ITAT rejected valuation of property done by approved valuer without considering infrastructure facilities

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ITAT rejected valuation of property done by approved valuer without considering infrastructure facilities

Facts:
a) During the year under consideration, the assessee sold a property and received Rs. 50 lakhs towards sale consideration. However, the Assessing Officer (AO) adopted the sale consideration under section 50C at Rs. 90.20 lakhs.
b) Matter was referred to DVO who estimated value of the property at Rs. 81.68 lakhs as against guideline value of Rs. 90.20 lakh.
c) In instant appeal the assessee contended that she had filed a report from an Approved Valuer who estimated the cost at Rs. 50.40 lakhs. The land was situated in the interior area and there was no proper approach to road, therefore, the Approved Valuer had rightly valued the property at Rs. 50.40 lakhs.
The Tribunal held in favour of assessee as under:
1) A perusal of the Departmental Valuation Officer’s report shows that the method prescribed under the Wealth tax Act was not followed. Moreover, the factors such as the location of property, availability of infrastructure facility around the area, potential development in the near future, accessibility to the infrastructure facility such as road, airport, educational institutions, etc., were not properly considered either by the Approved Valuer or by the Departmental Valuation Officer.
2) In those circumstances, relying upon both, the Valuer’s report would not reflect the correct fair market value of the property, therefore, when the assessee claimed that what was received was only Rs. 50 lakhs, the Approved /Registered Valuer estimated the property at Rs. 50.40 lakhs and the Departmental Valuation Officer estimated at Rs. 81.68 lakhs, the Tribunal was of the considered opinion that estimation of value of the property after considering the infrastructure facilities and other factors as referred to above, at Rs. 69 lakhs would meet the ends of justice.
3) Accordingly, the orders of both the authorities below were modified and the AOwas directed to take the sale consideration of the property at Rs. 69 lakhs and thereafter compute the capital gain.   – [2018] 97 taxmann.com 640 (Chennai – Trib.)

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