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TMI Blog2007 (9) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... ty from the situation angle. In our opinion, on this count also, the order is liable to be quashed and set aside. W.P. allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... tion officer and the notings dated February 8, 1988, of the Inspecting Assistant Commissioner have been considered by the appropriate authority. Four sale instances were cited as being on the same road and also in the vicinity of the building in question and further it was set out as "or in other equally posh and comparable localities". Two instances were on Abdul Gaffar Khan Road, Worli, being flat No. 501, Pratiksha where the transfer was effected on November 27, 1987, at the rate of Rs. 2,128 per sq. ft. built-up area. The second instance was flat No. 24, Vijay Villa the transaction was December 24, 1986, and the rate was Rs. 1,883 per sq. ft. built-up area. The other instances cited, one was flat in Alpha Apartments, Pochkhanwala Road and the transaction was of June 27, 1987, and the rate was Rs. 1,709 per sq. ft. built-up area and the last instance was flat No. 34, Neelkanth Apartment, Acharya P. K. D. Road, the transaction was of April 28, 1987, and the rate was Rs. 1,792 per sq. ft. built-up area. The petitioners replied the said notice by a letter dated February 4, 1993. The petitioners contended that respondent No. 3-transferor has herself purchased the flat by an agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also notings were neither considered nor dealt with. At the hearing of this petition, on behalf of the petitioners it is submitted that in the show-cause notice it was mentioned that the site inspection had been done, the valuation has been done by the valuer and further notings had been made by the Inspecting Assistant Commissioner on February 8, 1988, which had been considered by the members of the appropriate authority. The grievance of the petitioners that the same were not made available to them or neither dealt with nor answered. It is, therefore, submitted that the order passed is in violation of the principles of natural justice and fair play and must be set aside. It is next submitted that respondent No. 1 had to arrive at a finding as to the fair market value of the flat to be compulsorily acquired. In the instant case, the respondents have not arrived at a fair market value. The object of determining the fair market value was to raise a presumption in favour of the Revenue, that the fair market value differs by 15% from the consideration as shown in the document of transfer and as such, it is presumed that there is an attempt to evade tax and significant undervaluat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --not only those which are connected with the technical features of the building, including its age, its soundness, its structural strength, but also takes into account the other relevant factors like the planning of the building, the let out of the building, the surrounding of the building, the view available from the buildings, as also demerits and/or disadvantages that are associated with any such buildings/flats. After such report is obtained, the three members of the appropriate authority individually go through the file and take a prima facie decision based upon their own experience, their own sources of market that they have acquired by virtue of their experience and knowledge of working in the field for at least a couple of years and the knowledge about the area and the importance of the area in the life of the city--in brief all factors which are relevant though obviously may have a subjective colour which is inevitable. After this process of individual evaluation, a meeting is held of the three members of the appropriate authority, who are seized with the relevant material and documents, and, if the committee feels that there exists a prima facie case to suspect that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice to which annexure "A" was added, specific reference was made to the earlier order passed. In that it was set out that the valuation officer had inspected the flat in question on August 2, 1988, and later on inspection was done by the members of the appropriate authority on February 12, 1988. Those reports have been considered by the appropriate authority. A grievance was made that the valuation officer's report and the notings of the Inspecting Assistant Commissioner have not been furnished to the petitioners. The petitioner had made a grievance in the reply to the show-cause notice. As we have noted earlier, for an order under section 269UD to be passed the authority must come to a prima facie conclusion that there is undervaluation of the consideration to the extent of 15% of the fair market value so as to raise a presumption that it was being undervalued for the purpose of tax evasion. Admittedly, in the instant case, it was informed to the petitioners that they have a valuation report and also the report of the site inspection. There is nothing in the order which will indicate as to the fair market value which was arrived at by respondent No. 1 though four sale instances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout making available the documents relied upon by the appropriate authority renders the order arbitrary, being passed contrary to the principles of natural justice and fair play and must consequently be set aside. We may now deal with the next contention as to the fair market value. We earlier explained, considering the judgment of C. B. Gautam [1993] 199 ITR 530, the need to determine the fair market value. It may not be out of context to reproduce the following words of the Supreme Court (headnote) : "Although a presumption of an attempt to evade tax may be raised by the appropriate authority concerned in a case where the aforesaid circumstances are established, such a presumption is rebuttable and this would necessarily imply that the concerned parties must have an opportunity to show cause as to why such a presumption should not be drawn". In the instant case, admittedly, fair market value was not determined. However, reference was made to four sale instances. There is nothing before us to indicate the nature of these four transactions. We have similarly nothing before us as to why the appropriate authority arrived at a conclusion that the sale instances relied upon were not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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