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TMI Blog2005 (1) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... stances under which the present appeals arise are as follows. The assessee is an individual. He was the owner of a property at 63, Najafgarh Road, New Delhi. This property measures 11.97 acres. The dispute in the present appeal is with regard to the valuation of this property. This property was originally in the possession of one Shri K.N. Modi who entered into possession by virtue of an agreement dt., 22nd May, 1949, with the Delhi Improvement Trust for purchase of the said property. The said Shri K.N. Modi by agreement dt. 25th Aug., 1949, transferred the right in the said land under the agreement with Delhi Improvement Trust in favour of the assessee. The assessee thereafter leased out the entire property to a company by name M/s Virmani Industries (P) Ltd. (VIPL for short) w.e.f. April. 1957, for a lease rent of Rs. 18,000 per year. The Delhi Development Authority who was a successor to Delhi Improvement Trust on 26th Aug., 1970, conveyed title in respect of the property to the assessee. The assessee again entered into a lease agreement on 6th May, 1980, with VIPL in respect of the entire property excluding an area of 4,219 sq. yards and 5,778 sq. yards which had been compulsor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Property Act and would be considered as tenants holding over. In the opinion of the CWT(A), these factors would be very relevant for determining the valuation of the property and he, therefore, set aside the order of the WTO to examine all these aspects before determining the value of the property. In the assessment proceedings before WTO after the order of the CWT(A), reference was made to the DVO by the WTO. The DVO informed the WTO on 27th March, 1997, that since the assessee was not co-operative it was not possible for him to file a report by 31st March, 1997. In this situation, the AO again held that the facts remained same and, therefore, the value adopted in the original assessment at Rs. 25,43,14,567 for both the assessment years deserved to be determined again. It, however, transpired that after the completion of the assessment by the WTO, the DVO by his letter dt. 6th June, 1997, informed the WTO that he had carried out physical inspection of the property and found that no part of the property was in possession of the assessee and that the entire property was in possession of the sub-tenants. The DVO also expressed his opinion that the valuation of the property has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty and the value of the property should be determined by applying a rate of Rs. 5,250 per. sq. mtr. The DVO's report was forwarded by the CWT(A) to the WTO for his comments and he expressed the opinion that the conclusions of the DVO as given in his report dt.25th Nov., 1997, should be accepted. 7. On consideration of this material the CWT(A) held as follows: (a) The assessee, though was the owner of the property, VIPL had put up the construction and was the owner of the superstructure. The fact that the assessee was a director of VIPL was not enough to justify a conclusion that the transaction of lease was not genuine. (b) That VIPL had sublet the property to 36 tenants and that those tenants were in physical possession of the property and that these tenants were entitled to protection under the Delhi Rent Control Act and were also tenants holding over by virtue of provisions of s. 116 of the Transfer of Property Act. This portion in occupation of tenants was directed to be valued by applying the yield method based on rental value of the property. With regard to vacant portions of the property marked "X" and "Y" in the plan filed by the DVO, the CWT(A) held that the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, while relying on the order of the CWT(A) in respect of the valuation of the property excluding property marked as "2" in the plan, of the DVO, submitted that in respect of property marked "2" in the plan, there was nothing to show that this was in the possession and control of the assessee. According to him, the fact that the entire property has been leased out to VIPL having been accepted, there was no evidence on record to suggest that the assessee had got back possession from VIPL in respect of the area of 1,847.70 sq. mtrs. marked "2" in the plan of the DVO. According to him, the tenant would still be entitled to be regarded as a tenant for the purpose of rent control legislation and also a tenant holding over under the Transfer of Property Act. It was also submitted during the assessment proceedings after it was set aside by the CIT(A) (that) the DVO had filed a report dt. 6th June, 1997, wherein he had clearly admitted the fact that the entire property was in possession of the tenants and no part of the property was in possession of the assessee. According to him, there was no power for the CWT(A) to have made a reference to the DVO in the course of the appellate proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the portion marked as "Z" in the plan annexed to the report of the DVO measuring 1,847.70 sq. mtrs. was lying vacant, but was surrounded by a compound wall, The entire property had been leased out to VIPL. Even assuming a portion of it was lying vacant and surrounded by a compound wall, it cannot be said that VIPL does not have any right or interest over this vacant piece of land as a lessee. The CWT(A) seems to have gone by the. fact that the lease agreement between the assessee and VIPL had also expired in 1989 and, therefore, VIPL cannot claim any rights over this vacant piece of land. There is no basis to come to such a conclusion. As a tenant holding over, VIPL would be entitled to have all the rights as a tenant. There is no evidence on record to show that this piece of vacant land had come back to the possession of the assessee free from the leasehold rights of VIPL. The fact that the Delhi Rent Control Act would not apply to a vacant land is not enough to come to the conclusion that the assessee was in possession of this piece of land. As already stated, as a tenant holding over, VIPL was entitled to be in possession of this vacant land also. Since there was nothing on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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