9911796707
TMI Blog1997 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... UD of the Income-tax Act in the prescribed form from the appropriate authority. On October 28, 1991, the valuer of the Income-tax Department had directed the petitioners to produce certain documents relating to the property in question. The said direction of the Valuation Officer was complied with by the petitioner. On December 17, 1991, the petitioners received an order from the appropriate authority informing the petitioners that their property had been acquired for purchase by the Central Government under section 269UD(1) of the Income-tax Act, 1961, and had become vested in the Central Government from that date. Another order was passed on December 16, 1991, and was also sent to the seller, Sri Manoj Lal, respondent No. 3, calling upon him to deliver possession of the aforesaid property within 15 days to the Central Government. The Valuation Officer, Meerut, was directed to take over the aforesaid property, i.e., Plot No. 404, Sector-XVA, Noida, vide letter dated December 17, 1991. As no opportunity was afforded to the petitioner before acquiring the said property, the petitioners moved this court. This court, vide its judgment and order dated July 19, 1994, was pleased to dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k. None of the plots sold during the said period fetched a better price than that at which the petitioners agreed to purchase the said property. According to the petitioners, the rate prevailing for the said plots ranged between Rs. 1,800 and Rs. 2,700, whereas the petitioners finalised the negotiation at Rs. 3,200 per sq. mtr. The valuation report was biased and based on hearsay without any relation and nexus with the prevailing market rate. The report as such was arbitrary and based on erroneous and irrelevant considerations. For better appreciation of the case, the petitioners submitted as annexure " 4 " the details of registrations done of several plots during the said period. The same are set out hereinbelow : The details of registrations done at the office of the Sub-Registrar, Noida, of residential plots in Sector-XV-A., Noida, during the year 1991 : Date Plot No. Area Amount Document No. Rate/sq.(Rs) 15-1-1991 80 450 sq.mtrs. 8,10,000 205-211 1,800 4/2/1991 238 450 sq.mtrs. 12,20,094 638-639 2,710 20-2-1991 450 200 sq.mtrs. 4,70,000 908-909 2,350 6/4/1991 291 200 sq.mtrs. 4,69,000 1522-1523 2,345 2/5/1991 330 200 sq.mtrs. 3,09,000 1879-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed air whereas the property situated on a very narrow road surrounded by houses on all sides would necessarily be of lesser value. In support of the aforesaid contention, counsel for the petitioners relies on a decision of Shrichand Raheja v. S. C Prasad [1995] 213 ITR 33 (Bom), at page 50, wherein it was held as follows : " The principles to determine the fair market value of property are well-settled by a catena of decisions of the Supreme Court. The principles are adopted while determining the compensation payable in respect of property acquired under the Land Acquisition Act, 1894. The determination is to be made on the basis of what a hypothetical purchaser willing to purchase land from the open market and prepared to pay a reasonable price would offer. It has to be assumed that the vendor is willing to sell the land at a reasonable price. While determining the price, normally the authority has to take into account genuine instances. The most comparable instances out of the genuine instances have to be identified on the consideration of proximity from the time angle and proximity from the situation angle. After identifying the instances which provide the index of market valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be determined. It cannot be a wooden rule. Different methods and approaches, necessary in the context of different statutes under which the market value of an asset has got to be determined, pose difficult problems. The market value has got to be fixed with reference to the particular statute. The approach will differ, according to the nature of the statute, between fiscal statutes or non-fiscal statutes. Among the non-fiscal statutes, the Land Acquisition Act is an important legislation. Among the fiscal statutes, the Income-tax Act, the Wealth-tax Act, the Gift-tax Act, the Municipalities Act, etc., are important. In fixing the market value of a particular asset or property, the approach and analysis are likely to vary according to the subject-matter of legislation. The principles that are ordinarily applied in the case of non-fiscal statutes like the Land Acquisition Act cannot be applied mechanically to cases arising under the fiscal statutes." (see also [1995] 214 ITR 623). In Debi Prosad Poddar v. CWT [1977] 109 ITR 760 (Cal), his Lordship Mr. Justice Sabyasachi Mukharji (as he then was), was pleased to summarise the principles of valuation of immovable property in the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hubans Narain Singh v. U. P. Government, AIR 1967 SC 465, it was observed by the apex court that the value to be ascertained is the price to be paid for the land in all its potentiality and with all the use that can be made by the vendor. The last case cited by the petitioner's counsel is Krishna Kumar Rawat v. Union of India [1995] 214 ITR 610, at page 619 where the hon'ble Justice V. K. Singhal of the Rajasthan High Court has observed as follows : " The principles for valuation in respect of an immovable property under the Wealth-tax Act or other taxation laws are different from the principles which are applicable to acquisition proceedings. The proceedings under Chapter XX-C are akin to acquisition proceedings and not to the valuation principles which are applicable for assessing the tax on the basis of the valuation of the property. The valuation has no doubt to be made objectively and not on the subjective satisfaction of the appropriate authority. The figure which is arrived at has to be based on the material on record. There may be a certain element of arbitrariness while estimating the market value and it is for that reason alone, that without there being any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities have relied on extraneous and irrelevant materials and have compared non-comparables whereas they have failed to compare the comparables. Relevant considerations such as the location of the land, the frontage, the transport facilities, the proximity of the market and open area in front were not considered at all by the appropriate authority. Further, deliberately, illegally and in violation of the method of valuation and perversity the authorities failed to consider the comparable plots sold during the period which fetched lesser price. Counsel for the respondents, however, relying on the aforesaid decisions submitted that the authorities have acted fairly on the basis of the evidence available to them and have considered all the relevant factors in order to reach a conclusion and have passed an appropriate order under section 269UD (1). Counsel relies on the counter-affidavit filed by one Pramod Kumar, the Deputy Commissioner, Income-tax, on behalf of the appropriate authority and particularly draws our attention to paragraph 11 of the said counter-affidavit and also draws inspiration from his arguments that proximity to the commercial complex and club rather decreases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purposes of valuation of the market value of the property. The only basis for the said order appears to be that one property in Sector XV-A was sold at a higher rate during the said period. No attempt was made by the appropriate authority to consider any relevant or cogent factors relating to the said property with the property in question. There was total non-application of mind. The authorities have failed to establish any nexus with the evidence on record. In our view the authorities should have identified the instances which provide the index of the market value, the price reflected therein could be taken as a norm and the value of the land in question should have been reduced by making suitable adjustment for the plus and minus factors, vis-a-vis, the land under consideration by placing the two in juxtaposition, the plus factors such as proximity to a road, regular shape and size, openness of the plot, the proximity to the commercial area while minus factors are situation in the interior at a distance from the road, narrow road, frontage, surrounded by buildings on all sides, no scope of free air and such special disadvantageous factor which would go to determine the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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