9911796707
TMI Blog2000 (10) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... two properties, for the valuation dates 31st March 1986, 31st March, 1987 and 31st March ,1988. The assessee had filed and approved valuer's report in regard to Cunningham Road property No. 15 & 17 wherein the approved valuer had taken its value at Rs. 11,70,000. The approved valuer had mentioned the area as 45,256 sq. ft. and had enclosed a plan along with his report. The plan refers to properties 15, 16 & 17) of Cunningham Road and mentions the area of the full property at 58,324 sq. ft. 3. Consequent to the reference made by the AO to the DVO, the property at Cunningham Road was inspected on 25th Nov., 1992, In the report, it has been noted that the property was purchased in the year 1974 and that one of the properties was tenanted by NCC (A Govt. of India unit) and had vacated the premises on 31st July, 1986. It is also noted that one small building was occupied by an ex-Member of Parliament. It has been further noted that the occupation of the small portion by the ex-MP does not come in the way of development of the property. The land area has been mentioned as 5,590 sq. mts. 4. Insofar as the built-up area of the old building is concerned, it has been mentioned that, at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which it has been mentioned that the total area of the site is 60,165 sq. ft. and that the built-up area of the main building, out-houses, etc. is 15,190 sq. ft. 7. The objection of the assessees, primarily, is with reference to the AO restricting the co-owners to three when it is known that four co-owners had purchased the properties in 1974. This objection of the assessee is correct which is evident from the fact that, in the case of one of the co-owners, Mr. Raghava Reddy, assessed by the Asst. CWT (Inv.) Cir. 5 (1), Bangalore- a copy of the assessment order has been placed at pp. 60 to 62-it is clearly stated that there are four co-owners. Therefore, to this extent, the assessee must succeed and we direct the AO to include 1/4th share only in the hands of the assessee. 8. The primary objection of the assessees with reference to the valuation is that the DVO had considered the cases located in Cunningham Road which are of smaller size. The plea was that value of land which is of smaller size cannot be compared with a value of the land which is very large- in the present case, the size of the property is about 5,600 sq. mt. The other objection was that the sale instances note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for construction of a hotel premises, as was approved on 9th Nov., 1989, showed existence of buildings on the land. A copy of the letter addressed to the Bangalore Corporation, dt. 15th Sept., 1991, intimating them about demolishing the existing structure was also provided to the CWT(A). A copy of the order of the Spl. Dy. Commr., Urban Land Ceiling, dt. 20th Aug., 1992 was also furnished to lay emphasis on the fact that properties No. 15 and 17 were not a vacant site. It was further alleged that the AO was fully aware of the fact that the old building did exist particularly the one that was in the occupation of the NCC which was used by the assessee for their own business purposes. In support of this plea, the assessees also placed reliance on the fact that, at the time of search, certain documents were seized which showed that the assessees had incurred expenditure in connection with demolition of the structure. The assessees insisted that the property that was rented out to NCC till 31st March, 1986 must be valued on rent capitalisation method only. Further, the above property had been further let out and the income therefrom being assessed, should be assessed under rent capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis that the rent received being paltry, would not reflect the true value. In fact, this he had done because he was of the opinion that Sch. III is inapplicable. He also considered the portion that was occupied by the ex-MP and that the municipal tax levied was Rs. 262. Considering the seize of the building, he determined the land appurtenant to the land and building at 1,500 sq. ft. On this basis, he directed the AO to adopt a value of Rs. 20,000 for the land and building of the rear portion of property at No. 16. He further directed to exclude 1,500 sq. ft. from the computation of land and building method. 13. The CWT(A) considered the portion which was in the occupation of the Chowkidar and one army personnel. He came to the conclusion that it was not at all difficult to push the two persons out and demolish the building. On this basis, he upheld the land and building method. 14. He, thereafter, considered the value of the land adopted by the DVO. In para. 13.4.1, at p. 16, he reproduced the submission of the assessee as to how the land value should be calculated. This being relevant is reproduced below: "Property Date of sale Rate/sq. mt. 78/1/B 1-8-1986 Rs. 1,579 69/1 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the value to be worked out at the following rates: I belt II belt (15,343 sq. ft.) 31-3-1986 Rs. 1,118 per sq. mt. 894 per sq. mt. 31-3-1987 Rs. 1,286 per sq. mt. 1,029 per sq. mt. 31-3-1988 Rs. 2,000 per sq. mt. 1,600 per sq. mt. The AO is directed to exclude 2,500 sq. ft. from the total area of 60,165 sq. ft. being in possession of tenant who cannot be vacated and to consider this as belonging to property in I belt. The value of the property is to be taken at Rs. 20,000 as directed at sub-para 12.2. of this order. The Valuation Officer has added Rs. 20,000, Rs. 25,000 and Rs. 30,000 towards salvage value of existing old building, as on 31st March, 1986, 31st March, 1987 and 31st March, 1988. As the building being outhouse in possession of tenant is only a small portion of the area covered by old building, I do not find it necessary to direct any further deduction from the salvage value of the building estimated by the Valuation Officer." 17. The contention of the assessees that 15 per cent should be given as deduction for joint ownership had been considered by the CWT(A) and he was not impressed with the submissions. 18. The observations of the CWT(A) in regard to valuatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce between the unbuilt area and the aggregate area. The aggregate area as has been taken by the CWT(A) is 60,165 sq. ft. and 20 per cent of this works out to 12,033 sq. ft. only. The CWT(A) had taken the unbuilt area while taking 9,000 sq. ft. as the built-up area. This built-up area, as has been pointed out by the assessees, is only with reference to properties Nos. 15 and 17 and not with reference to the others. The assessee had pointed out that the built-up area, as per plan submitted at p. 50 of the paper book, is 15,190 sq. ft. If this figure is correct, then the unbuilt area would work out to about 45,000 sq. ft. The specified area of 65 per cent of 60,165 sq. ft. being 39,107 sq. ft., the difference between the unbuilt area of 45,000 sq. ft. and the specified area would approximately work out to 6,000 sq. ft. only. This figure is very much below the 20 per cent limit prescribed in Sch III. On this basis we have to uphold the claim of the assessee that Sch. III would have to be applied in valuing the properties. The rent capitalisation at 12.5 times, as prescribed in Sch. III, would definitely be attracted for the valuation date 31st March, 1986. On this basis, we direct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st March, 1988. We, accordingly, hold so. 23. As far as the rebate for joint ownership is concerned, the claim of the assessee at 15 per cent before the CWT(A) and at 20 per cent before us, is not based on any rule of law. The Courts have been consistently holding that for co-ownership, rebate of 10 per cent should be allowed and this has been so given by the CWT(A). We, accordingly, uphold his order in this regard. 24. As far as the valuation of Nandidurg Road property is concerned, 15 per cent increase every year has been allowed which, to our mind, is reasonable and, accordingly, the values suggested by the assessee at Rs. 1,162, Rs. 1,336 and Rs. 1,536, for the valuation dates 31st March, 1986, 31st March, 1987 and 31st March, 1988, respectively are quite reasonable and we direct the same to be adopted. 25. Valuation of the Cunningham Road property was also made for valuation dates 31st March, 1989, to 31st March, 1993. The values adopted, on the land and building method, were Rs. 2,28 crores, Rs. 2,99 crores, Rs. 3.44 crores, Rs. 3.76 crores and Rs. 4.33 crores for the valuation dates 31st March, 1989 to 31st March, 1993, respectively. The basis of valuation as observed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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