ITAT Jaipur Judgments — May 2020

The Tribunal held that the sale consideration as agreed between the parties and reflected in the sale deed, which was Rs. 12,00,000/-, represented the correct fair market price of the property. The Tribunal noted that the DVO's valuation, based on DLC rates with only a 15% discount for a distressed sale, was not justified. The Tribunal found that the property was occupied by tenants at a meager rent, and legal disputes regarding possession were pending, which adversely affected its fair market value. Therefore, the addition made by the AO and sustained by the CIT(A) on this account was deleted. Regarding the cost of construction, the Tribunal observed that both the AO and DVO accepted the years of construction. The Tribunal found that the average of the indexed cost of construction claimed by the assessee and estimated by the AO would be a just and reasonable amount. Accordingly, the Tribunal directed the AO to recompute the LTCG by allowing the average indexed cost of construction, which came to Rs. 5,68,056/-. The appeal of the assessee was partly allowed.