The Kolkata bench of Income Tax Appellate Tribunal ( ITAT ) directed to delete additions made in respect of capital gain by adopting the value of property as per DVO report.
The Assessee Arijit Chakraborty sold a property for the financial year 2004-05. During the assessment proceedings the Assessing Officer referred to the Departmental Valuation Officer who estimated the cost of the market price of the property at the time of sale transaction at Rs.73,26,350/-. However, the assessee had sold the property at Rs.30,00,000/- only.
On being asked to explain in this respect, the assessee had submitted that the property, in question, was a cinema hall and certain members of political party were preventing the assessee from peaceful use and enjoyment of the said property. The assessee, therefore, to get rid of the continuous harassment and day to day problems, had made distressed sale of the property at Rs.30,00,000/-.
However, the said contention of the assessee did not find favour with the Income Tax authorities and even before this Tribunal. The assessee thereafter filed an appeal before the High Court. Who remanded back the matter to the Tribunal with a direction that to examine this issue in the light of the evidences,
Accordingly the High Court set aside the matter back to this Tribunal to consider the valuation aspect in accordance with law by a reasoned order within one year from the date of communication of the order
Before the tribunal Souvik Guha, the counsel for assessee submitted that the assessee was prevented from peaceful use and enjoyment of his property by certain persons/members of political parties.
The employees of the cinema hall were hand in glove with the agitators and the assessee faced several problems. The problems of the assessee continued over the years and the assessee during the period has made sincere efforts by approaching the different authorities and requested them to stop the agitators from preventing the assessee from peaceful enjoyment of his property and running the cinema hall. Under the circumstances, to get rid of the problem, sold the property at a lower rate.
B. K. Singh, Department representatives supported the decision of assessing officers.
The tribunal observed that the assessee as a prudent seller to get rid of the long time and continuous harassment due to interruption and obstacles of miscreants in peaceful use and enjoyment of the property, has made a distress sale of the property at Rs.30,00,000/
After analyzing the submission of both parties the bench comprising Sanjay Garg ( Judicial Member ) and Girish Agrawal, ( Accountant Member ) held that addition made by the Assessing Officer in respect of capital gains by adopting the value of the property as per the DVO report is ordered to be deleted.
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