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TMI Blog1987 (2) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... 9D of the IT Act. The parties took objections to the same and ultimately the IAC was satisfied that the market value of the property in dispute on the date of sale exceeded the sale-price by more than Rs. 1 lakh and by more than 25 per cent of the said consideration and the same had been done with a view to facilitate or evade the liability of the transfer or to pay proper tax and facilitate concealment of income or moneys, assets whereof had not been declared by the transferee within the meaning of s. 269C (1) of the IT Act. He, therefore directed the acquisition of the property. Both the seller and purchaser have come up in appeals before us. 2. We have heard the representatives of the parties at length in both these matters. On behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made with a view to avoid liability for any tax or conceal any income. Next it has been contended that the authorities below had relied upon the rent which was stated to be payable by the tenant introduced into the premises long after the sale in question which could not have been taken into consideration for determining the market value of the property in dispute, because it was the income that was being earned by the transferor at the time of sale on which the rent capitalisation method could have been supplied if at all to estimate the fair market value of the property. If the rent fixed for the property in question after the date of sale was a relevant factor to compute the market value of the property, the tenant should be deemed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in respect of furniture and machinery than a building only. The gross yearly rent of the cinema is Rs. 90,000 out of which Rs. 81,034 has been capitalised by the Valuation Officer. This figure is certainly very high because even in cases of urban properties, the depreciation whereof is small usually 1/6th deduction on account of repairs is allowed besides collection charges and other payments. Even the lease the deed of the property in question shows that according to the agreement the lessor had to get repaired and redone all the furniture, fixture and fittings of the cinema and get the machines in perfect working order at his own cost before handing over the possession of the premises to the lessee and if the machine did not work pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IAC was not justified and more effort should have been made by him to find out the true market value of the property having regard to the facts and circumstances of the case. While we agree with the Department that the subsequent rent of the property could be considered for the purpose of estimating the fair market value of the property at the time of sale, all the other factors which we have pointed out above should also have been considered alongwith it. It would also have been appropriate if the new tenant was served with the notices of these proceedings so that he could explain the circumstances under which he agreed to pay higher rent and the extent to which he could run the cinema profitably after paying the rent amount in question. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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