.81 for an old building which was built in and around 1940. The Ld CIT(A) takes notes that the DVO's finding that the cost of construction in the year 2006 was between 550 to 650 is not supported with any evidence. The Ld CIT(A) rightly observes that there is a basic difference between determining the cost of construction and valuing the fair market value of any property and the fair market value is always higher than the cost of construction. Ld CIT(A) takes into account that in any case the salvage value of the structure in comparison to the overall value of the property was much less and negligible and even if there is some variation, it would not substantially reduce the value of the entire property as a whole. Finally the DVO finds fault that the Registered Valuer had not given any sale instances for the land and has only stated that the rates available from the registrar were 4-5 times lower as compared to the actual sale rate and so his finding could not be accepted as FMV since it had to be supported by the evidence. Ld CIT(A) agrees to the said observation of the DVO but rightly observes that even the sale instances adopted by him (DVO) also did not serve any purpose for the same reason ; and therefore the valuation of the property was just a matter of estimate of one expert versus another expert. We find considerable force in the observation of the Ld. CIT(A) that from the discussion in the foregoing para it would be clear that the basic purpose for which the case was remanded by the ITAT to the file of the Assessing Officer remained unfulfilled. The DVO ought to have controverted the report of the Registered Valuer's report, so it cannot be acted upon and the failure of the DVO as stated above, give us no other alternative but to uphold the valuation of the registered valuer for the purpose of computation of capital gain. The Ld CIT(A) has rightly taken note of the fact that Registered valuer report is based on the average of two different methods of valuation and DVO failed to controvert the said method nor could clarify as to his selection of single method was better. In the facts and circumstances we find that registered valuer report more acceptable, since the estimate of the DVO is based only on one method of valuation, where as we find that the Registered Valuer’s estimate was based on two different methods; and moreover the fact remains that he could physically examine the property, so it is more acceptable being nearer to correct estimate. - Decided against revenue.
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