9911796707
TMI Blog1996 (3) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... from Dhyaneshwar Paduka Chowk (Pune). March 22, 1996 : The PUC is an open plot of land abutting 25 ft. wide Dattatrai Dhondiba path connecting DP Road and Ghole Road. These two roads merge into Fergusson College Road. According to the competent authority, the PUC is located in a prime residential area, having frontage of 16.65 mtrs. and is a retainable vacant land under the Urban Land (Ceiling and Regulation) Act, 1976, the vendor's title in respect of the PUC is clear and free from encumbrances. As per Income-tax Rules and law, the discounted value of the PUC comes to Rs. 71,79,430, which gives a net land rate of Rs. 10,335 per sq. mtr. The competent authority issued a detailed show cause notice as required under section 269UD(1A) of the Act, placing reliance on certain comparable sale instances (hereinafter referred to as "the SIP"). Extracts of important points in the comparable sale instances are as under : (1) The members of the appropriate authority considered a plot of land located at CTS No. 12190, Shivajinagar. The land area of the SIP 1 is 887 sq. mtrs. on which there is a small built-up bungalow admeasuring 199.66 sq. mtrs. and a garage admeasuring 33.4 sq. mtrs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an existing building having built-up area of 659.89 sq. mtrs. Since the developers were going to demolish the existing building, the scrap value of the structure was estimated at Rs. 2,87,600. After deduction of the same from the discounted consideration of Rs. 1,79,46,795 (the stated consideration is Rs. 1,85,00,000), the land rate of this SIP-2 was calculated at Rs. 23,181 per sq. mtr. As per another computation mentioned in the notice, after deducting the depreciated value of the building, the net land rate was calculated at Rs. 20,726 per sq. mtr. This SIP-2 is located 1.5 kms. away from Deccan Gymkhana Chowk and abuts 30 ft. wide Kelkar Road which connects Fergusson College Road and Apte Road. It is about 250 mtrs. off Fergusson College Road and 150 mtrs. off Apte Road. The competent authority has mentioned in the notice that this SIP-2 is similar and comparable with the PUC as well as SIP-1. The land rate of the PUC as compared to SIP-2 is understated by Rs. 12,846 per sq. mtr., i.e., by 125 per cent., as mentioned in the notice. However, it is also stated in the notice that the difference between the PUC and the SIP-2 is that the purchaser is a commercial organisation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ots of restrictions on the design and layout of flats to be constructed, and there is hardly any scope for construction of luxurious flats with modern layout. It is also pointed out that the approach road is from the west side, which is the wind direction and, therefore, the flats on the rear side (east) will have light and ventilation problem. From the north and south sides, the PUC is surrounded by multi-storeyed buildings, and, therefore, open terraces attached to the flats shall have less commercial value as the terraces will have no privacy. It is also pointed out that on the eastern boundary, there is a large police colony (Shivajinagar police lines) and due to the large number of persons staying there, there is environmental, cultural and social constraints as a result of which the properties in this area are not commanding a good price and the area is not preferred by aristocrat people. It has, therefore, been pointed out that the properties coming on this lane, do not command a good price whereas the rates of the properties even on the adjoining lane command a good price. Hence, it is pointed out that the instances cannot be blindly followed. The transferee, therefore, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng constructed in the year 1985, which is used as a hospital and can be converted into a hotel with certain renovations. In the absence of any evidence that the building is to be demolished, even the land rate arrived at on such assumption is erroneous, as pointed out in the reply. It has further been pointed out that SIP-2 is purchased by a group running chains of hotels in different aristocrat localities in Pune and they have paid a premium price to purchase this property and the land rate of that property cannot be compared with that of the PUC. As regards SIP-3 it has been pointed out that the same is situated on Karve Road, about 2 kms. away from the PUC. The locality is totally different from that not only of the PUC but also of SIP-1 and SIP-2 and the price equations are entirely different. Referring to the restrictions in the agreements, it is pointed out that professional offices and consulting rooms, which are in great demand in the city, can be constructed. It has further been stated in the reply that the purchaser is a Bombay-based builder who wants an entry in Pune and in such circumstances, this instance is not a normal business transaction. As against the instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority rejected all the contentions raised by the petitioner and held that SIP-1 is fully comparable with the PUC and is more advantageous because the PUC is free from any drawback and encumbrances whereas SIP-1 had drawbacks and encumbrances. The learned advocate, Mr. Soparkar, also contended that the contentions raised by the petitioner with regard to SIP-2 were also rejected holding that the only advantage of SIP-2 is that it has a potential for use as a hotel and for this factor a discount of 30 per cent. has already been considered. The appropriate authority further rejected the claim that the rate of SIP-2 is only for built-up area and held that in the show-cause notice it was made clear that even if the depreciated value of Rs. 21,57,500 of the building is deducted, the land rate would come to Rs. 20,726 per sq. mtr. Mr. Soparkar, the learned advocate, for the petitioner, submitted that the amount of consideration of SIP-2 as mentioned in-the agreement is Rs. 1,85,00,000. Even on the date of consideration, the value of the building was Rs. 21,57,000 and the net value of the land would be Rs. 1,63,43,000 and if the same is divided by the area of the land, i,e., 762 sq. mtr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the three instances referred to by it are fully comparable, there is vast difference between the rates o f these three instances. Land rate of SIP-1 is calculated at Rs. 13,565, of SIP-2 at Rs. 23,181 and of SIP-3 at Rs. 13,260. So far as SIP-2 is concerned, considering the fact that a commercial organisation is purchasing for construction of a hotel on the plot, the land rate is reduced by 30 per cent. so as to fix the land rate at Rs. 14,508. Mr. Soparkar contended that this itself is an arbitrary action and this method is adopted to hold that the transaction of SIP-2 is fair which is in the vicinity of SIP-1. It appears that while examining the case of SIP-1 and SIP-2, a different yardstick is used and while comparing the PUC with SIPs, a different method is adopted. The SIP-2 rate is reduced by 30 per cent. without giving any details of statistics. Mr. Soparkar stated that is it to justify the fair market value of the SIP-1? Looking to the situation of the PUC, why the same cannot be reduced, considering that it is adjacent to police lines and that the plot is not suitable for luxurious flats ? In view of the difference, no reliance can be placed on instances, more particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is not stated but it appears that with a view to discard the submissions made by the petitioner, a reason is given that the properties are situated in an inferior locality. It appears that the contentions raised by the petitioner are nowhere reflected in the order and no justifiable reasons are given for rejecting the same. It is essential that reasons must be indicated. If reasons were given, the court may, after considering such reasons, conclude that the reasons are just and proper and may not interfere but in the absence of reasons for rejecting the contentions raised by the petitioner, we are of the view that the authority has acted arbitrarily. Even for giving 30 per cent. deduction on the land rate of SIP-2, no reasons are assigned and the authorities have acted arbitrarily, and there is no proper application of mind. We are, therefore, of the view that the order is arbitrary and is required to be quashed and set aside. In the result, this petition is allowed. The impugned order at annexure "A" is quashed and set aside. The respondents are directed to issue no objection certificate within eight weeks from the date of receipt of the writ. Rule made absolute accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
