TaxTMI 
TaxTMI 
2015 (9) TMI 1560
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.... the case, in brief, are that the assessee is an individual and filed her return of income on 24-07-2008 declaring total income of Rs. 12,01,920/- consisting of long term capital gain. From the return, the AO noted that the assessee, along with Shri Raosaheb Babasaheb Mangire sold a property situated at CTS No.1157 and 1158, Sadashiv Peth, Pune admeasuring 878.77 sq.mtr and 3572.08 sq.mtrs to M/s. U.K. Enterprises for a consideration of Rs. 1,50,00,000/- vide purchase deed dated 21-04-2007. Further, the assessee was also found to have sold another property situated at CTS No.990, Sadashiv Peth, Pune admeasuring 150.50 sq.mtrs to the same party for a consideration of Rs. 17,00,000/-. The value of these properties for the purpose of stamp duty was adopted by the registering authorities at Rs,2,62,00,000/- and Rs. 31,60,000/- respectively as per the respective sale deeds totaling Rs. 2,93,60,000/-. The AO noted that the property at CTS No.1157 & 1158, Sadashiv Peth, Pune was a joint property held by four persons, viz., Shri Raosaheb Babasaheb Mangire, Sou. Jaidevi Mallikarjun Warad (Assessee), Shri Yogesh Sudhir Sopal and Shri Manoj Ratnakar Andalkar. All the four persons were found t....
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....tion report of the valuation officer. However, the AO found that the assessee has raised the very same points that were more or less raised before the Valuation Officer, which according to him were elaborately dealt with by the DVO while determining the value at Rs. 2,86,87,000/-. The long term capital gain arising out of the transactions was thus computed by the AO in the case of the assessee as under : Sale consideration as per valuation report Rs.2,86,87,000/- Less : Cost of acquisition as on 01-04-1981 i) In respect of property at CTS No.1157 & 1158 = Rs. 5,98,500 x 551/100 Rs.32,97,735/- ii) In respect of property at CTS No.990 Rs. 20,237 x 551/100 Rs.1,11,505/- Rs.34,09,240/- Rs.2,52,77,760/- Long Term Capital Gains : Less : Investment u/s.54F Rs.6,34,834/- Investment u/s.54EC Rs.40,00,000/- Rs.46,34,834/- Taxable Long Term Capital Gain Rs.2,06,42,926/- 5. The net taxable long term capital gain so worked out above was reduced to Rs. 1,96,42,926/- subsequently by order passed u/s.154 of the I.T. Act dated 18-01-2011, at the behest of....
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....ice a willing purchaser would pay to the willing seller for a property, having due regard to its existing condition, existing advantages and its potential possibilities when laid out in the most advantageous manner. The assessee also emphasized that even for the purpose of sec. 50C(2) the DVO has to consider this position. Citing that in the case of the assessee, there were several adverse factors like joint and undivided ownership, out of 4 owners, only 2 owners were selling the property, fully tenanted property, not even a square inch in the possession of the owners, situated in the congested area, immediate possession not available to the buyer etc. it was argued that the market value as taken for the purpose of stamp duty as the fair market value in the present case. It was accordingly pleaded that the value adopted by the assessee for the purpose of computation of capital gains be accepted and the addition made by the AO be quashed. 8. However, the Ld.CIT(A) was also not satisfied with the explanation given by the assessee and upheld the addition made by the AO. While doing so, he held that the stamp duty value in respect of the property was Rs. 2,62,00,000/- as per sale deed....
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..... The DVO has considered the fact that the location of the flat cited for comparable sale instance is far inferior to the property of the assessee and the property of the assessee is more centrally located than the sale instance cited. 8.5 So far as the time gap is concerned he noted that the assessee's, registered valuer himself has relied on the sale instance of February 2001 which infact predates the sale instances of the year 2003 and 2004 taken into consideration by the DVO. 8.6 So far as the objection of the assessee that the sale instances taken by the DVO are very small portions of land admeasuring between 100 to 500 sq,mtrs. whereas in the assessee's case the land involved is more than 4450 sq. mts is concerned the same was rejected by the CIT(A) on the ground that the assessee's share out of the total land area of 4450 sq, mrs is only 1112 sq.mrtrs. Further, DVO has stated that smaller plots would fetch comparably less price as compared to the larger plot/place as that gives the developer more potential to develop the land. Rejecting the various explanations given by the assessee and distinguishing the various decisions cited before him the Ld.CIT(A) upheld the action o....
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....3 years and few months 60% 60% 50% 43% Increase in amount for time gap 8854.8 11960 9050 6504.2 Total 23613 31894 27150 21630 Add : for locational advantage 20% 15% 15% 15% Increase in amount on account of locational advantage 4722.6 4784.2 4072.5 3244.5 Total value 28335 36679 31223 24875 Average rate 30278 Deduction for size, tenants, undivided share etc. at 25% 7569.4 Rate adopted for valuation 22708 Or Say 22710 12.1 He submitted that in respect of the 4 properties considered as comparable by the DVO the CIT(A) has stated that all these properties were also having tenants, therefore, the DVO has rightly considered them as comparable instances for arriving at the fair market value. However, the conclusion of the CIT(A) is not correct in respect of the 3 properties. 13. So far as the property at Survey No. 437/A/2 is concerned he submitted that the observation of the CIT(A) that the above property was in the possession of the tenants is factually incorrect. Referring t....
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....He submitted that the selling rate of property at Survey No.139 was 19,934/- and the selling rate of property at Survey No.540 was Rs. 18,100. It shows that the tenanted property fetches lesser consideration. Therefore, as against 8 tenants in the property at Survey No.273 the price per sq.ft. in the case of the assessee has to be much less. 18. The Ld. Counsel for the asessee further submitted that the DVO has increased the valuation of the comparable instances on account of time gap and locational advantages. So far as the time gap is concerned the Ld. Counsel for the assessee submitted that the DVO has given an arbitrary increase while he should have adopted cost inflation index. Secondly, he has not brought on record any locational advantage and the property of the assessee is also situated in the heart of the city. Therefore, the benefit of locational advantage granted is grossly incorrect. Further, the DVO has given reduction @25% on account of factors like size of the property and undivided shape and occupation by the tenants. He submitted that as against reduction of 25% the benefit should be given of about 50%. He accordingly submitted that the addition made by the AO and....
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....de by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case the asessee sold 2 properties. The first property is situated at CTS Nos. 1157 and 1158 at Sadashivpeth, Pune and was owned by the assessee along with 3 other owners. Similarly, the assessee also sold another property situated at CTS No.990. Sadashivpeth, Pune. The share in the first property sold was at Rs. 85,34,700/- whereas the value determined by the stamp valuation authority was Rs. 2,62,00,000/-. The assessee has filed the valuation report of an approved valuer according to whom such valuation was Rs. 1,19,77,000/- and the value determined by the DVO was Rs. 2,52,69,700/-. Similarly, for the property at Survey No.990 the assessee has declared the sale consideration of Rs. 17 lakhs whereas the stamp valuation authorities have adopted the value of Rs. 31,60,000/-. The assessee has filed valuation report of an approved valuer who has valued the property at Rs. 14,88,500/- whereas the value determined by the DVO was Rs. 34,17,300/-. We find the AO rejecting the various explanat....
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....e. 25. So far as property at Survey No.139 is concerned it has been taken by the DVO as a comparable sale instance. Here also, from the English Translated copy of the sale deed placed at pages 142 to 147 of the paper book, we find it has been mentioned at clause 1(D) and (E) that the vendors are absolute owners of the said property and their names are entered in the property card and the vendors are enjoying the said property by succession which is free from any encumbrance and they have also handed over the actual physical and vacant possession of the said property by meets and bounds. Thus property at Survey No.139 is also not a tenanted property and therefore the same cannot be considered as a comparable instance. 26. So far as property at Survey No.540 is concerned we find the same has been taken by the DVO as a comparable sale instance. We find from the English Translation of the sale deed (pages 183 to 191) that the said property is also not a tenanted one. Since it has been clearly mentioned that the property is clear and free from encumbrance such as mortgage, donation, gift, lien, maintenance etc. and the property is not subject matter of any court litigation, therefore,....