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Mahesh Chand Jain Versus Income Tax Officer

2015 (6) TMI 59 - ITAT DELHI

Computation of capital loss - AVO adopted a detailed measurement method instead of rent capitalization method and secondly, the property was sold in distress - AO referred the property to the AVO and adopted the value reported by the AVO for calculation of capital gains rather than adopting the value of stamp valuation Authority and recomputed the long term capital gains resulting in an addition of ₹ 17,73,417/- (AVO'S Valuation of property at ₹ 28,24,100/- minus Index cost of acquis .....

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he present issues in dispute, in accordance with the aforesaid directions of CIT vs. New India Construction Co. after giving adequate opportunity of being heard to the assessee. - Decided in favour of assesse for statistical purposes. - I.T.A.No. 203/DEL/2012 - Dated:- 27-3-2015 - Shri N.K. Saini And Shri H.S. Sidhu JJ. For the Appellant : Sh. Satyam Sethi & Sh.A.T. Panda, Advocates For the Respondent : Sh. P. Dam Kanunjha,Sr. DR. ORDER Per H.S. Sidhu : JM The Assessee has filed the present .....

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assessed at the income ofRs.22,44,570/-. 2. That on the facts and circumstances of the case and in law, the CIT(A) has erred in holding that long term capital gain on sale of plot No.65-B, Roop Nagar Industrial Estate loni (UP) was rightly computed at ₹ 17, 73,417/-. 3. That on the facts and circumstances of the case and in law, the CIT(A) has erred in not appreciating that value determined by the AVO of plot No.65-B, Roop Nagar Industrial Estate loni (UP), which was a tenanted property an .....

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ctive. That the Assessee craves leave to add, alter, amend or vary any of the ground either at or before the hearing of the appeal. 3. The brief facts of the case are that the assessee filed his return of income on 27.09.2008/ declaring a total income of ₹ 4,71,150/-. The case was processed u/s 143(1) and subsequently was selected for scrutiny on the basis of the receipt of AIR information. Thereafter notice u/s 143(2) was issued on 13.08.2009 through speed post. In response to the same th .....

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y was ₹ 38,56,000/-. After taking into consideration the sale value at ₹ 10,25,000/-the assessee in his computation calculated a capital loss at ₹ 25,683/-. Therefore, the Assessing Officer considered the sale value at ₹ 38,56,000/- in concurrence to the provisions laid in section 50C of the IT Act/ 1961. In compliance to the request made by the A.O. vide letter dated 02.08.2010 the Assessing Officer referred the property to the AVO, Meerut vide letter dated 09.08.2010/ u .....

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nd that the AVO adopted a detailed measurement method instead of rent capitalization method and secondly, the property was sold in distress. These objections were reproduced by the A.O. in the assessment order dated 28.12.2010. The objections raised by the assessee were considered and vide letter dated 20.12.2010 the Assessing Officer rejected the same. In the same letter, the A.O. show caused the assessee as to why the proposed valuation of ₹ 28,24,100/- should not be taken as sale consid .....

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ulting in an addition of ₹ 17,73,417/- (AVO'S Valuation of property at ₹ 28,24,100/- minus Index cost of acquisition as given by the assessee) as against ₹ 4,71,150/. 4. Aggrieved by the aforesaid assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide impugned order dated 18.10.2011 has dismissed the appeal of the assessee. 5. Against the order dated 18.10.2011 of the Ld. CIT(A) assessee is in appeal before the Tribunal. 6. Ld. Counsel of the ass .....

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truction Co. (1980) 123 ITR 68 has considered the issue of appropriate method of valuation in case of tenanted property. In this case, transferor sold a first floor of a building situated in Connaught Place which was in the occupation of three tenants for the sum of ₹ 2,20,000/-. The transferee was also given right to effect construction above the first floor. After the sale, the transferee obtained vacant possession for tenant by paying certain amount to each of the tenant and also got th .....

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:- The fair market value of the property on the basis of cost of land and building method would have been relevant if it was self occupied by the transferor and he was in a position to hand over the vacant possession thereof to the transferee. 6.1 Ld. Counsel of the assessee further submitted that the present issue in dispute is covered by the Jurisdictional High Court decision as aforesaid and hence, the present case may be decided on the similar lines. He also submitted that the reason that f .....

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perty is self occupied is against the legal possession because the method has regularly been applied to fully tenanted premises. 7. On the contrary, Ld. DR has relied upon the order of the authorities below and requested that the same may be upheld. 8. We have heard both parties and perused the relevant record available with us especially the orders of the revenue authorities. We find that in this case according to the AIR information/ the assessee sold an immovable property at ₹ 31,32,000 .....

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; 25,683/-. Therefore, the Assessing Officer considered the sale value at ₹ 38,56,000/- in concurrence to the provisions laid in section 50C of the IT Act/ 1961. In compliance to the request made by the A.O. vide letter dated 02.08.2010 the Assessing Officer referred the property to the AVO, Meerut vide letter dated 09.08.2010/ u/s 50C(2) to determine the fair market value of the property. Vide report dated 13.12.2010, the AVO determined the fair market value of the property in question at .....

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reproduced by the A.O. in the assessment order dated 28.12.2010. The objections raised by the assessee were considered and vide letter dated 20.12.2010 the Assessing Officer rejected the same. In the same letter, the A.O. show caused the assessee as to why the proposed valuation of ₹ 28,24,100/- should not be taken as sale consideration for calculating the capital gains. Through the assessee appeared on 22.12.2010, no reply to the said shown cause was forwarded to the Assessing Officer. Th .....

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