Appellate Tribunal sets aside fair market value determination, citing violation of natural justice principles.

The Appellate Tribunal overturned the fair market value determination made by the competent authority in a case involving the sale of commercial plots. The Tribunal found a violation of natural justice principles in the process and proceeded to calculate the fair market value based on available data and a valuer's report. Criticizing the Tribunal's methodology for determining the fair market price, the judgment set aside the order and remanded the case to the competent authority for a fresh assessment in accordance with the law, with each party bearing their own costs.

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Issues:
1. Apparent consideration of the sale of commercial plots
2. Proceedings initiated under section 269D(1) of the Income-tax Act
3. Objections filed by the respondents
4. Fair market value determination by the competent authority
5. Challenge to the fair market value determination before the Appellate Tribunal
6. Application of principles of natural justice
7. Fair market value calculation by the Tribunal
8. Consideration of market prices of similar plots
9. Rejection of the Tribunal's order and remand to the competent authority

Analysis:

The judgment involves two Income-tax Appeals arising from the same transaction of the sale of two commercial plots. The competent authority initiated proceedings for the acquisition of the plots under section 269D(1) of the Income-tax Act and issued notices to the respondents. Despite objections filed by both parties, the proceedings against the transferor were taken ex parte. The competent authority, after considering objections and conducting inquiries, ordered the acquisition of the plots under Chapter XXA of the Act.

On appeal before the Appellate Tribunal, the fair market value determination by the competent authority was challenged on the grounds of lack of communication of crucial information during the process. The Appellate Tribunal found in favor of the appellants, citing a violation of natural justice principles. Instead of remanding the case, the Tribunal proceeded to determine the fair market value based on available data of similar plots and a valuer's report indicating a 7% annual appreciation rate.

The Tribunal calculated the fair market price of the disputed plots based on the rates of two other plots, rejecting the mean between the two rates. The judgment criticized the Tribunal's decision, stating that the refusal to consider the market price of another plot and the preference for a specific rate lacked a rational basis. Consequently, the Tribunal's order was set aside, and the case was remanded to the competent authority for a fresh determination of the fair market price in accordance with the law. Each party was directed to bear their own costs in this matter.

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