TaxTMI 
TaxTMI 
1998 (12) TMI 27
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.... a sum of Rs. 1,20,00,000 as per the agreement dated March 7, 1997. After the petitioners filed Form No. 37-I, the appropriate authority issued a show-cause notice to them asking them to show cause as to why the property should not be preemptively purchased, as according to the authority, though the property is a residential building, it falls in a mixed residential zone as per the proposed master plan of the MMDA and the entire stretch of the front row are classified as commercial and the property would continue to have the same zone of classification and that the sale consideration of this property, as agreed between the parties compared with the sale realisation from sale of property at No. 33, North Usman Road which was auctioned by ....
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....rity after hearing the parties has held that the land rate for the property which was sold in auction worked out to Rs. 65,75,000 per ground and taking that as a limit, the market value per ground of the petitioners' property in that area was fixed at Rs. 1,49,17,000. The authority also referred to the sale of two other properties in that area to which no reference had been made in the show-cause notice and these sale transactions, according to the authorities, showed that the land was sold for Rs. 1,09,55,000 in July, 1995 and for Rs. 73,41,000 in January, 1996. But, however, observed that it was confining its estimate of the market value to the figure of Rs. 65,57,000 per ground. The authority computed the value of the property that wa....
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....e submission of learned counsel for the Revenue is that the authority had only adopted a uniform method and taken the scrap value of the building for the purpose of comparison. It is not open to the authorities to proceed to preemptively purchase the property by seeking to compare a property with a 70 year old building, with one on which there exists a recently constructed building such construction having been effected at a cost of several millions. By taking a notional scrap value, of such expensive construction the value of the land on which that building exists cannot be artificially boosted. The person who buys a property with a recently constructed building, normally buys it with an idea of using the building and it is only in rare ca....
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....id for the land and scrap value of the building. The appropriate authority acted perversely in treating the value of the building on the auctioned property as scrap for the purpose of valuing the land, even in the absence of any evidence to show that the persons who bought the property bought it with an intention of completely demolishing the existing structure and putting up a new development on that land. The petitioner's counsel stated at the Bar that the building was purchased by a bank for locating its office in the building in that property and the building is being so used even now. The impugned order of the authority therefore, cannot be sustained and is set aside. Learned counsel for the Revenue submitted that the authority m....