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| The Tax Publishers2020 TaxPub(DT) 2096 (Jp-Trib) INCOME TAX ACT, 1961
Section 50
Where DVO determined fair market value by considering the DLC Rates for commercial property in the year which was also adopted by the stamp duty authority, considering fact that the property was occupied by the tenants and dispute was pending in the Court, sale consideration as agreed between parties and reflected in sale deed was representing correct fair market price of the property in question.
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Capital gains - Full value of consideration - DVO determined fair market value by considering the DLC Rates for commercial property - Property was occupied by the tenants and dispute was pending in the Court
Assessee was aggrieved by order of CIT(A) sustaining addition made by AO to extent of full value consideration being determined by the DVO as against the consideration adopted by AO. Held: DVO determined fair market value by considering the DLC Rates for commercial property in the year which was also adopted by the stamp duty authority. DVO then gave discount/rebate of 15% due to distressed sale of property. It was pertinent to note that DVO did not cite any comparable sale instances or reasons for giving rebate of 15% as to how the value of the property was reduced only to 15% by the reasons that the property was occupied by the tenants and dispute was pending in the Court. It was clear from the facts and circumstances of the case that the property would not fetch a good price unless vacant possession was handed over to the buyer. Certainly adverse factors affect fair market value and no buyer would like to purchase the property if vacant and undisputed possession is not handed over to him at time of transfer. Accordingly, in facts and circumstances of case, sale consideration as agreed between parties and reflected in sale deed was representing correct fair market price of the property in question.
REFERRED : GKN Driveshafts (India) Ltd. v. ITO & Ors. (2003) 259 ITR 19 (SC) : 2003 TaxPub(DT) 734 (SC), CIT v. Trend Electronics 2015 TaxPub(DT) 3759 (Bom-HC), CIT v. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom) : 2012 TaxPub(DT) 676 (Bom-HC), CIT v. K.K. Enterprises (2009) 178 Taxman 187 (Raj.-HC) : 2009 TaxPub(DT) 748 (Raj-HC), Arun Kumar Choudhary v. ITO (ITA No. 268/JP/2015, dated 8-9-2016 -- ITAT Jaipur Bench), Sri Narayanarao M. More v. ITO [ITA No. 959 to 964/Bang/2014, dated 31-8-2016 -- ITAT Banglore Bench] and ITO v. Shiv Shakti Build Home (P.) Ltd. [ITA No. 157/Jd/2009, dated 11-2-2011- ITAT Jodhpur Bench) : 2012 TaxPub(DT) 304 (Jod-Trib).
FAVOUR : In assessee's favour.
A.Y. : 2011-12
INCOME TAX ACT, 1961
Section 48
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