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Shri Madhukar Shyamraoji Dafe, Amravati Versus The Income-tax Officer (O.S.D.) , Amravati

2016 (9) TMI 400 - ITAT NAGPUR

Computation of capital gain by the AO in respect of two properties sold - valuation by DVO - Held that:- Upon careful consideration note that the said land was sold by the assessee on 10-11-2006 at a consideration of ₹ 51 lakhs to Shri Bandal. The said Shri Bandal sold the said property to the third party M/s Voss Exotech Automatic Pvt. Ltd. for a consideration of R.1,42,65,000/- on 15-12-2006. Thus in a one month period there was an increase in the price of the same land by approximately .....

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. However, since the value adopted by the Stamp Valuation Authority is ₹ 92,50,000/-, the same value has been adopted by the authorities below. Thus this is very fair and the assessee should not be aggrieved on this account. Hence affirm the order of learned CIT(Appeals) and decide the issue in favour of the Revenue qua the first property. - Another property has been sold by the assessee for ₹ 2 lakhs. The AO noted that the value adopted by the Stamp Valuation Authority was ͅ .....

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g on record the valuation done by the DVO - Decided partly in favour of assessee for statistical purposes. - I.T.A. No. 337/Nag/2013 - Dated:- 15-7-2016 - Shri Shamim Yahya, Accountant Member Appellant by : Shri C.J. Thakar Respondent by : Shri A.R. Ninawe ORDER This appeal by the assessee is directed against the order of learned CIT(Appeals)-II, Nagpur dated 28-06-2013 and pertains to assessment year 2007-08. The grounds of appeal read as under : 1. Learned C.I.T.(A)-II erred in confirming .....

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ssee submitted that he shall not be pressing for ground No. 5 raised as above. Hence the same is dismissed as not pressed. 3. The assessee in this case is aggrieved on account of computation of capital gain by the AO in respect of two properties sold. 4. As regards the first property it was noticed by the AO that it was a land and the market value of the land which was sold on 10-11-2006 as per the Stamp Valuation authority was ₹ 95,25,600/- whereas the sale consideration shown by the asse .....

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ontention of the assessee that there was no appropriate approach road. Further there were some encroachments also. The assessee also submitted a report of a registered valuer which valued the property at ₹ 47,62,800/-. However, the contention of the assessee was rejected by the learned CIT(Appeals). Learned CIT(Appeals) held as under : 6.1 The various arguments given by the appellant for valuing the property at a significantly lower, value have been considered. The main argument of the app .....

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a comparatively low value and it was imperative that the appellant should sell the property to some builder or "some strong persons" who could get the encroachment removed and that therefore the property was sold to the Sandal Group who are builders in Pune in the month of December, 2005 through a broker. 6.2 However no reliable evidence has been furnished by the appellant to establish the fact that the said property did not have any approach road at the time of its sale. The only evid .....

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ice and administrative authorities have been properly attended to since no complaint has apparently made by the appellant during the period after 2003 to upto 2006 when the property was eventually sold. Had the matter not been sorted out to the favour of the appellant, he would have persisted with his efforts and relevant evidences woulcl have been available with him. 6.3 The other piece of evidence relied upon by the appellant is the valuation report given by its registered valuer Shri A.N. Bap .....

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graphs which are claimed to have been taken in about 2006. Any report based on such evidence cannot be taken to be reliable. 6.4 The valuation report also states that the said property was sold by the appellant to Shri K. B. Bandal who then sold to a third party (M/s. Voss Exotech Automatic Pvt. Ltd.) who purchased the industrial plot in the adjoining property (gat no. 285) which given access road to gat. No. 350. The appellant sold the property to Shri Bandal for a consideration of ₹ 51 l .....

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e difference in the valuation of the property at which the appellant sold it and at which Shri K. B. Bandal sold it. It is further seen that no evidences have been furnished by the appellant to establish that this indeed is a fact that there is no evidence to establish that M/s. Voss Exotech Automatic Pvt. Ltd. did purchase. the adjoining property which provided access to gat no. 350. As a matter of fact the valuation report of Registered Valuer has a map which is an Annexure to the report (at p .....

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wh'ich it sold the pr-operty to Shri Bandal and the price at which Shri Bandal sold the property In M/s. Voss Exotech Automatic Pvt. Ltd. For this reason also it is difficult to accept the contention of the appellant that provisions of section 50C should riot be applied. 6.5 It is also to be noted that all the submissions made by the appellant in this regard including the valuation report of the Registered Valuer were presented before the ova and the ova has duly considered the above aspect .....

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n December, 2005 and that therefore the deal was eventually finalized at a lower price: The reply of the ova in this regard is reproduced as under - "The assessee's contention regarding the deal was decided in the year Dec. 2005 is after thought. The assessee has not produced any documentary evidence such as registered agreement to sale etc. to establish that the deal was decided in Dec.2005./Vor there is any mention about it in the sale deed Dt. 10/11/2006. Morever the entire sale cons .....

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ace. Hence the essessee' s contention in this regard cannot be accepted. Regarding the obstruction of approach road to the property, this factor is duly considered in arriving the land rate. 6.6 The DVO had adopted "comparable sale instance" method of valuation of property. One of the sale instances is the same property which has been sold by the appellant to Shri Bandal and then sold by Shri Bandal to Mls VOSS Exotech Automatic Pvt. Ltd. for a consideration of ₹ 1,42,65,000/ .....

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10% for internal road development which results in Cl total of 50% deduction of the stamp duty valuation. This fact has also been quoted by the OVO and the relevant comment of the OVO is reproduced hereunder: - "The assessee has submitted registered. Valuer report by one Mr. A.N. Bapat whose registration number is quoted as CAT-A5 106 of 1988. According to the regd. Valuer the deduction or 30% is considered for the obstruction to the approach road, 10% for open space and common amenities an .....

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f section 50C would be applicable in the case under consideration. 5. Against the above order, assessee is in appeal before the ITAT. 6. I have heard both the counsel and perused the records. Learned counsel of the assessee reiterated the submissions made before the authorities below. He submitted that there was no approach road to the land. Further more there were encroachments also and hence the value at the time of sale was much lower than the stamp valuation rates. Thus learned counsel plead .....

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circumstances, the assessee s plea that the value of the land sold on 10-11-2006 should be ₹ 47,62,800/- is not at all acceptable. By any stretch of imagination the same property cannot have enhancement of ₹ 1 crore in a one month period. This is beyond preponderance of probability. Further more I find that the learned CIT(Appeals) has passed a reasonable order considering all the facts of the case. The DVO also has valued the property at ₹ 1,17,60,000/-. However, since the val .....

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47,518/-. In an explanation in this regard the assessee submitted as under: The flat was in mutilated condition. For last 20 years the flat had no repairs and maintenance. Without giving heed to this condition the SVO mechanically stated the rate applicable to new building Therefore there was no takers of the property for more than a decade. The assessee sold it in extremely helpless condition. In view of the above, it is requested to sale proceeds of ₹ 2 lacs be adopted. Otherwise the val .....

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