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TMI Blog1986 (6) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... as in its opinion the fair market value of the property as on the date of sale was Rs. 4,38,328. For this difference in the apparent sale consideration and the fair market value as arrived at by the ld. Competent Authority, it had the reason to believe that the consideration for sale had not been truly stated in the instrument of transfer with the object specified in s. 269C. The notices were issued to the persons concerned and the present appellants filed objections asserting inter alia that Rs. 2,76,000 was the full consideration paid for the purchase of the property and that the ld. Competent Authority had no material before it to have necessary satisfaction as required by s. 269C for initiation of the acquisition proceedings. The ld. Competent Authority after hearing the appellants and taking into consideration the valuation report held that the fair market value of the property as on the date of the sale was Rs. 4,39,400 and pressing into service the presumption under s. 269C(2) hold that the consideration had not been truly stated for the purpose of avoidance of tax. Acquisition of the property was accordingly ordered. 4. In the present appeal, the ld. Counsel for the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 sq. ft. yds. (DDA sales Rs. 1,600 per sq. yd.) . I apply paid rate of Rs. 1,000 per sq. yd. . 200 * 1000 Rs. 2,00,000 Building : G.F. 1418 sq. ft.) 2112 . F.F. 694 sq. ft.) . Rs. 140 per sq. yd. 2112 * 140 Rs. 2,95,680 Boundary wall and gate etc. on estimate. Rs. 20,000 . Rs. 5,15,680 Less : Depreciation @ 1.5 per cent p.a. for 10 years i.e. 15 per cent Rs. 77,350 F.H.V. Rs. 4,38,330 The ld. counsel contended that the reasons consisted of a printed form in which certain figures regarding the valuation of the property have been incorporated and that the mention that the ld. Competent Authority made any enquiries about the valuation is incorrect and no enquiry whatsoever was made. The ld. Deptl. Representative could not point out what were the enquiries made by the ld. Competent Authority. As regards the calculation of the fair market value of the property, the ld. counsel contended that the ld. Competent Authority has determined the value of the land by adopting a rate of Rs. 1,000 per sq. Yard. After mentioning that the DDA rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86) 49 CTR (Del) 119 : (1986) 157 ITR 308 (Del) the Hon'ble Delhi High Court held that at the time of the initiation of the proceedings, no presumption was available to the Competent Authority and it must have material before it to show that the fair market value was more than 15 per cent of the apparent consideration. 7. Further apart from the mere difference in valuation, the Competent Authority has to have the further reason to believe that the consideration has not been truly stated in the instrument of transfer with the object of facilitating the reduction or revision of tax liability of the transfer of facilitating the concealment of any income or any moneys by the transferee. On this point the reasons recorded by the ld. Competent Authority do not throw any light and the ld. Deptl. Representative also could not point out any material on the basis of which a belief could be formed. The ld. Competent Authority did not even take trouble to enquire as to what was the real consideration for the sale and whether any of the transferees or the transferor was a taxpayer from before or was there any chance of their having understanding the consideration for avoidance of tax. For all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 900 per sq. yard. Apparently this was a very small area and would have more value. Further according to the map of the locality plot no. EA-19 is on the other end of the colony i.e. towards the main road while the plot in question E-31 is admittedly towards the extreme end of this colony and about 150 yards to the south of this property the colony ends and there are under developed agricultural fields and the Govt. Firing range. (2) Another property bearing No. C-43 built up on a plot of land measuring 500 sq. yards was transferred in Oct., 1984 in which the value of the land was declared at Rs. 950 per sq. yard. He does not know what was the extent of construction in that plot and how much was the open area. So far as the property in question is concerned, it is fully built up leaving no scope for further extension. The ld. Counsel for the assessee rightly pointed out that plot No. C-43 also has a better location as it is situate opposite a 3.80 acre area of open land meant for a school. (3) A vacant plot of land No. B-53 was sold on4th March, 1983. Rs. 1000 per sq. yard. This is about one year after the sale in question and is in respect of a vacant plot in which a purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e depreciation calculated by the Valuation Officer @ 1.5 per cent for 11 year is very low. On this point we think that the registered valuer was right in calculating the depreciation @ 2.5 per cent for 12 years. The calculating the market value of the property the Valuation Officer has adopted the rates fixed by the Public Works Department while it is common knowledge that private properties built under the personal supervision are much economical than the Govt. Ones. The registered valuer has valued the building at Rs. 1,16,000 and we are of the view that though there may be scope for little variations, this value is more nearer to the correct value of this property. 13. For the above reasons, we hold that it was not established that the fair market value of the property in question was more by 15 per cent than the apparent consideration of Rs. 2,76,000. It is also not proved that the apparent consideration has not been truly stated in the document of transfer. In our view, therefore, the property in question could not be acquired and the acquisition order has to be quashed. These appeals are accordingly allowed and the order of acquisition is hereby quashed. - - TaxTMI - TMI ..... 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