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TMI Blog1981 (12) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Tribunal, Jaipur Bench in their order dt. 28th Aug., 1974 in IT Acq.No. 9/JP/1973-74 and it restored the matter back to the Competent Authority for fresh disposal. In accordance with the direction of the Tribunal, two separate acquisition by the Competent Authority dt.20th June,1973. In Acquisition Appeal No.10, we are concerned with the northern portion. The Competent Authority for the reasons mentioned by him in each of the orders passed orders for acquisition under s. 269 F(6) of the IT Act, 1961. 3. In these appeals, the first objection raised by the appellant, the transferee, is that the initiation of proceedings by the competent authority is invalid and against law. According to the ld. counsel, satisfaction required of the competent authority to initiate proceedings under s. 269c is not in existence. For this purpose, he stated that the report of the Deptl. Valuation Officer was not available at the time of initiation. On verification of the facts and the records of the Competent authority, this submission is factually incorrect. We find that there was a report of the Valuation Officer dt.19th June, 1973 and the initiation of the proceedings took place on 20th Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the proceedings, partook in the same and filed the objections. There is thus substantial compliance of provision of s. 269D(2) and there is no question of proceeding being vitiated. 4. Then Mr. Lakhotia raised the contention that there was an opportunity given to cross examined the Deptl. Valuation Officer. He invited our attention to the letter of the appellant addressed to the competent authority dt. 31st March, 1979, wherein the appellant specifically asked for opportunity to cross examine the Deptl. Valuation Officer. We will deal with this aspect, in case we find it necessary after discussing the matter on merits. 5. Mr. Lakhotia contended that the method of valuation adopted by the Deptl. Valuation officer which has been accepted by the competent authority, is not correct. According to him, the method to be adopted is to value of the land and its scrap value of the building. Alternatively, the rental method should have been adopted. He also contended that even on the method adopted by the competent authority, the valuation fixed is very much on the high side. He mainly concentrated on the valuation of the land. He has also highlighted the various admitted features, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the two sale deeds, though there is some difference in the construction area between the two. In these circumstances, we proceed to take the building as a whole and consider the fair market value. 8. Coming first to the method of valuation we find substantial force in the submissions of the Valuation Officer of the Department that the method of valuation by taking the scrap value of the building is not appropriate in this case. The ground floor is constructed in 1949 and the sale took place in 1973.The first floor was constructed in 1965. Therefore, the building is not that old so as to treat the old building as scrap and determine the value of the land only. Therefore, one of the methods to be adopted in a case like this is to value the land and building. The main dispute in this matter centres round the value of the land. The Deptl. Valuation Officer determined the value at about Rs. 100 per sq. yd., while the competent authority fixed the rate at Rs. 70 per sq. yd. It is true that there have been varying reports from the Deptl. Valuation Officer, as rightly pointed out by Mr. Lakhotia, but the reports in regard to the valuation of land loses much of their validity in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Building Tax Act. We accept the contention of Mr. Lakhotia that 30 per cent deduction is to be allowed towards incumbrance. This would result in the determination of the value of the land at Rs. 45 per sq. yd. 9. The matter also can be looked into from the point of view of rental method. There is some controversy as to whether the rent realised is a genuine rent or not. But we find in one of the materials on record that the appellant gave a portion of the building at Rs. 175 per month to the transferee. The other portions were let out subsequently and the rental income which the transferee has been receiving, has been determined under the IT Act and, we are told, has been accepted. Apart from this, we have the municipal valuation in this case. According to the municipal valuation, the tax is Rs. 381.37 p. The Municipal Act, as Mr. Lakhotia pointed out, takes 6.25 per cent of the tax and on that basis, the annual letting value would come to Rs. 6,102.Even if we adopt multiple of 12.5,the value would come to Rs. 76.275. The arguments of the ld. Deptl. Rep. as also the Deptl. Valuation Officer are that the rental method should not be adopted, as the vacant possession was obtain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such escalation in the cost. It is well known that the inflationary trend specially in regard to building materials was of recent origin. Such escalation was not there during early seventies. Even the cost as on 1st Jan.,1970 as per the schedule of rates cannot be applied uniformly. Average cost is worked out and there is bound to be some variation from building to building. Therefore, no escalation in the rates adopted in 1st Jan.,197 0 is to be taken. The Deptl. Valuation Officer adopted 12 1/2 per cent of the cost towards the electricity installation, while the valuer of the appellant took it at 6 per cent when we put this specifically to the DVO, he stated that percentage to be adopted depends only on particular type of electric installation. But he was fair enough to say that the electric installation in the building in question was not of such high standard an 12 1/1 per cent is adopted only in respect of 1st class materials. In view of this, we think, 6 per cent is only reasonable. The Deptl. Valuation Officer has made extra valuation for power plugs and this does not appear to be justified. When an electrical installation is separately valued, no further addition is calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liability of the transferor to pay tax or facilitating to concealment of any income by transferee etc. When once presumption is only rebuttable, the appellant can show that the presumption is rebutted and this is possible by the denial both by the transferee and transferor. In fact, they denied about any consideration other than what has been stipulated in the instruments of transfer. It has been their case that the property was sold by transferor to the transferee bonafide. There is also no evidence nor any suggestion that the transferee paid more than what has been stated in the instrument. The circumstances brought on record also do not show that the presumption has been rebutted by the transferee and the transferor. Thus, even if s. 269c(2) is brought into picture, the transfer is out of the purview of acquisition proceedings, as the presumption arising thereunder has been rebutted in this case. We may once again repeat that according to us, the fair market value cannot be said to have exceeded 15 per cent of the apparent consideration and, therefore resort to s. 269(2)has no place. In the result, the orders of acquisition in both the cases are quashed. 13. The appeals ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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