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TMI Blog1996 (6) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax and the one dated January 6, 1994, sent by the executive engineer working under the appropriate authority, Calcutta, and to issue no objection certificate. This judgment shall also govern the disposal of Matter No. 1192 of 1994, pending on the original side of this court. Respondent No. 6, Chengmari Tea Company, is a private limited company. Respondent No. 6, is the petitioner in Matter No. 1192 of 1994. The petitioner, Ranjit Kumar Banerjee, owns premises No. 29A, Ballygunge Circular Road, Calcutta (hereinafter referred to as " the premises "). The premises comprise an area of 1 bigha, 8 cottahs, 10 chittacks and 75 sq.ft. together with buildings and structures standing thereon. The petitioner is in occupation of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et value of the lands situated at Ballygunge Circular Road, was more than Rs. 10 lakhs per cottah. Pursuant to notice dated December 17, 1993, the petitioner and respondent No. 6 appeared before the appropriate authority and filed reply (annexure " E "). It was pointed out in the reply that the petitioner had not been given a copy of the relevant documents on the basis of which respondent No. 1 had arrived at a tentative conclusion. The objection went unheeded and respondent No. 1 thereafter passed the impugned order under section 269UD(1) of the Income-tax Act. The order was communicated to the petitioner, vide letter dated January 4, 1994. The same was received by the petitioner on January 6, 1994. A copy of the impugned order was suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40 per cent. of the constructed area would be Rs. 36 lakhs. The value of roof rights (10 lakhs) plus cash payment of Rs. 27 lakhs would in substance come to Rs, 3.24 crores. Thus, the total apparent consideration would thus be Rs. 3.24 crores. It has been urged by counsel for the petitioner that the appropriate authority arbitrarily reduced the cost of building by ten per cent. because the construction would be carried out by the owners themselves. This is strange indeed, under section 269UA(b)(2)(iii) of the Income-tax Act, which applies to this case, clearly speaks of the aggregate of the price that such thing or things would ordinarily fetch on sale in the open market on the date on which the agreement for transfer is made. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Act and instead of assessing the cost of the building on the basis of the market value, based it on the cost of construction minus 10 per cent. on the ground that respondent No. 6 was an efficient contractor. For the reasons discussed above, this finding is not only arbitrary but perverse. (2) The Revenue did not enclose a copy of the report of the executive engineer along with the show-cause notice. It would be pertinent to quote the observations of a Division Bench of the Bombay High Court in Nirmal Laxminarayan Grover v. Appropriate Authority (Income-tax Department) [1997] 223 ITR 572 which runs thus : " The petitioner is, therefore, clearly prejudiced in her defence since the relevant material upon which the prima facie view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 3,000 sq. feet area should be assessed on the basis of 12 1/2 per cent. per annum return on the market price of the flat (see Special Land Acquisition Officer v. Veerabhadarappa (P.) [1985] 154 ITR 190 (SC)). This contention of learned counsel appears to be reasonable. Similarly, the Revenue also failed to take notice of roof rights and the rights of ownership over the covered and open car parking space. If 40 per cent. of the constructed building's basement is to be used as garage, the value thereof would far exceed Rs. 2 lakhs, which was inadvertently not mentioned in the Form No. 37-I. I need not go deep into these matters. Thus, I conclude that the notice being bad and calculation made in the impugned order being based on wrong assu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of particulars are submitted by the parties concerned in the prescribed Form No. 37-I as required under section 269UC of the Act read with rule 48L of the Income-tax Rules, 1962. Moreover, on the merits, we have shown how the land rate of Rs. 225 per sq. feet (or its discounted rate of Rs. 221 per sq. feet) for the suit land is not grossly understated in the sense that its fair market rate would be more by 15 per cent. or above as compared to the said land rate. The above submission made on behalf of the respondents cannot thus be accepted." The aforesaid observations equally apply to the circumstances of the present case on all force. Similarly, one of the judges of this court in the case of Dwarkanath Chatterjee v. Union of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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