TaxTMI 
TaxTMI 
1976 (9) TMI 93
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....ngh, (9) Sri S.J. Mehta (10) Sri Kusheshwar Jha (11) Sri Binod Kumar Mishra (12) Smt. Malti Sah and (13) Miss Sumitra Kumari, the appellants before us in parts a plot of land at Exhibition Road, Patna, bearing no. 567/401 (New) and 316 (old) Circle No. 6, Ward No. 2, Sheet No. 31, Plot No. 762 with building (hereinafter referred to as the disputed property) for an aggregate apparent consideration of Rs. 1,85,000 on 5th Sept., 1973. The information relating to the aforesaid transfers was furnished to the Competent Authority under s. 269 P of the said Act by the Registering Officer, Bombay, in form No. 37G. The information in possession of the Competent Authority revealed that the property transferred consisted of a plot of land measuring about 17.85 kathas located at one corner of the crossing of Dak Bungalow Road and Exhibition Road having a frontage about 111 ft. 6" towards Dak Bungalow Road and 151 ft. towards Exhibition Road. This disputed property was sub-divided into 10 small plots of varying sizes leaving a proposed common lane in between the plots. These small plots were transferred to the different parties through different deeds. The Competent Authority has pointed out tha....
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....properties exceeded the consideration thereof by more than 15 per cent. The Competent Authority found that in case of each transfer the fair market value of the property was more than Rs. 25,000 and that the fair market value of the property exceeded the apparent consideration not only by more than 15 per cent or 25 per cent but by more than 3 to 5 times in different cases and that the gap between the apparent consideration and the fair market value in each case was very wide. The Competent Authority held that the conditions precedent imposed by s. 269C(1) of the said Act fully applied to the transactions in question. 5. The next objection raised by the transferees was that the proceedings are illegal and void as the mandatory provisions of s. 269D (2) of the said Act were not complied with. The competent authority held that the facts of the case do not support this contention as the notices were duly published in the Gazette of India and were also served on the parties and affixed in accordance with the manner prescribed in the said Act. 6. The next contention made by the transferees as well as the transferors was that the property was purchased at the most fair market price....
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....nsfers as agreed to between the parties has not been truly stated in the instrument of transfer with the object as referred to in cl. (a) or cl. (b) of sub-s. (1) of s. 269c. 11. The Competent Authority held that the fair market value of the disputed property exceeds the apparent consideration therefore by more than 25 per cent of such apparent consideration and so in accordance with the provisions of s. 269C(a) of the said Act he treated it as conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer. The Competent Authority also held that as the disputed property was transferred for an apparent consideration which is less than its fair market value, in view of the provisions of s. 269C(a) and (b) of the said Act, he presumed that this consideration for such transfer as agreed to between the parties was not truly stated in the instrument of transfer with such object as is referred to in cl. (a) or (b) of s. 269C. The Competent Authority, therefore, after obtaining the approval of the Commissioner of Income Tax, Bihar-I, Patna, as required by s. 269F, (6) (c) of the said Act passed the order....
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....ppeals on behalf of the Department, has filed the bound volumes of the Gazette India relating to Jan., March, 1974 and April-June, 1974. We find the notification under s. 269D(1) of the said Act at page 1045 of the Gazette of India dt. 2nd March, 1974 in Part-III, s.I which relates to the sale deed of Sardar Bahadur Singh, Appellant. The Gazette notification relating to the other transferees are to be found in Part-III s. I of the Gazette of India dt. 1st June, 1974 at pages 3452 which is in English and at pages 3397 to 3404 which is in Hindi. 15. The learned Counsel for the appellants has pointed out that in the Gazette of India notification dt. 2nd March,1974 relating to Sardar Bahadur Singh which is at page 1045 there are mistakes relating to the transferors as the name of only Sri Vijay Kumar and Smt. Urmila Devi have been mentioned although the other transferors are Sri Sanjay Kumar and Sri Vinay Kumar who are minor sons of Sri Vijay Kumar. The copy of the sale deed executed in favour of Sardar Bahadur Singh is on the record which was executed by Sri Vijay Kumar, son of Sri Newas Ram, Smt. Urmila Devi, wife of Sri Vijay Kumar and Sanjay Kumar and Sri Vinay Kumar were minors....
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.... of S.J. Mehta and has pointed out that the name has been written as Newas Ram instead of Newas Ram. However, we find that there is no mistake in the notification at page 3456. 20. The learned Counsel for the appellants has also referred to the notification at page 3457 relating to the sale deed in favour of Sri Kusheshwar Jha and Sri Vinod Kumar Mishra. In this case instead of Vinay Kumar son of Vijay Kumar it is printed as Vijay Kumar, son of Vijay Kumar. Thus, the mistake is there. 21. The learned Counsel for the appellants has also referred to the notification at page 3458 and he has pointed out that in this notification relating to the transferors the percentage of Sanjay Kumar and Vinay kumar has not been mentioned. We find that this defect is there. 22. The learned Counsel for the appellants has also referred to the notification at page 3480 relating to the transfer in favour of Smt. Jogendra Kaur. He has pointed out that in this case Smt. Jogendra Kaur is the transferee, but she has been shown as transferor and in the transferees Sri Vijay Kumar has been shown as son of Late Niwar Ram instead of Newas Ram and Sanjay Kumar and Vinay Kumar have been shown as sons of ....
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....me Court at page 1203. In this ruling their Lord ships of the Supreme Court have held that the purposes of notifications under s. 4 is to carry on a preliminary investigations with a view to finding out after necessary survey and taking of levels, and, if necessary, digging or boring into the sub-soil whether the land was adapted for the purpose for which it was sought to be acquired and that it is only under s. 6 that a firm declaration has to be made by Government that land with proper description and area so as to be identifiable is needed for a public purpose or for a company and that what was a mere proposal for acquisition under s.4 becomes the subject matter of a definite proceeding for acquisition under the Land Acquisition Act 1894. Their Lordships held that a defect in the notification under s. 4 is not fatal to the validity of the proceedings, particularly when the acquisition is for a company and the purpose has to be investigated under s. 5A or s. 40 necessarily after the notification under s. 4. The learned counsel for the appellants has submitted that in this case only the defect in the notification under s.4 was held not to be fatal to the validity of the proceeding....
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....cient particulars does not vitiate the proceedings for acquisition for public purpose. 27. Sri Rajgarhia also relied on the ruling reports in A.I.R.1970 Supreme Court at page 1188. From this ruling also it is evident that defects in the notifications under ss. 4 and 6 will not invalidate the proceedings. 28. We have pointed out the defects in the Gazette notifications which go to show that the mistakes are minor mistakes of printing and that only in the case of Smt. Jogindra Kaur she was shown as transferor instead of transferee. However, Sri Rajgarhia arguedthat when the original notice were sent for publication in the Gazette, the copies of those notifications were also sent to the transferors and the transferee and that there were not mistakes in the original notices and that the mistakes have taken place only in the Gazette notifications. This point was never challenged by the learned counsel for the appellants. Thus, we have to hold that the notices which were issued to the transferees and the transferors were correct notice giving correct details, but the mistakes have occurred in the Gazette notifications and thus the parties knew the correct state of affairs. Under su....
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....t paper book filed on behalf of the appellants. In these petitions no objection has been taken relating to the defects in the notifications which clearly goes to established that the proceedings had been initiated on the basis of the notices issued to them and which were published in the Gazette of India. Thus, we have to hold that the appellants were not prejudiced or misled by the notifications in the Gazette of India. 31. Sri B.P.Rajgarhia submitted that in two of the notifications the transferors have been shown as Vijay Kumar and Smt. Urmila Devi, But it cannot be doubted that Sri Vijay Kumar executed the sale deed on behalf his minor sons Sanjay Kumar and Vinay Kumarand so although the minors were not described in two of the notifications that cannot be a ground to hold that the notification were invalid. 32. Sri B.P.Rajgarhia relied on the case of Ram Pyari Devi saraogi vs. Commissioner of Income Tax, West Bengal & others (1) where their Lordships of the Supreme Court have held that the assessee had not in any way suffered from the failure of the Commissioner to indicate the results of the enquires the assessee would have full opportunity of showing to the Income-tax O....
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....Act. We have no doubts that no action under s.269D has been taken as required under the section by the Competent Authority and so the portions transferred to these two ladies cannot be acquired by the Competent Authority. We also find from the valuation report of the Executive Engineer (Valuation cell) of the IAC, Acquisition, Patna, that he also found this defect and he has pointed out that no reference was made to the Competent Authority by the Registration office relating to transferees Miss. Sumitra Kumari and Smt. Malti Sah. As the registrations amount was less than Rs. 10,000. But according to the valuation of the above plots comes to Rs. 27,500 each and so he suggested that necessary notices under s.269D may be served against these two transferees, if necessary. From the orders of the Competent Authority, it appears that the report was received on 11th Jan., 1974. However, in spite of it no action under s. 269D appears to have been taken against these two ladies. Hence, we hold that the plots sold to them separately by two sale deeds cannot be acquired as no valid initiations of proceeding took place against these two ladies. 36. The next argument which was advanced by th....
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....this ground. He stated that strict compliance of the provisions of s.269D was necessary to enable the Competent Authority to clothe himself with jurisdiction thereunder. He contended that strict compliance of the provisions of the section is necessary to acquire jurisdiction thereunder. It was argued on behalf of the appellants that sub-s. (1) s. 269D provides for publication of a notice in the Official Gazette and sub-s. (2) provides for services of notice published under s.(1) on the transfer, transferee, etc. According the learned counsel for the appellants the publications of the notice under sub-s. (1) must necessarily proceed the service of the notice under sub-s. (2) as there can be no question of serving notice under sub-s. (2) so long as there does not exist a notice under sub-s. (1) published in official Gazette. The learned counsel for the Appellants argued that so long as a notice is not published in accordance with the provisions of sub-s. (1), the question of serving such a notice, which law does not exist, cannot simply arise. He further, contended that the procedure laid down in the section cannot be reversed and the premature service of notice under sub-s. (2), whi....
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....he manner prescribed in the Act. Sri Rajgarhia has submitted that this clearly goes to show that cl. (b) so s. 269D(2) of the said Act was complied with. He has also submitted that as regards cl. (d) aforesaid the appellants cannot take a vague plea at the time of argument when no such plea was taken in the grounds of appeal. We hold that the publication as required under cl.(b) of s. 269D(2) was complied with and the learned counsel for the appellant is not entitled to take a vague plea at this stage when no such plea was taken earlier before the Competent Authority. 42. The learned counsel for the appellant has relied on the consolidated order dt. 2nd Dec.,1974 of the Income-tax Appellate Tribunal, Bombay Bench 'D' in I.T.A. Nos. 231 to 235 (Bom) of 1974-75. The learned Members of the aforesaid Tribunal have discussed this issue in paras 11 to 14 of the order which is to be found at pages 92 to 99 of the paper book. The learned Member of the Bombay Bench held that as sub-s.(2) provides for services of a notice under sub-s.(1) of s. 269D of the said Act, it necessarily follows that the service must be after publication of the Official Gazette and that the notice does not come i....
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....pointed out that the two sections provide publications in the Official Gazette at two different stages, But even then both the publications can be done simultaneously. For this purpose he has relied on the ruling reported in A.I.R 1962 Supreme Court at page 151 where there Lordships of the Supreme Court have held that a notification under sub.s.(1) of s.4 of the land Acquisition Act, 1894 in condition precedent to the making of notification under subs-s (1) of s.6 and that if the Govt takes a decision to make such a notification and thereafter takes two further decisions that is to dispense dispute which compliance with the provisions of s.5A and also to declare that the land comprised in the notification is in fact needed for a public purpose there is no departure from any provision of the law even though the two notifications are published on the same day. Their Lordships held that the preliminary declaration as well as the subsequent declarations are both required by law to be published in the official Gazette. But the law does not make the prior publications of notifications under sub-s.(1) of s. 4a condition precedent to the publication of a notification under sub-s.(1) of s.6....
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....oncerned and these modes are: (i) Publication of the notice in the official Gazette; (ii) service of the notice on (a) persons who clearly have an interest in the property, the transferor, transferee, and the person in occupation and (b) on persons who, to the knowledge of the Competent Authority, are interest in the property; (iii) Publication of the notice on the notice board or other conspicuous place in the office; (iv) Publication of the notice by affixture of the notice on a conspicuous part of the property; (v) Publication of the substance of notice in the prescribed manner at convenient place in the locality. It has been pointed out in this order that every one of these modes of publication of intention to acquire is compulsory. The learned Vice President considered the question whether the statute contained a mandatory requirement that publication in the Official Gazette should come first and that, only after there is an actual publication in the Gazette, can further steps be validly taken. The learned vice president for the detailed reasons mentioned in the order came to a finding that the statute does not require that notice under s. 269D (2) must be is....
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....1973 to all these transferees as well as the transferors Sri Vijay Kumar and others and in that connection all the transferees filed show cause replies dt.1st Dec.,1973 which was received in the office of the competent Authority on 10th Dec.,1973. It was after this that the Competent Authority recorded his satisfaction on 31st Jan.,1974 and thereon 31st Jan.,1974 he ordered for issue of notices in English and Hindi for publication in the Gazette of India under s.269D(1)of the said Act. It appears that the copies of the notices were also forwarded to the transferors, transferees and the lady who was in possession of the building of the disputed property and then by order dt.18th April, 74 the case was ordered to be fixed on 2nd May, 74 for hearing and then on 2nd May, 74 Sri S.N. Khetan, Advocate, appeared for the transferees and transferees with written statement and he was heard and then by order dt.29th Aug., 74 Sri Khetan was ordered to be furnished with a copy of the Valuation Officer's report and the case was fixed on 16th Sept., 74 for hearing and then it was adjourned to 26th Sept.,74 on which date Sri S.N.Khetan, Advocate, appeared on behalf of the transferors and the trans....
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.... were ignored and that the title of the vendors was under dispute and the title suit No.54 of 1962 was pending in the Court of the Addl. Subordinate Judge, Patna and the entire disputed holding was in the possession of a tenant since more than 25 years on a meagre monthly rent of Rs. 116 and this return was uneconomic. The entire disputed holding was under Patna Development Expansion Scheme resulting in the reduction of the area of the holding by about 10 per cent.The purchasers could not receive vacant physical possession of the properties or any part thereof. Even the written objections filed on behalf of the transferees before the Competent Authority by Sri.S.N.Khetan were also to the same effect. The transferees also pleaded that there was no basis for the assumption that the fair market value of any of the properties exceeded the consideration thereof by more than 15 per cent of such consideration. The transferees also contended that the properties in question were purchased on the most fair market price considering the nature of the encumbrance conditions, Govt.' s future planning and other aspects of the property and under the prevailing situation and present position of the....
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....perties in the vicinity of this plot in order to support their contentions about the price paid for the property. Sri S.N.Khetan requested the Competent Authority for a copy of the Departmental Valuation Officer which was furnished to him and then on 26th Sept., 1974 Sri Khetan on behalf of the transferees and the transferors appeared and filed a common written reply and he also furnished a valuation report from an approved and registered valuer, namely, Sri A.K.Mitra. In this written reply it was contended that the method of valuation adopted by the Valuation Officer of the Department was most unscientific and did not give a correct assessment of the property. It was pleaded that the Valuation Officer overlooked the fact that the entire plot was purchased by different persons of different castes and of different religions and trade and it was wrong to imagine a hypothetical plan treating the property as a single unit. It was also pleaded before the Competent Authority that the valuation of land at Rs. 36,000 per katha had no bearing with the reality as construction of a multi-storeyed building may take at least 10years an so the ultimate cost of the property was not determinable a....
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.... learned counsel for the appellants has filed the sale deed executed by Sri Vijay Kumar and his family members in favour of Sri S.J. Mehta. However the sale deed executed by Smt. Champa Devi and her family members in favour of Sri.S. Mehta is to be found in the file of the Competent Authority relating to Sri S.J. Mehta. As regards Smt. Malti Sah, the learned counsel for the appellants has filed the sale deed executed by Sri Vijay Kumar and his family members. However, the sale deed executed by Smt. Champa Devi and her family member is to be found in the file of the Competent Authority relating to Smt. Lalita Todi. As regards Miss Sumitra Kumari and Sardar Harbhajan Singh, the learned counsel for the appellants has filed only the sale deed executed by Smt.Champa Devi and her family members. The sale deeds executed by Sri Vijay Kumar and his family members relating to Miss. Sumitra Kumari & Sardar Harbhajan Singh are not to be found even in the files of the Competent Authority. However, it is conceded by both the parties that both the sets of vendors have executed the sale deeds in favour of each set of transferees It is also conceded by both the parties that another sale deed was ex....
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....ally we find from the Gazette notification dt.1st June, 74 at page 3458 that 300 sqr. mtrs. were transferred to all the 13 transferees who are the appellants before us out of the disputed property. Unfortunately, that sale deed has not been filed before us either by the learned counsel for the appellants or by Sri Rajgarhia for the Department. 53. The learned counsel for the appellants has filed a copy of the petition dt.1st Nov., 73 filed on behalf of Sri Kusheshwar Jha and Binod Kumar Mishra which shows that before the competent Authority they took the plea as mentioned by the Competent authority. This copy of the petition is at pages 25 to 30 of the paper book. In this petition in para 4 it has been clearly mentioned that all the 13 appellants purchased the property from Vijay Kumar, his wife and sons at Rs. 1,85,000 which included the amount of Rs. 15,000 for the damaged house. The learned counsel for the appellants has also filed a copy of the petition which was filed by 11 of the appellants jointly on 1st Dec., 73 before the Competent Authority which is at pages 31 to 33 of the paper book and in this petition it has been pointed out that the petitioners have paid altogethe....
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....he matter to the Valuation Officer. The Valuation Officer who is the Executive Engineer (Valuation Cell)of the IAC, Acquisition, Patna, submitted a report relating to the valuation of the disputed property. This report is to be found in Income Tax (Acquisition)appeal No.2(Pat)of 1974-75 at pages 2 to 30.The Valuation Officer has clearly mentioned the location of the disputed property measuring 17.5 Kathas which is located at one corner of the crossing of Dak Bungalow Road and Exhibition Road having a frontage of 111 ft.6" towards Dak Bungalow Road and 151 ft. towards Exhibition Road. He has also pointed out that this entire plot has been sub-divided in 10 small plots of verying sizes leaving a proposed common lane in between the plots. He has also mentioned that these small plots have been transferred to 10 different parties in 10 separate sale deeds. He has also pointed out that this area is one of the most busy commercial areas of Patna having a flourishing market of machineries, hardware stores, automobile parts, other heavy machineries etc. He has also pointed out the one single storeyed residential building with a detached servant block with asbestos roof is located at the cen....
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....at the properties transferred to Smt. Malti Sah and Miss Sumitra Kumari shown in plot N.G/H valued by the Valuation Officer at Rs. 27,500 each cannot be taken into consideration as the proceedings have not been validly initiated against them and so the value of the other transfers will come to Rs. 6,03,000. 57. On the other hand, learned counsel for the appellants has filed the report of their approved valuer Sri Mitra which is at pages 21 to 24 of the paper book of the assessee. He has estimated the value of the land at Rs. 3,83,740.He has also pointed out that the building on the disputed plot i sin good normal condition. He has described the position of the building and has held that considering the depreciated value the market value of the disputed properties on 30th June,73 would be Rs. 2,37,500.The Tribunal has mentioned in the order sheet dt.11th Nov., 75 that the Valuation Officer was to explain report particularly that effect of the development plan which affects a few of the demarcated plots. It was after this that the Valuation Officer submitted a report which is to be found in the documents of the Department. The objection of the learned counsel for the appellants wa....
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....ferred to items 2,4,6,11,12 and 13 in Annexure 'K' which gives an idea what should be the reasonable price of land at corner of Exhibition Road and New Dak Bungalow Road in Sept.,1973 as in this area heavy commercial business like tractor, motor vehicles, spare parts of automobiles shop have come up and still coming up along with both sides of Exhibition Road. He has shown the fair market value of the various plots purchased by the various appellants in Annexure 'G' which comes to Rs. 6,58,000. He has given cogent reason for calculating the value at Rs. 36,300 per kathas. The Valuation Officer has considered the valuation according to the "Development Method" He has shown in Annexure 'A' the area of each plot as shown in each sale deed. He has pointed out that 0.15 per cent less area is shown in the sale deed. He has also shown the area of common road of 1.42 kathas and total area excluding road which is 16.42 kathas. In Annexure 'B' he ha shown in each plot taken for construction of 5storeyed building for development purposes. He has pointed out that ultimately 13,840 Sq.ft. out of 22,351 sq.ft.(excluding 12 ft. wide centrally common road) is considered for built up areas for deve....
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....quisition notices are only served on the owners of the properties and the owners of temporary shops on both sides of R.K. Bhattacharjee Road for widening to an extent of 63 ft. from the present 15 to 16 ft. wide road. The Valuation Officer, therefore held that within the next 20 years the plan of widening of road to an extent of 63 ft. will not materialise and that the present width of about 40ft. Is functioning for the traffic conveniently. However, the Valuation Officer took the worse possible case that acquisition threat is there. He calculated the threat only to an extent of 1.987 kathas, the details of which has been given in Annexure 'D' and he also calculated the area of the common road at 1.42 kathas and thus the total area works out to 3.407 kathas which is only 19 per cent of the total area and thus the new area works out to 14,433 kathas. The Valuation Officer considered the value of 14.433 kathas at the rate of Rs. 36,300 per katha which works out to Rs. 5,23,900. He calculated the cost of land under threat of acquisition of 1.987 kathas at Rs. 30,000 per katha which works out to Rs. 59,600 and thus the total amount came to Rs. 5,83,500 which is 104 per cent above the r....
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....ad gone up by about not less than 100 per cent and in case of land by about 200 per cent He, therefore, held that the valuation of Rs. 2,41,000 taken by the approved valuer was not acceptable. The Valuation Officer has given a map in which the various plots have been demarcated as sold to various parties. Thus, the Valuation Officer in his report dt.17th Feb., 76 has given cogent reasons for supporting the valuation given by him and showing that the valuation of the approved valuer cannot be accepted. The Valuation Officer has cited various authorities in Annexure 'M' to show that the hypothetical building schemes are the usual basis of valuation in the case of building land. We have to accept the valuation report of the Valuation Officer under such circumstances. The Competent Authority has discussed the objections of the transferors and the transferees relating to valuation in paras 6 to 18 of his order. From this order it is evident that the price as paid by the appellants to Sri Vjay Kumar and his wife and sons and the price as valued by the Valuation Officer for each plot show that in case of each transfer the fair market value of the property was more than Rs. 25,000.He has g....
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....it was of no significance. He also took the view that the subsequent payment of Rs. 1,01,000 to the transferors Champa Devi and others was voluntary and reimbursable from the first set of vendors according to the terms of the deed. He also took the view that the assessment title disputed did not come into consideration at all at the time of the registration of the sale deeds executed by the first set of vendors and was not expected to adversely affect the price of the property. 62. The Competent Authority also discussed the claim of the appellants relating to the threat of acquisition under Patna Development Expansion Scheme which affected the value of the disputed property. The Competent Authority took the view that there was no mention of such a risk in the deeds of transfer. The deeds clearly show that the property was not affected by any scheme. The Competent Authority held that no evidence was produced before him to show that any notice in this connection was served by any authority. The appellants also pleaded before the Competent Authority that there were difficulties in evicting the tenants who was paying monthly rent of Rs. 116 only. The Competent Authority took the ....
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....15th April, 74 4263 1463 sq.ft. land at S.P.Verma Road,Patna 20,000 19,000 2. -do- 17th April, 74 4736 1640 sq.ft. of land at Fraser Rd.,Patna 42,000 35,000 3. Patna 15th April, 74 4164 3.74 Decimal land at Pendarak 42,000 30,000 4. -do- 20th April, 74 4579 1640 sq.ft.of land at Fraser Rd.,Patna 42,000 35,300 5. -do- 3rd June, 74 7152 2 katha 16 dhur 5 dhurki land at Dujra, Patna(Comparatively undeveloped area) 36,000 13,000 6. -do- 25th June, 74 9633 13dhur land at Kajipur, Patna 32,000 50,000 7. -do- June,74 8129 1katha land with building at Yarpur, Patna 43,000 43,000 with bldg. 64. The Competent Authority has pointed out that none of the plots mentioned above enjoyed better location than the property purchased by the transferees. He has also pointed out that the land was sold even in an area like Kajipur which is at Patna City at Rs.50,000 per katha and at Fraser Road at about Rs. 35,000 per katha. The Competent Authority has given reasons for holding that the market value of the disputed property cannot be less than Rs. 40,000 per katha. ....
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....ade by Sri Mitra are unwarranted and the resultant intentionally deflated figure does not give an accurate idea of the value of the property. He, therefore, took the view that the valuation at Rs. 6,58,000 given by the Valuation Officer is correct. 67. The Competent Authority also considered the contentions of the appellants that the High Courts have held that the Valuation should be done on the basis of annual income of the property calculated on the basis of monthly rent. It is not disputed that the building on the disputed plot has been let out on a monthly rent of Rs. 116.For this purpose reliance was placed before the Competent Authority on the case of Commissioner of Wealth Tax,Mysore vs. V.C. Ramachandran (4) and on the case of Controller of Estate Duty, West Bengal vs. Radha Devi Jalan(5).In both these case it was held that in the case of building with compounds in a city, which are in the possession of tenants and the tenants cannot be either evicted or the rent payable by them enhanced except in according with the provision of the Rent Control Act, the only appropriate method of valuation is to capitalise the annual rent by certain number of years' purchase and that th....
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....lopment method. The Valuation Officer has also considered the comparable cases of sale and on that basis also he has held that the property cannot be valued at less than Rs. 6,58,000. 69. Sri Rajgarhia for the Department has submitted that the valuation of the property has to be considered keeping into view the location of the disputed property. He has also submitted that the Tribunal has only to see that fair market value of the apparent consideration is more than 25 per cent and that if this is held that is sufficient. He has also submitted that if the comparable cases as pointed out by the Competent Authority are taken into consideration, then it cannot be doubted that the price of Rs. 1,85,000 as paid by the appellants for the disputed property is not the correct price and that the fair market value has to be taken at Rs. 6,58,000 as given by the Valuation Officer. He has given the details as pointed by the Competent Authority as well as Valuation Officer in his subsequent detailed reasons before the Appellate Tribunal. Sri Rajgarhia has relied on the ruling reported on 1952 India Law Reports, Calcutta, Series at page 40 where it has been held that compensation under Defence....
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.... 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. Their Lordships have also pointed out that there are various methods of valuation to be adopted in ascertaining the market value of the land which are (1) opinion of experts (2) the price paid within a reasonable time in bonafide transactions of purchase of the elands acquired or the lands acquired and possessing similar advantages, and (3) a number of years' purchases of the actual or immediately prospective profits of the lands acquired. Their Lordships restrained the Court from taking any other special circumstances into consideration, the requirement being always to arrive as near as possible on estimate of the market value. Their Lordships have also pointed out that annual rental value of the land acquired, namely Rs. 7,200 will also not furnish a proper method of computation because that was a rent in 1944 when that land was not of such great value as it has acquired at the time when s.4 of the notification was issued. Their Lordships have also pointed out that smaller area ....
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....he said Act lays down that (1) where the Competent Authority has reason to believe that any immovable property of a fair market value exceeding twenty five thousand rupees has been transferred by a person to another person for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of: (a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transferor; (b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian IT Act, 1922,of this Act or the Wealth Tax Act,1957,the Competent Authority may, subject to the provisions of Chapter-XXA, initiate proceedings for the acquisition of such property under this Chapter; Provided that before initiating such proceedings, the Competent Authority shall record his reasons for doing so; Provided further that no such proceedings shall be initiated unless the Comp....
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....ore than 25 percent of such apparent consideration, it shall be conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer. He has also submitted that if the intention in the execution of the sale deed is mala fide if the trick to avoid tax, acquisition, proceeding is pass, but if the intention is bonafide then no action for acquisition can be taken. 74. The learned counsel for the appellants has referred to the order of the Competent Authority and he has pointed out that in para 19 of the order the Competent Authority has come to a finding that each one of the immovable properties to which these proceedings relate is of fair market value exceeding Rs. 25,000 and that the fair market value of each such property exceeds the apparent consideration therefor by more than 15 per cent of the apparent consideration and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object as referred to in cl. (a) of cl. (b) of s.269C.He has submitted that these findings of the Competent Authority are not supported by reasons....
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....luation of the disputed property is Rs. 6,58,000 which has been sold to the transferees for Rs. 1,85,000. Even if we hold that the transferees appellants have purchased the entire disputed property for Rs. 2,86,111, Even then s.269C(c)(a) of the said Act will be applicable. Sri Rajgarhia has submitted that under s.4 of the Indian Evidence Act,1872, when one fact is declared by this Act to be conclusive proof of another, the Court shall, on proof of one fact, record the other as proved, and shall not allow evidence to be given for the purpose of proving it. 77. For the aforesaid purpose, he has relied on the ruling reported in AIR 1963 Supreme Court at page 151 where it has been held that since evidence means and includes all statements which the Court permits or requires to be made, when the law says that a particular kind of evidence would be conclusive as to the existence of a particular fact it implies that that fact can be proved either by that evidence or by some other evidence which the Court permits or requires to be advanced and that where such other evidence is adduced it would be open to the Court to consider whether, upon that evidence, the fact exists or not. Their L....
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....p between the estimated fair market value and the apparent consideration was very wide and so the presumption envisaged under s.269C(2) arose that the consideration agreed to between the parties had not been truly stated and that this was done with a view to avoiding tax liability and concealing income. This fact will be evident from a copy of the order sheet dt. 31st Jan., 74 which has given to the same reasons. This is also evident from para 1 of the order of the Competent Authority in question. The Competent Authority has clearly held on page 7 that in the case of each transfer the fair market value of the property according to the information in his possession was more than Rs. 25,000 and the fair market value of the property exceeded the apparent consideration not only by more than 15 per cent or 25 per cent but by more than 3 to 5 times in different cases. The Competent Authority in view of the discussions in his order came to the findings as summarised in para 19 of his order. Para 19 of the order is the finding after taking into account all the relevant materials on record and so it cannot be said that the Competent Authority has not recorded reasons for the findings. Even ....
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....March, 1974 was filed by the transferors Vijay Kumar and his family member sand in this common objection it was pointed out to the Competent Authority that the title of the vendors was under dispute and Title Suit No.54 of 1962 was pending in the Court of the Addl. Subordinate Judge, Patna and it was one of the factors due to which the vendors sold the disputed property for a consideration of Rs. 1,183,000.This fact has been mentioned by the Competent Authority in para 3 of his order. 84. It has also been submitted that Sri S.N. Khetan, Advocate, filed written objections on behalf of the transferees on 2nd May,74 and it was pleaded that the fair market value of the disputed property was Rs. 1,85,000 as the property was involved in litigation by some local persons claiming to be the heirs of the owner's father, and the purchasers had jointly undertaken the risk arising therefrom and considering these factors the price paid represented the most fair market value of the property. It was also pointed out to the Competent Authority that after a few months after the purchase the transferees approached the local claimants and made a further payment of Rs. 1,01,000 to them on 22nd Nov.,....
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....which is at pages 58 to 62 of the paper book filed by the appellants. This suit was filed on the allegation that plaintiff No.1 Smt. Mahabalkumari was married to Sri Newas Ram on 21st Nov., 33 and Vijay Kumar plaintiff No.2 was born from this marriage on 12the Dec., 34. It has also been mentioned in the plaint that Sri Newas Ram died on 24th Oct., 60 leaving him surviving only plaintiff No. 2 as widow and plaintiff No.2 as his only son and that there are the only heirs of the deceased. It has also been asserted in the plaint that plaintiff No. 2 Vijay Kumar was adopted in the dvyamushyayant form by the mother of plaintiff No. 1 named Tarabai widow of Motilal Hirakhanwala as a son to her deceased husband and so the plaintiff No.2 Sri Vijay Kumar was entitled to inherit both in his natural and adoptive families. In the plaint it was also asserted that Title Suit No. 36 of 1932 was filed in the Court of Subordinate Judge at Patna for partition of the joint family properties and the plaintiff No. 1's husband was defendant No.2 in that suit and the final decree in the said suit was signed and sealed on 2nd June, 1961 and then several miscellaneous proceedings arose out of the aforesaid ....
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....se. 87. The learned counsel for the appellants has filed a copy of the compromise petition which is at pages 64 to 68 of the paper book. According to this compromise petition which is dt. 10th April, 75 both the parties accepted that defendant No. 1 was the legally married second wife of the deceased Sri Newas Ram and defendant Nos. 2 to 4 were the legitimate children of the deceased from defendant No. 1. It was also admitted by this compromise petition that the plaintiffs had 3/10the share in the properties of Sri Newas Ram and Champa Devi and her children, the defendants had 7/10th shares. The compromise was supported by the affidavits filed by both the parities. 88. The learned counsel for the appellants has also filed a copy of the order sheet dt. 10th June, 1975 of the Addl. Sub-Judge-VIII, Patna which shows that the compromise dt. 10th April, 1975 was filed in the Court and the parties admitted the compromise and the suit was decreed in terms of compromise and the compromise petition was directed to form part of the decree. 89. The learned counsel for appellants has filed a copy of the agreement of sale dt. 19th Dec., 1972 between Sri Vijay Kumar, his wife and his mi....
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....he preliminary notice assessment dt. 29th Sept., 73 the transferees filed written objections before the Competent Authority on 1st Dec., 73 and on 26th Sept., 74. He has filed copies of the aforesaid two objections and we find that there is no mention about the execution of the deed of agreement for sale. However, we find form the objection petitions filed by Sri Kusheshwar Jha and others on 1st Dec., 73 that there is a mention about the sale deed executed by Smt. Champa Devi and they asserted that they have paid Rs. 2,85,000 as the sales price for the property in question. Even in the petition filed on behalf of Sardar Bahadur Singh there is a mention about the sale deed executed by Smt. Champa Devi and others on 22nd Nov., 73. The learned counsel for the appellants has submitted that in the sale deed there is mention about the deed of agreement and so the agreement has to be held to be genuine. However we are of the view that if the agreement dt. 15th July, 73 had been in existence, then the appellants would not have agreed to the recital in the sale deeds executed by Vijay Kumar & Ors. On 30th Aug., 73 that the property belonged exclusively to them. This is clearly a circumstanc....
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....ome-tax authorities have decided the case, without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them the Tribunal, for reason to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. Thus, it cannot be doubted that if the appellants could prove sufficient cause for the late filing of the document, the Tribunal can allow the appellants to adduce additional evidence. Sri Rajgarhia has also relied on the provisions of Order XLI R. 27 of the Code of Civil Procedure, 1908, which lays down that the parties to an appeal shall not be entitled to produce additional evidence whether either oral or documentary in the Appellate Court, but if the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause, the Appellate Court may allow such additional evidence or document to be produced, or witness to be examined. R. 27 also lays down that wherever additional evidence is allowed to be produced by the Appellate Court, the Court shall record....
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....rty to this compromise decree, but it was arrived at between the transferors of the property. In our opinion, it would not be reasonable or proper to admit this document as evidence at this stage as the Competent Authority had no occasion to consider the significance of these documents and its genuineness. This is certainly not a document which the Tribunal required to enable it to as order and no other substantial cause is there to admit a document which has been arrived at a time while the appeals before the Tribunal were pending and the order of acquisition had no occasion to consider it. R. 29 of the Income-tax (Appellate Tribunal) Rules, 1963, also requires that such additional evidence could be filed only if there was any substantial cause or the Tribunal required it to enable it to pass the order. Considering the provisions of law and the facts of this case, we are of the view that this document of compromise should not be admitted at this stage of the appeal before the Tribunal. 94. Sri Rajgarhia has submitted that the disputed property in these acquisition proceedings was not in dispute as such before the Civil Court. He also submitted that if any document was to be adm....
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....the recognised owners as there names were mutated in the Municipal records and the Anchal Office. Under these circumstances they were Competent to transfer the property and give and exclusive possession of the same. 97. Sri Basudeo Prasad had further submitted that Sri Vijay Kumar and others had only 3/10th share in the property as was evident from the compromise and so they could only transfer that much of interest to any other person. In this connection he made reference to the provisions of s. 6 and s. 8 of the Transfer of Property Act. The learned counsel further submitted that the transfer deeds on the basis of which the present action was initiated only transferred 3/10th of the share in the property and in view, of this, the action for acquisition of the property as a whole was illegal. It was argued that in proper context "immovable property" would not include only a partial interest in that property. According to the learned counsel land would mean the entire 16 annas interest in the land and not a part share in that land. He pointed out that after an order of acquisition the possession of immovable property has to be delivered to the Government. Such delivery is not po....
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....nd others have admitted the position that Rs. 1,85, 000 was not the correct market value of the property. He also pointed out that the payment made to Smt. Champa Devi and others had no relationship to their alleged interest in that property. He also pointed out that different transferees have paid different amounts considering the area of the plot. He, therefore, submitted that the second set of sale deeds were not straight documents but were of suspicious nature. 99. We have considered the arguments advanced from both the sides. We do not agree that s. 43 of the Transfer of Property Act has any application in the present case. We have to consider the present appeals in the light of the materials which were before the Competent Authority and we have not admitted the additional evidence which has been produced by the appellants and which has been relied upon by the learned counsel for the appellants. On the basis of the materials which were before the Competent Authority, Sri Vijay Kumar and others had transferred the whole property to the transferees by writing separate deeds in respect of small portions. At the time of acquisition no other person had been shown to have any tit....
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....s. Thus, the second set of sale deeds need not detain us in deciding the action taken on the basis of the first set of sale deeds. 100. Several arguments given above need not be dealt in detail as they were based on the question of additional evidence and fresh documents which have not been admitted by us. We have to proceed and consider the proceedings under s. 269C of the Income Tax Act. This section speaks about the action being taken on the basis of disparity between the fair market value of a property and consideration shown for the transfer of such property as stated in the instrument of transfer. We have, therefore, to consider the instrument of transfer which has been duly registered and on the basis of which the present proceedings have been initiated ; whether it is stated in the instrument of transfer regarding the Interest or the title of the transferred had not been rebutted before the competent authority. A mere suggestion of a dispute was made. There was no evidence of any other established title in respect of the property. In such circumstance when the property validly stood in the name of Shri Vjay Kumar and others who were in exclusive possession of the propert....