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TMI Blog1978 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... CP-863 dt. 5th April, 1957 and sold the same to Bakshi Ram Gaur, hereinafter referred as the transferor by a sale deed dt. 28th June, 1962 registered on 3rd July, 1962 for a sum of Rs. 10,500. Subsequently, the plot mentioned above was transferred in the official record of the Estate Officer from the name of Dewan Sri Ram Puri to the name of Bakshi Ram Gaur vide transfer letter No.14938/CP-863 dt. 14th Sept., 1962. Bakshi Ram Gaur constructed a single storey shop with a covered area of 168 sq. yds. (on the plot of 270 sq. yds.) 3. On 1st July, 1970, the transferor addressed a letter to the trustees of the World Renewal Spiritual Trust, Bombay hereinafter referred as the Trust. The relevance of the said letter to the dispute before us is apparent from its contents. A copy has been given to us and is at page 31 of the paper book filed by Shri D.S. Gupta, Advocate, representing both the transferor and the transferee: Bakshi Ram Gaur, 1280,Sector 18-C, Chandigarh. 1st July,1970. "Trustees, World Renewal Spiritual Trust, C/o Ramesh Shah Company. 121,Mahatme Gandhi Road, Bombay-I BR, Dear Brother, Sub : Donation, Om Shanti, I have seen your spirit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 972 but the short delay was due to the transferor's inability to obtain a no demand certificate from the ITO which could be obtained only on 15th Dec., 1972. The deed was registered on 21st Dec., 1972 itself and Rs.65,000 was received by the transferor from the transferee in cash in the presence of the Registrar. The sale proceeds were remitted by the transferor to the trust as under: "(i) Rs.5,000 vide draft No. CBO 0298623/73 dt. 6th Jan.,1973. (ii) Rs.70,054.15 vide draft No. CDG 0298634/73 dt. 6th Jan.,1973." From the above, we notice that against Rs. 75,000 which was the sale proceeds, the transferor sent Rs. 75,054.15 and the excess amount of Rs. 54.15 accrued from the sale proceeds remaining in fixed deposit with the State Bank of Patiala for fifteen days. 5.The information of the sale was transmitted to the IAC in Form No.37G dt. 21st Dec.,1972. The IAC thereafter on 26th April, 1973 required the Valuation Officer, Chandigarh, under s.269L to determine the fair market value of the property. We like to mention here that though the property sold had been let out and was got vacated to sell the same, such fact was not mentioned by the IAC. The IAC's letter was repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t along with interest. On such facts, the provisions of Chapter XX-A of the Act which were brought on the statute book to remedy and stop transactions of doubtful and mischievous nature in respect of immovable properties, could have hardly any role to pay in the present case because the sale should not have been held to be involving element of understatement and consequent underhand dealings. While we make these observations., we have in focus the explanations of the transferor and the transferee given and the comparable sales and instances which were cited. It is not necessary that once proceedings are initiated or commenced they must result in an acquisition order and the present case is one of those instances where the competent authority apparently stood on prestige and refused to take notice of the situation and the facts in proper perspective. "7. Notices under s.269D(1) were served on the transferor and the transferee on 7th May, 1973 whereas the date of publication of the notices under s.269C in the official Gazette is admitted as 12th May, 1973. s.269D(1) reads as under: "269D(1)-The competent authority shall initiate proceedings for the acquisition under this Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its because if we are to hold that on the facts before the IAC he was in error in passing the acquisition order and that the comparable cases, as cited on behalf of the transferee, indicated that the consideration, as stated in the deed, was not below the market value, and, if any case, the difference was not more than 15 per cent then it shall be unnecessary for us to involve out selves with the question whether in the case the initiation itself was bad. 9. After the transferee got the notice from the IAC, he obtained a Valuation report from approved valuer named H.K.L. Talwar and Associates of Chandigarh. In such report, the market value of the property as on 27th Dec.,1972 was worked out to the tune of Rs. 82,500. While adopting such valuation the size and area of the plot was taken as 108 sq. yds. on which the shop was constructed. The IAC wrote back to the transferee vide his letter dt. 7th Aug.,1974 that his valuer had not taken into consideration the entire plot, i.e.270 sq. yds. and, therefore, the transferee's valuation was not in order. 10. Contesting certain factual aspects in the IAC's communication of 7th Aug.,1974, the transferee submitted in writing dt. 6th Sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larly the consideration for sale of plot No.173A and 173. In this order, we have taken the correct dates as the factual aspects of the affidavit were not controverted by or for the Revenue. 11. Further communication dt. 8th Sept., 1974 was addressed on behalf of the transferee to the IAC inviting his attention that rent of the shop in the site of SCF.No.81, which was the adjoining property (the property in question being SCF.No.83) was fetching a rent of Rs. 500 p.m. since July,1972 and further that SCF.No.83, the other side of the property, was on a tenancy of Rs. 500 p.m. since 1st May, 1972. It was further stated that SCF.No.84 was given on rent at Rs.515p.m. since 1st April, 1973. In short, the transferee in addition to citing comparable sale instances brought to the IAC's notice that shop Nos.81,83 and 84 were all fetching rents of approximately Rs. 500 p.m. and, therefore, while adopting the fair market value of the property at the time of sale the rent consideration was an important factor particularly when the transferee could let out the purchased property (shop)at Rs. 400 p.m. against the earlier tenancy of Rs. 220 p.m. On 16th Sept., 1974,the transferee further re-inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded that both the transferor and the transferee had taken support mainly from the sale instances of the properties situated in the market where the property in question is located. After that, the IAC quoted some extracts from some commentary. We are not touching that part of his order considering the same to be irrelevant and without foundation as for the facts of the case go. In para 7, the IAC observed that the sale must be genuine for comparison and the tests for a bonafide sale were: if it was sold in open market, if there was sufficient publicity and bargaining, if the purchaser was able and qualified to put the land to the best use, whether the transaction was purely on business lines, prior inquiry was made, experts consulted and the matter gone through with due care and caution. The book in land prices al of a sudden at a given time should also be taken into consideration. The IAC's observations could certainly have some meanings if he had analysed the facts of the case in view of the settled and undisputed principles for comparison. In para 8, the IAC referred to the Supreme Court judgement in the case of P.P. Hassan Koya (1), in which the ratio laid down is that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is reproduced below the IAC in para 14 in terms stated that there was no difference in the type of construction of the shops which were cited as comparable by the transferee. "13. The approved Valuer, Shri H.K.L. Talwar, has also mentioned that the rents prevailing in this market are Rs. 500 to Rs. 550 p.m. He is correct if he means that this was the rent prevailing for the shops only in these shop-cum-flat properties in 1970 or before. The vegetable market was the first market to come up in this Sector (Sector 26)and rents of shops as in 1969-70 were about Rs. 500 to Rs. 550. A distinction between the grain market and the vegetable market has also been made out on the basis of rents prevailing in the respective localities. The rents in the grain market are higher than the rents in the vegetable market, not because of the reasons given by the transferees but because the plots in grain market are bigger in area (280 sq. yds.) and because of the larger floor area. Another reason for that is that the grain market came up much after the vegetable market. Since there is already a market complex in existence and Sector 7-C market had also come up by that time, this area was fast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be held to be more than 15 per cent of the recorded consideration because while giving his report of the valuation at Rs. 82,500 he had in view only the covered area of the plot to the extent of 168 sq. yds. According to the Departmental Representative, the market value of the property being more than 25 per cent of the recorded consideration, there was conclusive unrebuttable presumption that the consideration was under-stated by the transferor and the transferee. Shri R.R. Gupta's contention was that both the Departmental Valuation Officer and the assessee's valuer had adopted land and building method and, therefore, though the IAC had estimated the A.L.V. at Rs. 1,300 p.m. of the property at the time of sale, it was not on the basis of rental method alone that the market value came to be determined for the purpose of acquisition. Mr. R.R. Gupta next argued that the Valuation Officer while estimating the market value of the plot at Rs. 400 per sq. yd. had kept in view the spacing of the two dates, the benefits attached to auction sales, like payments to be made in instalments and lower rate of interest etc. He argued that the maximum benefit from February,1972 to Dec., 21,1972 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeals under Chapter XXA before the Tribunal being the first appeal, a more liberal view should be taken. After hearing the parties, in our view, the documents at pages 7 to 9 should be taken on record as it was an agreement to sell and this aspect was brought to the I.A.C's notice as the sale agreement itself was submitted. The list of commercial sites sold on 24th March, 1974, in our opinion, was very relevant to the case and there being auction sales and being in the public knowledge even if the transferor and the transferee did not point out such sales, the Valuation Officer was aware and should have taken notice of the same. In fact, instances at page 19 would show that on 24th March, 1974, even godown sites plots measuring 187.83 sq. yds. were sold in auction between Rs. 56,100 and Rs. 64,100 alongwith the necessary benefits attached with the general auction sales and when godown sites constructions were fetching much higher rent as compared to SCFs. Constructions, the transferor's and the transferee's case get strengthened that the valuation, recorded in the sale deed, was not lower than the market value. Pages 20 to 24 we have not taken on record. Pages 31 to 35 are c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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