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2020 (5) TMI 351 - AT - Income TaxReopening of assessment - Capital gain computation - invoking Section 50C - full value consideration being determined by the DVO - whether valuation adopted by the stamp valuation authority cannot by itself be made the basis of re-opening of assessment? - HELD THAT:- Assessee has brought on record the material which distinguishes the case from the normal transfer as property was occupied by the tenants at a meager rent and also dispute is pending in the Court. Certainly adverse factors affect the fair market value and no buyer would like to purchase the property if the vacant and undisputed possession is not handed over to him at the time of transfer - when the property is attached with various factors adversely affecting the value/ price of the property, the fair market value determined by the DVO by adopting the DLC Rates and giving only 15% discount on account of distressed sale is not justified. DVO has not cited any comparable instances of a similarly situated property occupied by the tenants. It is undisputed fact that the assessee cannot fetch a prevailing market price which is in the area. Accordingly, in the facts and circumstances of the case, we find that sale consideration as agreed between the parties and reflected in the sale deed is representing correct fair market price of the property in question. Hence, the addition made by the AO and sustained by the ld. CIT(A) on this account is deleted. Cost of acquisition as well cost of construction - CIT(A) rejected the claim of the assessee on the ground that the assessee has not filed any evidence to substantiate her claim that ground floor of the property was constructed in the year 1984-85 - HELD THAT:- AO as well as the DVO has accepted the construction of the ground floor in the financial year 1984-85 and first floor in financial year 2002-03. Therefore, there is no basis for doubting the year of construction as claimed by the assessee. We are of the considered view that average indexed cost taken by the assessee as well as by the AO would be a just and reasonable amount of cost of construction. Accordingly, the average of two amounts comes to ₹ 5,68,056/- and the same shall be allowed as deduction on account of indexed cost of construction. The AO is directed to recompute the Long Term Capital Gain by considering the indexed cost of construction as indicated above.
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