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TMI Blog1985 (10) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... deed from the said Shri B. Vardha Reddy on 8-6-1979. It is the claim of the assessee that even under the agreement which he obtained in 1962 he was given delivery of possession of the land purchased. He divided the land into 14 plots and sold them for a value of Rs. 46,019. The sale value of the plot is taken at Rs. 10 per sq. yard. It is also the claim of the assessee that he paid Rs. 5 per sq. yard as brokerage commission to Mrs. V. Sujatha, No. 5-31, Malkajgiri, Secunderabad. It is also the claim of the assessee that he became the absolute owner of the land even in 1962 as soon as he obtained the agreement of sale on 1-5-1962. Therefore, only long-term capital gains are to be computed over the sale of the plots made by him. Each plot co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btained the regular registered sale deed i.e., on 8-6-1979. It is the contention that the Land Reforms Tribunal while deciding the appeal of Shri B. Vardha Reddy held that the assessee perfected his title over three acres 37 guntas in survey Nos. 37 and 38 of Malkajgiri village. The AAC found the assessee to be in possession of the property right from 1962 onwards and he had accepted the contention put forward on behalf of the assessee that he had perfected his title by adverse possession against Shri B. Vardha Reddy by remaining in possession of the land in survey Nos. 37 and 38, Malkajgiri for a continuous period of 12 years. As regards the value of the land he held that estimating the sale price of each sq. yard at Rs. 30 is on high side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeared to have filed before the Land Reforms Tribunal copy of the agreement which is marked as Ex. A15, Pawti book and 8 LR receipts which were marked as Ex.A14 and a receipt having paid consideration which is marked as Ex.A13. The assessee also appeared to have filed Pahanis for the assessment years 1962-63 to 1974-75 with a certificate of the Tehsil office that Pahani for 1973-74 was not available. Having considered the matter before it, the Land Reforms Tribunal recorded a finding that Shri Shyamala Rao had perfected his title over survey Nos. 37 and 38 measuring 3 acres and 37 guntas by being in continuous possession for 12 years and, therefore, he deleted the said expenditure from the holding of the declarant. Shri Madhava Rao, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Reddy who was the declarant before the Land Reforms Tribunal. But the said order by no stretch of imagination can operate as a judgment in rem. It does not create any right in the assessee which can hold good against the whole world. In our humble opinion, this order does not bind the revenue, in this case which was not a party before the Land Reforms Tribunal. Further the order is not binding against this Tribunal. According to us, the finding in the order that the assessee perfected his title by adverse possession, by being in possession of the property continuously for 12 years, is erroneous. Our reasons are as follows. 8. Admittedly the assessee entered into an agreement of sale with regard to these two survey numbers on 1-5-1962 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, a trespasser or a person without title. In A. Krishnaswamy's Law of Adverse Possession, 1985, Tenth edn., the learned author states as follows: "A possession which can be referred to a lawful title cannot be considered adverse. When possession can be referred to a right consistent with the substance of ownership in it at its commencement, it must be referred to that right rather than to a right which contracts the ownership. If the possession was not adverse in its inception, it is presumed to continue as it began. It is now well settled that a permissive possession cannot be converted into an adverse possession unless it is proved that the person in his possession asserted an adverse title to the property to the knowledge of the true ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les having been made within three years from the date of this sale deed the resultant capital gains can be only short-term capital gains but not long-term capital gains. Thus, the revenue's appeal should succeed. 10. Now coming to the question of valuation which is the subject-matter of the assessee's appeal we have already stated that the sale price accepted by the assessee is Rs. 15 per sq. yard from which the ITO conceded Rs. 5 per sq. yard as brokerage commission. Having duly taken into consideration a comparable case he had determined the sale price at Rs. 30 per sq. yard. The AAC reduced it to Rs. 25 per sq. yard. It is claimed that the assessee is only a school teacher working elsewhere and happened to sell the land ultimately with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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