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TMI Blog2015 (11) TMI 1782X X X X Extracts X X X X X X X X Extracts X X X X ..... actually receivable by the assessee from the tenants. The assessee has also contended that if the valuation of the let out portion of the assessee's property is done by taking into consideration, the actual rent receivable by the assessee from the tenants, the total fair market value of the property of the assessee as per such revised estimation would be less than the sale consideration of ₹ 1,30,00,000/- shown by the assessee and there would be no case of making addition on account of capital gain. We direct the Assessing Officer to verify this contention of the assessee and if it is found after recomputation of the valuation of the assessee's property that the fair market value is less than the sale consideration shown by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistrar of Assurance that the market value of the property sold by the assessee as ascertained for the purpose of payment of stamp duty was ₹ 3,17,90,300/-. According to the Assessing Officer, the capital gain arising from the sale of his property was liable to be computed by adopting the Stamp Duty value as per the provision of section 50C of the Act. He, therefore, required the assessee to offer his explanation in this regard. In reply, the following explanation was offered by the assessee:-- (i) That I have submitted a valuation report before you by which you will find my whole of the said property was tenant, at these tenants are more than 20 years old and that I was getting only ₹ 1440/- per month out of the whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,17,90,300/- as against ₹ 1,30,00,000/- shown by the assessee. 3. The action of the Assessing Officer in adopting the higher sale consideration as per the market value determined for stamp duty purpose for invoking the provision of section 50C was challenged by the assessee in an appeal filed before the ld. CIT(Appeals) and after considering the submissions made by the assessee as well as the relevant material available on record, the ld. CIT(Appeals) upheld the action of the Assessing Officer on this issue and confirmed the addition made by the Assessing Officer to the total income of the assessee under the head 'capital gain' by invoking the provision of section 50C vide his appellate order dated 15.03.2012. Against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on occupied by the tenant is valued by the DVO by adopting the rent capitalisation method and taking the fair market rent of ₹ 1,83,590/- as against the actual rent of ₹ 1,400/- only received by the assessee. He contended that what is required to be taken for determining the fair market value of the property by applying the rent capitalization method is the actual rent received by the assessee and not the rent prevailing at the current market rate. He also pointed out that the Assessing Officer as well as the DVO was aware of the actual rent received by the assessee and still the same was ignored and fair market rent was adopted by him to determine the fair market value of the assessee's property. Relying on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty, as the landlords should be taken into account. It was held that when the property is a tenanted property, the owner is entitled to collect only the rent payable by the tenants and a purchaser of such tenanted property would be in the same position as the vendor, i.e. original owner. It was held that a purchaser, therefore, would be restricted to collection of rent only from the tenants and the value of such property in the hands of the owner or transferee, if calculated on the rental basis, would have to be determined by the rent, which is available to them for collection. At the time of hearing before us, no authority has cited on behalf of the Department taking a contrary view on this issue. We, therefore, respectfully follow the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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