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TMI Blog1981 (5) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Prasanta Kumar Dutta, and (3) Sri Prodyut Kumar Dutta. Each of them was the purchaser of an 1/3rd undivided share for a consideration of Rs. 34,000. The transaction under consideration, according to the revenue in the present case, is of the 1/3rd share in the said property purchased by each of the three persons. On receipt of information from the Registrar of Assurances, Calcutta, the above transaction, according to the revenue, was sent up for valuation to the Valuation Officer, Unit-II. The Valuation Officer valued the entire property at Rs. 1,29,501 and the individual 1/3rd share in the present transaction at Rs. 43,167 against the admitted consideration of Rs. 34,000. It would be relevant at this stage to refer to the valuation made by the Valuation Officer. The Valuation Officer of the department has stated that the property was inspected by him on November 13, 1973, and the property comprised of a single storeyed shop housed in a very old structure previously used as stables. The building is nearly 100 years old. Shopkeepers have maintained and renovated the building from time to time. The building has no electrical and sanitary arrangements, except one common latrin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e existing building had a very low plinth height and only about 8 ft. storey height, single storeyed. There was no stair to the roof. The walls were 18 " thick in line, soorki and mortar lime plastered. The roof was laid on old rails as beams, burnt earthen tiles and terraced over. The flooring was lime concrete with cement plaster. There was no window. The front opening was initially provided with M. S. rods as gratings which were placed in many of the shops by collapsible gates. By the land and building method the valuation of the property, according to the departmental valuer, came to Rs. 1,29,500. He enclosed a calculation sheet which is as follows: " Enclo : Calculation sheets. By land building method Rs. S. H.-Reproduction cost. Plinth area-1558 sft. @ Rs. 16 per sft. 24,928 M. S. bars in door-7 Nos. @ 70 sft. each= 490 sft. @ Rs. 3 per sft. 1,470 ----------------- 26,398 ----------------- Salvage value-10% of Rs. 26,398-Rs. 2,600 (say) Land Area of land-4.7 kottah @ Rs. 27,000-P.K 1,26,900 Therefore, value of the property comes to Rs. 1,26,900 plus 2,600= Rs. 1,29,500 " Acting on this valuation report, notice was given by the IA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the report of the Valuation Officer, which we have set out hereinbefore and that, according to the revenue, was sufficient material for an initiation of the proceedings which fulfilled the requirements of the section. We shall advert to this aspect later. The appellant showed cause and there were various grounds indicated and reliance was placed also on a valuation report by the parties. Now, the said valuation report also gives the particulars of the plot, except that the area of the property which the valuer stated, was ascertained by him to be 4 kottahs 12 ch. 12 sft. The valuer in his report stated as follows : " 4. The property has been let out to a number of tenants, each occupying one shop room at a total gross rent of Rs. 233.50 per month. This total rent is of long standing and cannot be a guide for determining the market value. I have come to learn that the land lord has agreed according to the terms of compromise to enhance the lent to Rs. 50 gross per month for each shop in case the landlord rebuilds the structures, there being proposal for seven such shop rooms. So, total expected rents for the shops will be Rs. 350 gross for month. So, I have considered rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntirety of the property was not fully developed or let out, the principles enunciated by the Supreme Court in the case of R. C. Cooper v. Union of India [1970] 40 Comp Cas 325, would be applicable and the ratio of the decision of this court in the case of CED v. Radha Devi Jalan [1968] 67 ITR 761, would not apply in full force and, therefore, the order of the IAC making the acquisition was upheld by the Tribunal. The property of the said order is under challenge in this appeal before us. On behalf of the appellant it was contended that there were no materials for the initiation of the proceedings. It was secondly urged that, in any event, on the materials as produced before the Tribunal and as apparent from the records it was evident that the order of acquisition could not be legally made or sustainable. Before we consider the rival contentions, it would be material to bear in mind certain undisputed facts. The transactions in question took place some time in the year 1973. Now, though there is some discrepancy in the report of the valuer about the area being 4.12 kottahs it appears that the order of acquisition proceeded on the basis that the premises in question comprised of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is self-evident and it is strange that the IAC could not see it. Learned advocate for the revenue urged before us that this was a question of fact urged before the IAC and he has held against him and, therefore, we should not go behind this finding. It was, further, urged that this question did not seem to have been urged before the Tribunal. We are, however, unable to accept this contention. If an apparent arithmetical mistake is self-evident, then in our opinion, in exercise of our appellate jurisdiction in disposing of the appeal, we can certainly take cognizance of these facts, which are apparent from the records, as these are. If we proceed on the basis that Rs. 1,19,812.50 should be the figure as value of the land as per calculation of the Departmental Valuation Officer of 4.7 kottahs of land and add Rs. 2,600 as the salvage value which he has added, then the total figure comes to Rs. 1,22,412.50. The next question, however, appears to be whether any deduction on account of the undivided one-third share had to be calculated. Now, that this was not the property of one individual and there were three separate properties involved is evident from the fact that there were three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue as computed by the departmental valuer with arithmetical inaccuracy ultimately comes to Rs. 1,10,171.50, i.e., Rs. 1,19,812.50 Plus, Rs. 2,600, making a total figure of Rs. 1,22,412.50 and deducting therefrom for an undivided share at, 10%, i. e., Rs. 12,241, we arrive at the figure of Rs. 1,10,171.50 and one-third of the same would work out to Rs. 36,723.83, the premises in question having been sold by each of the three vendees at Rs. 34,000. On these figures, ex facie it shows that the premises had not been sold at a price 15% lower than the market price as was estimated properly by the departmental valuer. If this is the position, then the order cannot be sustained and the acquisition could not be upheld. And, if this was the only material available before the initiating authority, then the initiation was also improper. Learned advocate for the revenue stressed, relying on certain observations made in this case J. N. Bose v. CWT [1976] 104 ITR 83 (Cal), that only one method should be followed. In our opinion, reading the judgment in that way would be only misreading the observations. What was said was that there are methods of valuation and whether in a particular situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was actually receiving at the relevant point of time or the rent which the neighbouring lands of similar nature are fetching can be taken into account by capitalising the rent which, according to the present prevailing rate of interest is 20 times the annual rent. But this also is not a conclusive method. This court had in Special Land Acquisition Officer, Bangalore v. Adinarayan Setty [1959] Suppl I SCR 404; AIR 1959 SC 429, indicated at page 412, the methods of valuation to be adopted in ascertaining the market value of the land on the date of the notification under section 4(1) which are: (i) opinion of experts, (ii) the price paid within a reasonable time in bona fide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages; and (iii) a number of years' purchase of the actual or immediately prospective profits of the lands acquired. These methods, however, do not preclude the court from taking any other special circumstances into consideration, the requirement being always to arrive as near as possible at an estimate of the market value. In arriving at a reasonable correct market value, it may be necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where at p. 784 of the report, it was observed by me that the evidentiary value of the presumption under sub-s. (2) of s. 269 were not attracted at the time of initiation because, according to me, if that were so, there was no question of rebutting the presumption. On this aspect, we had accepted the view of the learned single judge of this court in the case of Smt. Bani Roy Chowdhury v. Competent Authority [1978] 112 ITR 111, where at p. 120 of the report Mr. justice R. M. Dutta had observed also to that effect. These two decisions were referred to in the judgment in the case of CIT v. Madho Properties Ltd. (I.T. Appeals Nos. 9 10 of 1976 delivered on 12th December, 1980, unreported-since reported in [1981] 131 ITR 380 (Cal)), where analysing the, sections and after referring to the decision and judgment in the case of Smt. Bani Roy Chowdhury v. Competent Authority [1978] 112 ITR 111 (Cal), referred to hereinbefore, and also the decision in the case Subhkaran Chowdhury v. IAC [1979] 118 ITR 777 (Cal), which we have mentioned hereinbefore, Mr. justice Dipak Kumar Sen, speaking for the Division Bench, after referring to the relevant provision, observed as follows (pp. 407, 408): ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority to draw any presumption under s. 269C(1) prior to the initiation of the acquisition proceedings. Section 269C lays down that such presumption can be drawn in any proceeding under that chapter. Section 269D similarly lays down equally clearly that proceedings for acquisition under that chapter can be initiated only by a notice to be issued under that section. We are unable to accept the contention of the revenue that the word 'proceeding' in s. 269C includes all initial steps to be taken by the Competent Authority prior to the issue of a notice under s. 269D. This contention appears to be untenable in the face of the clear language of s. 269D. It was also not open to the Competent Authority to draw any presumption under s. 269C at that stage for other reasons. The presumption under s.269C(2) can be drawn only where the fair market value of the property exceeds the apparent consideration by a certain percentage (of the apparent consideration). In our view, such a presumption can be drawn only when the value of the property has been finally determined and not before. At the time of initiation of the proceeding the Competent Authority is required only to record his reasons fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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