TaxTMI 
TaxTMI 
2015 (9) TMI 1560
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....o add, alter, amend, or delete any of the above grounds of appeal." 3. Facts of 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 Yoges....
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....20,237/-. As per the AO, the assessee was granted opportunity to challenge the valuation 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 c....
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....o some unknown sale. It was stressed that the fair market value is linked with the price the property would ordinarily fetch in the open market, i.e. the price 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 assess....
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....nd therefore in different locations is concerned, the Ld.CIT(A) held that time lag between the comparable sale instance relied upon by the DVO has not been questioned. 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....
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.... 139 540 273 Year of Sale May 2003 June 2003 Feb2004 July 2004 Rate as per sale deed 14758 19934 18100 15126 Time gap in years 3 yrs 11 mths 3 yrs 10 mths 3 yrs 2 mths 2 yrs 9 mths Increase for time gap of about 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, th....
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....s no dispute in respect of the said property and therefore the conclusion of the Ld.CIT(A) is grossly incorrect. 17. The Ld. Counsel for the assessee submitted that three properties did not have any tenants out of the above 4 properties. Only the property at Survey No.273 was having 8 tenants and the said property was sold in the year 2004 and the selling rate of the said property is 15126/-. 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 s....
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.... sale instances 463 463 463 480 Index in A.Y. 2008-09 551 551 551 551 Indexed Rate 17,563 23,723 21,540 17,363 20,047 Rate after deduction for Tenanted prop 50% 8,781 11,861 10,770 8,682 10,024 He accordingly submitted that the order of Ld.CIT(A) be set aside and the appeal filed by the assessee be allowed. 22. We have considered the rival arguments made 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 valu....
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....e sale instances taken by the DVO we find property situated at 437/A/2 is not tenanted one. A copy of the sale deed of the said property is placed at pages 105 to 122 of the paper book. At page 5 of the sale deed (109 of the paper book) it has been clearly mentioned that "the entire building and the said property is in vacant and peaceful possession of the party of the first part". Therefore, the sale instance taken by the DVO for property situated at Survey No.437/A/2 cannot be a comparable one. 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 consider....