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Issues:
1. Appeal against order of Income-tax Appellate Tribunal quashing acquisition of property. 2. Valuation of land for acquisition under section 269H of the Income-tax Act, 1961. 3. Competent authority's reliance on District Valuation Officer's report. 4. Discrepancies in valuation methods used by District Valuation Officer. 5. Tribunal's decision on initiation of acquisition proceedings. Analysis: The appeal before the High Court involved challenging the order of the Income-tax Appellate Tribunal that quashed the acquisition of a property based on valuation discrepancies. The Deputy Commissioner of Income-tax filed the appeal under section 269H of the Income-tax Act, 1961, against the Tribunal's decision. The property in question was purchased by the assessee-respondent for Rs. 23,18,750, but the District Valuation Officer determined the fair market value at Rs. 40,01,200. The transferee objected to this valuation, citing discrepancies in the valuation method used by the District Valuation Officer. The competent authority rejected the objections and initiated acquisition proceedings under Chapter XXA of the Act, leading to the appeal before the Tribunal. The District Valuation Officer's valuation method was based on land rate derivation and development method, resulting in a fair market value of Rs. 40,01,200. However, the transferee argued that the development method was incorrect as the land was intended for a residential complex with a maximum profit of 15%, not the 70% yield assumed by the District Valuation Officer. The Tribunal found fault with the initiation of acquisition proceedings, stating that the fair market value determination should have considered comparable sales in the same locality, which were lacking in the District Valuation Officer's report. Without evidence of a 15% difference between the market value and apparent consideration, the acquisition proceedings were deemed improper. The High Court upheld the Tribunal's decision, emphasizing the importance of using appropriate valuation methods based on comparable sales and accurate yield percentages. The District Valuation Officer's valuation lacked proper basis and evidence, leading to the invalidation of the acquisition proceedings. The Court dismissed the appeal, affirming the Tribunal's ruling and highlighting the necessity for cogent evidence to support fair market value determinations in acquisition cases under the Income-tax Act, 1961. This detailed analysis outlines the key issues addressed in the judgment, including valuation discrepancies, reliance on valuation reports, and the legal requirements for initiating acquisition proceedings under the Income-tax Act, 1961.
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