Will loss of the original deed diminish value?
The IT Department acquired a property at Gandhi Nagar in Chennai when the agreement for sale relating to the property was submitted for getting the ‘No Objection’ certificate. This was done on the ground that the apparent consideration was less than the market value. The department made an assessment and found that the difference between the market value and the registered value was more than 15 per cent.Online GST Certification Course by TaxGuru & MSME- Click here to Join
The parties involved submitted that one of the reasons for the reduction in price was that the original title deed of the property was lost and the buyer was willing to take the risk and make alternative arrangements for it.
The additional cost so incurred was adjusted in pricing of the property. However the department overruled this and acquired the property.
The parties appealed (289 ITR 61 ( Mad) Ashok Leyland Finance Ltd vs Appropriate Authority, IT Department, judgment dated 12-12-2006 ) and a single judge dismissed it. The parties subsequently appealed against the order of the single judge.
The division bench set aside the order of the single judge and also quashed the pre-emptive purchase by the IT Department. The High Court observed that the loss of title deed of the property was one of the relevant factors and it would undoubtedly diminish the value of the property.