SUNIL KUMAR PALIWAL, HUF,JAIPUR vs. ITO, AJMER

+आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 826/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2007-08 cuke M/s Sunil Kumar Paliwal HUF, Income Tax Officer, Vs. G-146, Makarwali Road, Vaishali Ward-2(1), Nagar, Ajmer. Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAGHS 3758 B vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 827/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2007-08 cuke Tara Devi Paliwal, Income Tax Officer, Vs. G-146, Makarwali Road, Vaishali Ward-2(1), Nagar, Ajmer. Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AJVPP 4222 H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Mahendra Gargieya (Adv) jktLo dh vksj ls@ Revenue by : Shri R.A. Verma (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 27/07/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 20/09/2017 vkns'k@ ORDER PER: BHAGCHAND, A.M. Both the appeals have been filed by the two different assessees emanates from the two separate orders of the Ld. CIT(A), Ajmer dated 14/07/2016 pertaining to the A.Y. 2007-08.

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convenience and brevity, a common order is being passed.

In both these appeals, a common issue is involved. For the self

out, a jointly sold a property being plot No. 471, Gali No. 5, Adrash

Nagar Vistar, Raja Park, Jaipur on 03/06/2006. The declared

consideration as per the registered deed was Rs. 23,00,000/-. However,

the Sub Registrar valued the property at Rs. 48,60,591/- U/s 54 of the

Stamp Duty Act. Both these assessees were having 50% shares in the

property. On the assessee’s request, the matter was referred to the

valuation sale as per the provisions of Section 50C(ii) of the Act. The

Assistant Valuation Officer, Jaipur proposed the value at Rs. 46,75,000/-

and also invited objection from the assessee for the proposed valuation.

The assessee submitted the objections before the Assistant Valuation

Officer, Jaipur. After considering the objections and after physical

inspection, it was assessed at Rs. 44,41,500/- and 50% of the same has

been adopted the value by the Assessing Officer in each of the case

while working out the long term capital gain.

assessee carried the matter before the ld. CIT(A), who after considering

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the submissions, dismissed the appeal of the assessee by holding as

under:-

I have gone through the assessment order, statement of facts, grounds of appeal and written submission carefully. It is seen that the assessee had sold Plot No. 471, Adarsh Nagar, Jaipur, the consideration of which, as per the registered sale deed was Rs. 23 lacs. The Sub Registrar valued the property at Rs. 48,60,591/- u/s 54 of the Stamp Duty Act. During the course of assessment proceedings, the assessee requested the AO to refer the valuation of the property to valuation officer u/s 50C(2). The Valuation Officer after considering the objection raised by the AO to the proposed valuation, valued the property at Rs. 44,41,500/-. The assessee’s share in the property was 50%, hence, the AO took the sales consideration of the property in the hands of the appellant at Rs. 22,20,750/-. As the sales consideration of the property has been adopted by the AO at Rs. 22,20,750/- only after referring the property for valuation to the Valuation Officer at the request of the assessee as provided u/s 50C(2), therefore, I find no infirmity in the action of the A.O. adopting the sales consideration of the property at Rs. 22,20,750/- U/s 50C. Accordingly, the addition of Rs. 10,70,750/- made by the A.O. under the head ‘capital gain’ is hereby confirmed.”

The ld. CIT(A) has also given similar finding in the case of Smt. Tara Devi

Paliwal and dismissed the appeal.

grounds of appeal:

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Grounds of ITA No. 826/JP/2016

“1.1 The very action taken u/s 147 r/w 148 is bad in law without jurisdiction and being void ab-initio hence, the same kindly be quashed. Consequently the impugned assessment framed u/s 143(3)/147 dated 24.06.2014 also kindly be quashed.

1.2 The impugned order u/s 143(3)/147 dated 24.06.2014 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed.

2.1 The Id. CIT(A) erred in law as well as on the facts of the case in confirming the LTCG at Rs.10,70,750/-, as against the declared LTCG of Rs. 84,161/- only. The addition so made and confirmed by the Id. CIT(A) being totally contrary to the provisions of law and facts of the case, kindly be deleted in full.

2.2 The Id. CIT(A) erred in law as well as on the facts of the case in considering the full value of the sale consideration u/s 50C of the Act at Rs.22,20,750/- [being 50% of Rs.44,41,500/-], based on the report of the DVO, as against the declared sale consideration of Rs.11,50,000/-. The enhancement in the sale consideration by the AO and confirmation by the Id. CIT(A) being totally contrary to the provisions of law and facts of the case hence, the sale consideration as declared by the appellant, kindly be considered.

2.3 The Id. CIT(A) erred in law as well as on the facts of the case in not at all considering the various objections raised u/s 50C(2) of the Act and in blindly adopting the valuation done by the DVO as a final word even though the impugned valuation so made seriously suffered from various deficiencies apparent from the record itself, but were ignored & confirmed without any application of mind and therefore, the Id. CIT(A) erred in wrongly adopting the full value of sale consideration at Rs.22,20,750/- for the half share. Therefore, this part of the order of the Id. CIT(A) kindly be quashed being highly perverse and the declared

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sale consideration at Rs.11,50,000/- kindly be accepted and the consequent addition, kindly be deleted in full. Rs.84,161/-: The Id. CIT(A) further erred in law as well as on the 2.4 facts of the case in not correctly & judiciously appreciating the facts that as against the LTCG of Rs.10,70,750/- computed by the AO afresh, the appellant had already declared LTCG of Rs.84,161/- in the computation of total income and therefore, to that extent there was a clear case of double taxation of the same income yet the addition so made and confirmed by the Id. CIT(A) being totally contrary to the provisions of law and facts of the case, kindly be deleted in full.

Similar identical grounds have also been taken in ITA No. 827/JP/2016

time of hearing, therefore the same are dismissed as not pressed.

addition on account long term capital gain. In this case, the ld AR of the

assessee has submitted that the sale was a distress sale where neither

the rent capitalization method nor land and building method could be

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applied to work out fair market value and it tried to establish that there

were peculiar facts and circumstances of the case, which has direct

bearing on the valuation of the sold asset. The ld. AR has filed a detailed

written submissions, the contents of the written submissions has

reproduced hereunder:

1.1 At the outset, it is submitted that the present is a case of distress sale where neither the Rent Capitalization Method nor Land & Building method could be applied and the Fair Market Value (FMV) could and should have been ascertained only considering the peculiar facts of the case. 1.2 The undisputed facts having direct bearing over the controversy in hand are that the subjected property i.e. plots no. 471, Gali No.-5, Adarsh Nagar Vistar, Raja Park, Jaipur was earlier owned by Late Shri Ramlal Bhatia. On his death, the same was succeeded by his successors namely Smt Raj Bhatia w/o Shri Ramlal Bhatia, Raj Kumar, Rajendra, and Sanjay s/o Shri Ramlal Bhatia, who sold one half of the said property to Shri Sunil Kumar Paliwal and Smt. Tara Devi Paliwal, jointly with equal share. In the one half of portion the sellers continued to occupy/reside. The subjected property was sold on 23.04.2006 for total consideration of Rs.23,00,000/- i.e. Rs. 11,50,000/- each buyers. At the time of sale, the ground floor was under lease to State Bank of Patiala on monthly lease rental of Rs.12,400/- per month whereas the first floor was under lease to OTIS Elevators Co. (India) Ltd. on monthly lease of Rs.17,000/- per month which continued till the end of A.Y.2006-07. It is submitted that unfortunately, right since the very purchase of the said property, a dispute was raised by the bank, who denied to make the payment of the entire lease rent to the buyers/lessees (assessee), mainly on the reasoning that late Shri Ramlal Bhatia had availed a loan which was to be repaid, partly out of the lease rent payable by the bank to Shri Bhatia (and now to Paliwals) and hence the bank was not making any payment of lease to the Paliwals. Accordingly, a suit was filed before the Trail Court in case no. 167/2001 which was decided vide order dated 10.12.2002 and against the same , the bank approached the Hon`ble

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High Court by way of revision registered as CMA 407/2003 dated 30.01.2003. The court granted stay over rent payment. Out of court settlement was reached just a few days back to the sale. Though, the assessee continued getting rent from OTIS Elevators Co. (India) Ltd. 1.3 On the other hand because of this continuous and vexed litigation, the assessee was not finding suitable buyers. The fact of litigation was in the knowledge of the neighbors and also well known to the nearby property dealers, as a result of which, it became a case of a disputed property. A copy of certificate of a property broker was submitted support the contention (PB 7) who even confirmed that the assessee sold the property below price which remained undisputed who even confirmed that assessee sold the property below price which remained undisputed. On the one hand, the assessee being in the financial needs wanted to sale the property at the earliest possible however, the litigation was delaying the sale, on the other. This has resulted in a considerable downfall in the offers being made by the prospective buyers of the property to the assessee sellers. 1.4 It is further submitted that the present owner M/s Biranani Safe Deposit Vaults Pvt. Ltd., Jaipur had already been under negotiation with the assessee seller since long and the parties almost reached to a common consensus of the deal to be finalized at Rs. 23,00,000/- or around. However, it was only because of non settlement if the legal dispute, the registration of the said transaction in favour of the buyer, was not possible earlier. As soon as the legal dispute between the bank and the assessee seller settled in the month of March’2006 (when the bank paid arrears of rent), the buyer got the property registered in his name through registered sale deed executed on 03.04.2006 (PB 20-31). These facts might not have been narrated in the preamble of the registered sale deed yet however, the facts which otherwise prevails being the existence of a serious legal litigation going on and therefore, the buyer was in a dictating term, cannot be brushed aside. 1.5 It was submitted before the AO & DVO that: “(vi) The property was disputed, court case was there on the property (photocopy enclosed) and placed at S.No.1 to 15. Smt. Taradevi, Age 70 years have to travel Jaipur by bus on every hearing, very much mental

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tension was there in her old age due to court case and non-payment of rent by bank.” However, the DVO in Pr-6 (PB 8-19) rejected the same stating that: “6. The assessee has put the paper related to the year 2002-03. In the year or date of sale the property has free from encumbrance or any dispute (copy of sale deed page enclosed is proof) hence does not call any discount.” The AO/DVO did not appreciate that because of prolonged adverse publicity due to continued litigation which fact is not denied, it was a case of distress sale. Various prospective buyers though initially willing but having the knowledge of dispute, did not turn up. Dispute settled only in March, 2006. 1.6 Unfortunately however, the ld. Sub registrar while adapting the value u/s 54 of the Registration Act and estimating the value at Rs.48,60,591/- and also the ld. DVO while estimating the value u/s 50C at Rs.44,41,500/-, did not take into consideration these facts and there implications, judiciously. 2. Rent Capitalization method not applicable: 2.1 It is submitted that admittedly the bank was not paying rent to the assessee since long and the dispute between the assessee and bank was pending before court of law for five to six years immediately before the sale. Admittedly the rent is foundation ingredient of rent capitalization method, however in the instant case since no rent for the entire subjected property existed, hence the adoption of rent capitalization method for estimating fair market value is without jurisdiction and improper. 2.2 It is submitted that because of the dispute going on as stated above, the assessee’s were not getting any rent at least till A.Y.2005-06 and it was only in A.Y. 2006-07 when an out of court settlement was reached between the parties, pursuant to which the assessee were paid the full and final amount of lease rent. However, in A.Y. 2007-08 the property stood sold and therefore, the lease amount, if any, accrued to the new buyer and not to the assessee hence, no rental income shown by the assessee in the ROI filed for A.Y. 2007-08 (PB 1-3). Under these

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circumstances when, there was no rent received/receivable at the time of sale, the Rent Capitalization Method was not proper method to be applied. 3.1 Moreover, as per Guidelines for Valuation of Immovable Properties, 2009 published by the Directorate of Income Tax, Income Tax Department, Delhi (For official Use only), has provided that approach and method of valuation should be rational. It has been guided that “Normally there would be an appropriate method for a particular situation. For instance for owner occupied property, as vacant possession can be given to the buyer, land and building method would be appropriate. Similarly for rented property rent capitalization method would be appropriate. When the building is partly occupied by owner and partly rented then both the methods can be applied for respective portions.” The DVO referred but (PB 18) but ignored. 3.2 Land & Building Method: In any case, if it is held that it is not a case of distress sale and also when Rent Capitalization Method is not found proper, the only method left is the Land & Building Method. On this account however, various objections were raised before the authorities below and in particular before the DVO, however, were not considered judiciously. The assessee claimed that the fair market value of the land was less than the valuation adopted for the purpose of stamp duty/Valued estimated by the ld. DVO for different reasons, which are extracted hereunder for the sake of reference together with our submissions on the observations made by the DVO thereon: S. Assessee DVO Our comment No. (i) That this property is a 1. The AR of The fact was not denied that residential house assessee submitted the property was a residential property and built up in para that the property and half Portion i.e. by, covering the set property is 129.40 Sqmtr of Ground Floor back portion of the residential is totally and 106.25 Sqmtr of First Floor house. Ex owner is still wrong. The subject was occupied by the original residing in balance property is fully seller Bhatia family and portion house. admittedly, no application was filed by any one concern for change use / conversion from

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residential to commercial. Notably, DVO itself in para 6.4 page 3 (PB 10) has stated Particulars of tenants/ leases /licences etc and portions occupied by each – fully self occupied. Even the subjected registered sale deed itself, in the preamble, states the property to be a residential property (PB 20-31). (ii) No site plan was 2. Assessee did not The DVO did not comment on sanctioned by Nagar submitted any site this aspect. Needless to say that Nigam, Jaipur. plan may not be such a fact discourages the commented. The buyer and he takes help in use is commercial bargaining to reduce the sales consideration. No commercial activity. (iii) No lease Deed was 3. Regarding lease DVO did not comment but also executed by the bank deed the matter is ignored that due to this RCM due to disputed in between lessee was not applicable. property. The bank and lessor. This is was without the strong their matter will room. may not be commented. (iv) No strong room was 4. The construction The focus was on the fact that constructed by the of strong room is the construction of strong room bank as the portion requirement of bank was done in the set back area was constructed after does not change the which is against the building by covering the set back nature of laws and such construction was portion of the house commercial. illegal. Therefore, a prospective and due to dispute buyer shall certainly make a with owner. The stairs discount in the sale are common for whole consideration. DVO completely building. ignored this aspect. (v) Over head water tank 5. The building is The fact of there being common was also common for valued by rent stairs & common over head the whole building. capitalization water tank will certainly make Many times, there method. The water difference in the Land &

ITA 826 & 827/JP/2016_ 11 Sunil Kumar Paliwal Vs ITO

were hot talks with tank does not Building Method. The very fact land lord in the matter related the tenancy. of the presence of the original of water supply, toilet seller together with the common water, roof leakage uses of civic amenities, certainly etc. in these premises. discourages a prospective buyer and this considerably reduce the FMV sale consideration of the property. (vi) The property was 6. The assessee has DVO clearly ignored the facts disputed and court put the paper relevant for the issue in hand in case was there on the related to the year view of the case laws, papers property, placed at 2002-03. In the year and in absence of contrary S.No.1 to 15. Smt. or date of sale the evidence brought by the AO & Taradevi, aged 70 property has free DVO. It cannot be said that the years have to travel from encumbrance property was free from Jaipur by bus on every or any dispute (copy encumbrance / any dispute and hearing, very much of sale deed page facts of prolonged negative mental tension was enclosed is proof) cannot be ignored. there in her old age hence does not call due to court case and any discount. non-payment of rent by bank. (ix) That the house 9. Here AR Since Land & Building Method is was constructed in the mentioned the year appropriate hence depreciation year 1972 and building of constructed has to be reduced as admitted was rented out in the depreciation. There by the DVO also. year 2006 to the bank. it is mention that The building is 43 property is valued years old, no on the basis of rent deduction of capitalization deprecation has been method hence does given by your honour. not call any change. The depreciation is being ---- on L & B method only.

3.3 Guidelines for Valuation of Immovable Properties 2009 published by the Directorate of Income Tax, Income Tax Department, Delhi (For official Use only), has not kept in mind by the DVO. It has been provided that Approach and method should be rational. It is provided that for

ITA 826 & 827/JP/2016_ 12 Sunil Kumar Paliwal Vs ITO determination of fair market value of commercial properties if compared to land and building method, the profit method indicates lesser value, then the former should be applied. It should correctly reflect the real life situation. All factors affecting value should be considered, like.

� Shape, size, location, low lying, allowable FAR etc., for land valuation. � Type of foundation, specification, No. of storeys, standard of construction and finishing planning efficiency etc for building valuation. � Lease hold or free hold. � Under litigation or not. � Title is clear or not: owner ship & possession. � Tenanted or Self-occupied. � Encroachment / unauthorized occupant exist or not etc. � Valuation should be correctly done. � The following points should be carefully noted. � Plinth area rates should be correctly applied. � Cost indices of relevant time & place should be considered. Guidelines of Valuation of Immovable Properties 96 � Extra items should be properly framed based on correct rates of materials and labour. � For ascertaining comparable land values public auction or sale cleared by the Appropriate Authority should be considered more authentic. Reliance should be placed on sale instances of registration offices only under circumstances where Appropriate Authority instances are not available. Reliance may also be made on the local guidelines rates issued by relevant authority. � It should be based on facts noted during inspection of property and facts intimated by assessee and verified. � It should depict the property in simple terms bringing out the position on the date of inspection through a note. � The detailed measurements and specification should be noted and got accepted from the assessee or his authorized representative for avoiding contradiction.

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denied that the assessee also submitted a report of an expert i.e. the Approved Valuer (by the department) M/s S.K. Associates, Jaipur, who has also submitted his valuation report dated 30.04.2014, estimating the Fair Market Value (FMV) of the property at Rs. 23,14,948/- following the Land & Building Method. Once, it is held that Rent Capitalization Method is not applicable and the DVO not having applied Land & Building Method, the report of the other expert, has to be applied, being a report by a technical expert. There is no contrary evidence or report was brought by the AO of an expert, following the same method. Therefore, it is requested that the valuation done by the registered valuer at Rs.23,14,948/- must be accepted.

5.1 In Krishna Kumar Rawat & Ors. v/s Union of India & Ors. (1995) 123 CTR 61/214 ITR 610 (Raj) held that

“12. ----------- The respondents have to make the valuation of the property by taking into consideration all relevant facts and thereafter a decision has to be taken by the Appropriate Authority. The Viscount Simon, J. in Gold Coast Selection Trust Ltd. vs. Humphrey (Inspector of Taxes) (1949) 17 ITR (Suppl) 19 (HL) observed that, `valuation is an art, not an exact science, mathematical certainty is not demanded nor is possible. Certain element of guess has to be there based on objective factors having reasonable nexus with the evidence on record. The various factors are there on the basis of which out of the various methods by which the valuation of the immovable property can be made, appropriate method is to be adopted. It depends on the location of the property, the purpose for which the property is used, the nature of the property, the time when the agreement is entered into and similar other objective factors. The valuation, therefore, has to be done by a method which is more objective and could furnish the reliable data to arrive at a just conclusion.

ITA 826 & 827/JP/2016_ 14 Sunil Kumar Paliwal Vs ITO

fetches higher price than of the next belt and so on. In this method the plot is divided into belts on the basis of distance from the main road and the value of such belts have to be determined separately.

Under this method the valuation of the land is done separately on the basis of comparable instances of sale of the plots and the cost of construction as prevailing is taken from which the depreciation looking to the year of construction is reduced. This method is normally applied in cases of compulsory acquisition.------------

---------- 21. In Debi Prosad vs. CWT (1977) 109 ITR 760 (Cal), the following principles were laid down for the valuation of immovable property under the WT Act :

(i) Attempt must be made to find out the price which the immovable property would fetch on the valuation date imagining a willing buyer to purchase the property from a willing seller in respect of the property;

(ii) In respect of the immovable property there is no fixed market such as market for shares or for other commodities, like sugar, cloth, etc. In order to arrive at a valuation in respect of the property, there must necessarily be certain element of guess. But the guess must be based on certain facts and according to certain principles which would be, in the facts and circumstances of each case, as fair as possible to the Revenue as well as to the assessee in trying to imagine reasonably and

ITA 826 & 827/JP/2016_ 15 Sunil Kumar Paliwal Vs ITO

intelligently the price which was expected to be fetched if it was possible to sell the property in question on the relevant valuation date.

(iii) Such a determination, therefore, involves adopting certain methods in determining the valuation and there are different kinds of methods, as mentioned in the circulars of the Board and the principles enunciated in the several decisions of the Court as noticed before.

(iv) Which one of the various methods would be suitable for a particular case must depend upon the nature of the property, the location of the property, the purpose for which the property is used and several other objective factors, viz., the time when the valuation is made, the prospect of buying and selling in respect of the property at the relevant time and also special features in respect of the property, if there be any. Taking all these factors into consideration it is, therefore, necessary to determine which one of the various methods will be most suitable to reach as accurate as possible guess as to the valuation on the valuation date.

(v) Another factor that has to be borne in mind is that such a method should be preferred which has more objective reliable data to rely upon than mere subjective opinions. For instance, if there are more objective data to work out in respect of one method more reliable than another, then that method for a particular land should be preferred. If, however, there is any objective reliable evidence of any transaction of sale of the land or property similar in quality or of the same type and in approximately same time then that would, however, provide more reliable method to follow.-------”

5.2 CWT vs. P.N Sikand (1977) 107 ITR 922 (SC)(DPB 1-8) wherein it was held that the valuation of the property should always be made after giving effect to the disadvantages attached to it. Therefore, when the leasehold interest in the land has to be valued, this burden or disadvantage attaching to the leasehold interest must be duly discounted in estimating the price which the leasehold interest would fetch. To value the leasehold interest on the basis that this burden or disadvantage was to be ignored would be to valve an asset different in content and qualify from that actually owned by the assessee.

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5.3 Kindly refer CIT v/s R.P. Kacholia (2016) 137 DTR 61 (Raj) (DPB 31- 34)

5.4 Also kindly refer Ravikant v/s ITO (2007) 110 TTJ 297 (Del Trib) in Para 9 (DPB 26-30)

Thus, whatever be the nature of the property, a due deduction of the disadvantages attached to the property has always to be reduced while valuing the property.

In the instant case, the drawbacks attached with the plot were odd size of the plot, illegal construction in the set back portion, common stairways, overhead water tank, the fact of the continued occupancy of the original sellers and the on-going litigation which was known to neighbors and property dealers, which factors were completely ignored by the AVO/DVO and ld. CIT(A) while valuing the property.

ITA 826 & 827/JP/2016_ 17 Sunil Kumar Paliwal Vs ITO

admitted by the ld. CIT(A). The ld. CIT(A) having admitted such an appeal, also admitted that the appellant was aggrieved by the addition which was based/consequent to the DVO’s report. Therefore also, the ld. CIT(A) could not have rested his decision solely on the report of the DVO. He was supposed to make his comment and grant relief, if thought fit. By not doing so and by not rejecting the specific factual and legal submission made duly supported by the binding judicial pronouncements, it has to be presumed that ld. CIT(A) had nothing to rebut/negate the same and hence his confirmation was completely contrary to the provisions of law and facts. Hence the impugned addition kindly be deleted in full.”

the property, I hold that basically the property was a residential property.

The property was let out but it was constructed in the back portion of the

plot of land. The District Valuation Officer has treated the property as

fully commercial, which is not justified. It is also a fact that no site plan

was sanctioned by the local bodies, which the assessee could submit to

the District Valuation Officer, therefore, the District Valuation Officer’s

observation was that the assessee did not file site plan is factually

incorrect. Further it is also important to note that to invoke the rent

capitalization method, the period of tenancy has to be considered.

Further the termination date of tenancy is also relevant factor to invoke

the rent capitalization method. The dispute with tenant is also very

relevant aspect which needs consideration while valuing the property.

No lease deed was executed with the bank due to dispute in the

ITA 826 & 827/JP/2016_ 18 Sunil Kumar Paliwal Vs ITO

property. The strong room facility was not constructed due to dispute

with the owner. It was only constructed in setback area illegally. Further

the stairways were common and other facilities like overhead water tank

were also common with part owner of plot, which reduces the fair market

value in terms of salable price and also in terms of the rent. It is also

important to note that the property was in dispute and the court cases

were going on. The assessees were residing outside the Jaipur. It was

difficult for them to travel to Jaipur every time to negotiate the deal

when they were senior citizens. The structure was very old as it was

constructed in 1972. Considering all these aspects, I hold that the District

Valuation Officer has not considered all these various aspects which has

direct bearing on the fair market value of the land on the date of

transfer. The facts of the case also suggest that it can be termed as

distress sale, therefore, the District Valuation Officer was not justified in

estimating the fair market value by adopting rent capitalization method,

therefore, I direct to delete the same.

Since the facts and issues are identical to the facts of ITA No.

826/JP/2016, therefore, similar submissions of the A.R. of the assessee

and similar findings of the Bench shall apply in this case also. Accordingly

the addition made and confirmed in this case is also deleted.

ITA 826 & 827/JP/2016_ 19 Sunil Kumar Paliwal Vs ITO 10. In the result, both the appeals of the assessees are allowed.

Order pronounced in the open court on 20/09/2017.

Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 20th September, 2017

*Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- 1. M/s Sunil Kumar Paliwal HUF, Ajmer. 1. 2. Smt. Tara Devi Paliwal, Ajmer. izR;FkhZ@ The Respondent- The ITO, Ward-2(1), Ajmer. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 826 & 827/JP/2016) 6. vkns'kkuqlkj@ By order,

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