FMV-No approach road and weaker sections society in colony. DVO directed to give 30% adjustments in calculating fair market value for disadvantages-ITAT Hyderabad
Case Law Details:
ITA.No.1782/Hyd/2011 Assessment Year 2008-2009
Smt. M. Nagarathnamma Madanapalle vs. Income Tax Officer
date of Judgment/Order: 13/05/2016
Brief Facts of the Case:
During the assessment proceedings under section 143(3), With regard to the long term capital gain returned by the assessee, the A.O. observed that assessee had purchased the land at a price less than the market value/SRO value and had sold the land also for the consideration less than the SRO value. With regard to sale of the land, though the stamp duty value was Rs.49,46,000, sale was recorded at Rs. 25 lakhs only. At the request of the assessee, AO referred the matter to the valuation cell. But since the valuation report was not received and the assessment was getting time barred, he treated the SRO value of the property as the sale consideration received by the assessee.
Aggrieved, assessee preferred an appeal before the CIT(A)who observed that the DVO’s report had since been received and therefore, he directed the valuation given by the DVO to be adopted. Against this order the assessee approached ITAT.
Contentions of the assessee:
The assessee submitted that the DVO valuation was not correct as the assessee’s objections had not been properly considered by the DVO. He submitted that though the DVO accepted that the lands of the assessee did not have proper approach road and there was a colony of weaker sections of society in the vicinity, he had given only 15% weightage for such disadvantageous position as against 50% claimed by the assessee, atleast 30% weightage ought to be given for this disadvantageous position of the land.
Important Excerpts from ITAT Judgment:
we find that it is an admitted and proven fact that there is no approach road to the assessee’s land and also that there is a weaker sections of society colony in the vicinity. The DVO has given only 15% weightage for the same. Whereas, assessee had claimed 50% as an adjustment. We find that the weightage at 15% given by the DVO is not commensurate with the disadvantages pointed out by the assessee and admitted by the DVO. Therefore, we direct the A.O. to give adjustment of 30% for the said disadvantages.