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2016 (9) TMI 400 - AT - Income TaxComputation 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 ₹ 1 crore. In these 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 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 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 ₹ 5,47,518/- . The AO in this case has referred the valuation to the DVO. However, there is no whisper in the order of learned CIT(Appeals) regarding the receipt of DVO s report. Till date the Revenue is not in a position to show the DVO s report. Thus find that this is a very strange situation. Absence of DVO s report despite of so much elapse of time is not at all warranted and remit this issue to the file of the AO. The AO shall consider the issue afresh after taking into account and bringing on record the valuation done by the DVO Decided partly in favour of assessee for statistical purposes.
Issues Involved:
1. Confirmation of the ITO's order by CIT(A)-II. 2. Consideration of the assessee's submissions and documents by CIT(A)-II. 3. Computation and charging of capital gain. 4. Application of Section 50C in the valuation of the first property. 5. Valuation of the second property and the absence of the DVO's report. Detailed Analysis: Issue 1: Confirmation of the ITO's Order by CIT(A)-II The appellant contended that the CIT(A)-II erred in confirming the ITO's order without properly considering the assessee's submissions and documents. The Tribunal noted that the CIT(A)-II had indeed considered the various arguments and evidence presented by the assessee but found them insufficient to overturn the ITO's decision. Issue 2: Consideration of Assessee’s Submissions and Documents by CIT(A)-II The appellant argued that CIT(A)-II did not properly consider the submissions and documents filed before him. The Tribunal observed that the CIT(A)-II had evaluated the evidence, including complaints about encroachments and the lack of an approach road, but found them unconvincing due to the absence of continuous complaints or substantial proof post-2003. Issue 3: Computation and Charging of Capital Gain The appellant was aggrieved by the AO's computation of capital gains amounting to ?45,73,951/-. The Tribunal upheld the CIT(A)-II's decision, noting that the valuation by the Stamp Valuation Authority was more reliable than the assessee's valuation, especially given the significant price increase within a month when the property was sold again. Issue 4: Application of Section 50C in the Valuation of the First Property The first property was sold for ?51 lakhs, while the Stamp Valuation Authority valued it at ?95,25,600/-. The AO finalized the assessment based on the Stamp Valuation Authority's valuation since the DVO's report was not received in time. The CIT(A)-II upheld this valuation, rejecting the assessee's claims about the lack of an approach road and encroachments due to insufficient evidence. The Tribunal agreed with the CIT(A)-II, emphasizing that the significant price increase within a month was implausible and affirmed the application of Section 50C. Issue 5: Valuation of the Second Property and Absence of the DVO's Report The second property was sold for ?2 lakhs, but the Stamp Valuation Authority valued it at ?5,47,518/-. The AO proceeded with the Stamp Valuation Authority's rate due to the absence of the DVO's report. The CIT(A)-II upheld the AO's decision, noting the lack of evidence supporting the assessee's claim of the property's poor condition. The Tribunal found the absence of the DVO's report despite significant time elapsed to be unwarranted and remitted the issue back to the AO for fresh consideration after obtaining the DVO's valuation. Conclusion: The appeal was partly allowed for statistical purposes, with the Tribunal affirming the CIT(A)-II's decision on the first property and remitting the issue of the second property's valuation back to the AO for fresh consideration. The Tribunal emphasized the importance of reliable evidence and the necessity of obtaining the DVO's report for accurate valuation.
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