TaxTMI 
TaxTMI 
2018 (12) TMI 564
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.... value for which the ld.Counsel for the assessee relied upon the decision from Hon'ble Bombay High Court in the case of Lakshmi Narayan Grover Vs. Appropriate Authority 223 ITR 572, and Hon'ble Jurisdictiional High Court in the case of Hindustan Motors Ltd in 240 ITE 424, CIT Vs. R.Jawahr, 217 ITR 59, CIT Vs. R.Damodaran 247 ITR 697 and Hon'ble Rajsasthan High Court in Krishnakumar Rawat VS. UOI in 214 ITR 610(Rajasthan) and the case of Jawajee Naganathan Vs. R.D.O AIR 1994 SC 2852. The crux of the argument is that ld. First Appellate Authority erred in confirming the valuation, as on 01.04.1981, based on guide lines value. On the other hand, the ld.DR Shri B.Sagadevan strongly defended the impugned order by contending that the matter may be sent back to the file of the ld.CIT(A) to consider the arguments of the assessee and the valuation as on 1.4.1981. 3. Before adverting further, we deem it appropriate to consider decisions, relied upon, before us. One such decisions is from Hon'ble Jurisdictional High Court in the case of Hindustan Motors Ltd.(surpa) wherein the Hon'ble High Court observed/held as under:- "14. Both the properties in question, namely, at No. 10, Firs....
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....e agreement is that the appropriate authority should have taken the market value of the construction to be made by the petitioners on lot 'B'. It is submitted that Rs. 10 lakhs only represented the cost of construction. The objection must be sustained. The appropriate authority has treated the proposed construction as a 'thing' within the meaning of Section 269UA(b)(2)(ii) and (iii). It should have addressed its mind to the market value of such construction on the date of the agreement. It has not." 16. A perusal of the relevant provisions would clearly show that where an order for the purchase of any immovable property is made under Section 269UD(1) of the Act, the Central Government shall pay, by way of consideration for such purchase, an amount equal to the amount of the apparent consideration. In such a circumstance, the question of fulfilling the promises as per the agreement does not arise. In terms of Section 269UM, the transferee cannot make any claim against the transferor by reason of such transfer being not in accordance with the agreement for the transfer of the immovable property entered into. Accordingly, the contention of the learned....
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....operty, the purpose for which the property is used, the nature of the property the time when the agreement is entered into and similar other objective factors. The valuation, therefore, has to be done by a method which is more objective and could furnish reliable data to arrive at a just conclusion. As already stated, the market rates notified by the Sub-Registrar for the purpose of registration cannot be a proper guide for valuation in respect of preemptive purchase. 18. Appropriate authority has referred to two sale instances in the past in the vicinity of the said property which are relevant and comparable. The details of two sale instances as mentioned in the show-cause notice as well as in the impugned order of the appropriate authority are stated hereunder : Sl. No. Date of agree-ment Description of the properly Rate perground for land Modified rate as on the date of agreementallowing 1 per cent. p.m. 28.2.96 No. 6, II Avenue, HarringtonRoad, Chennai. Land : 5.500 sq. ft. (2.29 grds) Bldg : About 3,200 sq. ft. (double storeyed) (i) Rs. 64,13,000 considering depreciated cost for building (i) Rs. 72,46,690 Year of c....
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....property, namely, Second Main Road, Gandhi Nagar, Adyar, has not been considered by the appropriate authority even in the show-cause notice dated May 19, 1997, the appropriate authority has referred to and compared with the sale instances in the same locality. The following details have been furnished with regard to the Adyar property : Sl. No. Date of agreement Description of the property Land rateper ground1. 5-8-95 D. No. 2, II Main Road, Gandhi Nagar, Adyar, Chennai. Rs. 21,00,000 Land : 10,797,33 sq. ft. out of 13,464 sq. ft. Apparent consideration : Rs. 99,00,000 Discounted consideration : Rs. 94,49,011 Transferee : Mrs. Geetha Kumar, No. 55, RukmaniRoad, Kalakshetra Colony, Besant Nagar, Chennai. 10-11-95 D. No. 19. I Main Road, Gandhi Nagar, Adyar, Chennai. Rs.34,61,000 Land : 12,960 sq. ft. Apparent considerationRs.1,95,00,000 Discounted consideration Rs. 1,87,88,190Transferee : Dev Apartments, Adyar, Chennai. 20. It is clear that the land rate reflected in the case of the property at door No. 1, Second Main Road, Gandhi Nagar, Adyar, Chennai, is Rs. 43,64,000 which indicates an appre....
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....the valuer while evaluating the fair market value. Further, even though the Coovum river has any effect on the property in question, the appropriate authority have given due consideration for locational disadvantage on account of the Coovum and allowed 5 per cent, reduction in the land rate while evaluating the fair market value. Regarding the width of the road, the appropriate authority has obtained necessary details from the Madras Metropolitan Development Authority and considered the claim of the petitioner. In the light of the detailed discussions by the appropriate authority based on acceptable materials, though learned senior counsel for the petitioner has referred to various decisions regarding fixation of market value and other aspects, I am of the view that it is unnecessary to refer the same. Further it is settled law that when the facts are clear, there is no need to refer decisions for those aspects. 22. Finally, as rightly contended by learned senior Central Government standing counsel, this court exercising jurisdiction under Article 226 of the Constitution of India, cannot scrutinise the matter like an appeal. It is settled law that judicia....
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....een the parties was fair and reasonable and that in fact the rate of valuation fixed as per the land rates maintained by the Nagpur Corporation and by the stamp authorities for levy of stamp duty and the registration charges upon documents relating to transfer of title was much lower than the market rate calculated for the suit property on the basis of the consideration agreed to between the parties. It was pointed out that for the area in question the said land rate fixed was Rs. 1,500 per sq. mt., i. e., Rs. 145 per sq. ft., whereas the land rate for the suit transaction worked out to Rs. 225 per sq. ft. Further, it was pointed out by the petitioner in her reply to the show-cause notice that there was encroachment upon some portion of the suit land regarding which a dispute was going on and for which reason its market value would be lower than its real market value. The plea was also raised that since there were two co-owners, i. e., the beneficiaries, the share of each would be less than Rs. 10,00,000 and as such the provisions of compulsory purchase in Chapter XX-C of the Act would not be attracted to the instant sale transaction. Along with the reply to the show-cause....
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....ement of sale. It has calculated the discounted value of the consideration for the sale transaction at Rs. 13,25,343 as shown in para 4 of the reasons. The rate, therefore, worked out was Rs. 221 per sq. ft. The Appropriate Authority then worked out the land rate of land in the same locality of Civil Lines which was treated as a comparable sale instance by it. Its particulars are given by it in para 5 of the reasons. It appears from the particulars that the agreement of sale in the sale instance was dt. 26th Dec., 1990, and the area of the land agreed to be sold was 4,839.5 sq. ft. out of plot No. 2 in Shri Vallabh Co-operative Housing Society, Civil Lines, Nagpur. Its apparent consideration was Rs. 15,00,000 and the discounted rate per sq. ft. worked out was Rs. 304.20 with permissible FSI of 1. Since the property in the sale instance was sold one year two months earlier than the suit property, considering the 12 per cent increase in the land rate per annum, the rate of the land in the sale instance was worked out to Rs. 348 per sq. ft. As the difference was thus more than 15 per cent in the light of the judgment of the Supreme Court in the case of C. B. Gautam (....
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....he Act. In fact as pointed out by the Appropriate Authority in the reasons given by it on 23rd Feb., 1993, respondent No. 3 had tentatively accepted the original purchase order dt. 24th April, 1992, passed under s. 269UD(1) of the Act as per her letter dt. 14th May, 1992. Respondent No. 3 has then stated in her written submissions that the petitioner's challenge to the order passed by the Appropriate Authority should not be allowed to cause prejudice to her interest particularly by reason of the delay involved in the Court proceedings. She has, therefore, claimed in her written submissions that if the impugned order of compulsory purchase passed by the Appropriate Authority is affirmed, respondents Nos. 1 and 2 should be directed to pay interest to her at 20 per cent per annum and in case the said impugned order of the Appropriate Authority is set aside, the petitioner should be directed to pay her the interest at the rate of 24 per cent, per annum particularly when, according to her, there is an interim stay of the impugned order of the Appropriate Authority granted by us pending decision in the instant writ petition as a result of which she cannot get the ba....
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.... of plot Nos. 2 and 3 owned by Shri Satish Kale became 1,385.57 sq. mt. because of which the FSI of his land increased to 1.25. In support of the above fact, the petitioner has placed on record the letter of the Assistant Engineer, Building Department, Nagpur Municipal Corporation, Nagpur, dt. 17th March, 1993, addressed to Shri Satish Kale, Civil Lines, Nagpur, which shows that according to bye-law No. N. 1.1.3 of the building bye-laws and D. C. Rules for Nagpur City, the FSI is 1.25 if the plot area exceeds 1,000 sq. mt. The above facts in para 9A of the petition are not disputed by respondents Nos. 1 and 2 in their return. The submission on behalf of the petitioner on the basis of the above facts is that since Shri Satish Kale was the owner of the adjoining plot and since he was benefited by the increase in FSI he paid higher value for purchase of the area admeasuring 4,839.5 sq. ft. of plot No. 2. The said purchase by him, therefore, according to the petitioner does not reflect the true and fair market value of the said land. The above submission made on behalf of the petitioners is well founded. In assessing the value of the land, its special value to an owner of an a....
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.... that the appreciation in the market rate of the land from the date of the agreement of sale considered under the said Rules is eight per cent per annum. If without any material on record to show to what extent the appreciation in the value of the land is during the time gap between the transaction in the sale instance and the transaction of the suit land, if a mere hypothetical appreciation is to be taken, there appears to be no justification for not taking the same rate of appreciation which is taken under r. 48-I for calculating the discounted value of the consideration as on the date of the agreement of sale. It is not thus safe to rely upon the above sale instance for determining the question whether the valuation of the suit land is grossly understated. At any rate when such a hypothetical rate of appreciation is taken, some allowance has to be made while applying the test of difference of 15 per cent or more for probable errors while determining the question whether the suit land is grossly undervalued or not. It has to be borne in mind that even as per the circular styled as Instruction No. 1/A 88 of the CBDT referred to in C. B. Gautam's case (supra), and the ....
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....h in other words represents the market value as determined as on that date, i. e., the date of agreement of sale. It is further difficult to see how such a market rate can appreciate within a period of three months after which the balance of consideration has to be paid. 10. Turning next to the sale instances cited by the petitioner, i. e., by her valuer in his valuation report enclosed with her reply to the show-cause notice show that the land rate of the suit land represents its true and fair market value, it is necessary to see that although the Appropriate Authority has rejected the sale instance dt. 23rd Nov., 1989, of the Civil Lines area itself relied upon by the petitioner on the ground that there is considerable time gap, the sale instance dt. 26th Dec., 1990, relied upon by it is also much prior to the sale transaction in question in the instant case which is dt. 24th Feb., 1992. Although, as we have held above, there is no material to show how the appreciation at the rate of 12 per cent per annum is given to the transaction in the sale instance for the time gap between it and the sale transaction of the suit land, there is no reason why similar or at any rate so....
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....n the sale instance dt. 23rd Nov., 1989. It is, therefore, difficult to see how the land rate of the suit land is grossly understated. 11. As regards the second sale instance upon which reliance is placed in the valuation report of the valuer submitted by the petitioner along with her reply to the show-cause notice, the said sale instance is rejected by the Appropriate Authority on the ground that it is a sale to the tenant in occupation. It is true that a tenant in occupation of the land is most likely to pay the price of the land in his occupation, which is lower than its market price. But then in rendering such a finding the Appropriate Authority has acted in an arbitrary manner because in the sale instance relied upon by it, the purchaser of the land was the owner of an adjoining land who was to benefit by the purchase of the said land by getting a higher FSI for the land, in which case, he was most likely to pay a price which was more than the market value of the land purchased by him. The Appropriate Authority should have in all fairness rejected the said transaction as not being a comparable sale transaction as it has done in regard to the above sale transa....
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....d by the Appropriate Authority is Rs. 221 per sq. ft. cannot thus be said to be grossly understated. 12. We have pointed out above that the sale instance selected by the Appropriate Authority of the land purchased by Shri Satish Kale cannot reflect its proper market value because he was an adjoining owner who wanted to purchase the adjacent land for his own benefit, i. e., for getting higher FSI of 1.25. He would, therefore, offer a higher price for the said adjoining land in the sale instance relied upon by the Appropriate Authority. This is clear from the first sale instance cited by the petitioner in which the sale of the land is by Mr. A. S. Bobde, Advocate to Tata Iron and Steel Co. which land is situated in Civil Lines itself. The said land has a prime location as it is on the main road. If the said land is sold at the rate of Rs. 175 per sq. ft., it is difficult to see how in one year's time, i. e., on 26th Dec., 1990, when the sale agreement of the land in the sale instance relied upon by the Appropriate Authority has taken place, the discounted rate would shoot up to Rs. 304.20 per sq. ft. This would thus clearly demonstrate that for his own benefit, i. e., to....
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.... of the suit land free from encumbrances on the date of execution and registration of the sale deed. This is yet another infirmity in the order of compulsory purchase passed by the Appropriate Authority in the instant case. It is thus necessary to see that the IT Department must make genuine efforts to find proper material or proper sale instances which are comparable time-wise and location-wise with the sale transaction of the property in question under the agreement of sale before proposing its pre-emptive purchase, so that the bona fide purchasers are not harassed and the bona fide transactions are not hampered as in the instant case where because of the reliance placed by the Appropriate Authority upon the sale instance which does not compare with the suit transaction, the parties to the transaction are required to suffer because of the delay in completion of that transaction caused by the Court proceedings. The Appropriate Authority must keep in mind the instructions issued by the CBDT referred to above in which the object of compulsory purchase of the immovable properties, which is pointed out, is to prevent proliferation of black money in real estate transactions an....
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....ers based upon the rates of properties maintained by the State Government for the purpose of checking evasion of stamp duty on transfer deeds cannot, therefore, be accepted. However, that would not mean that the Department has correctly determined the market value of the suit plot. 16. There is also force in the contention raised on behalf of the petitioner that in the absence of the particulars of the material or the reason(s) being disclosed in the show-cause notice for entertaining a tentative or a prima facie view that the value of the suit land is grossly understated in the agreement of sale between the parties, the transferor and the transferee have no real opportunity to meet the case of the Appropriate Authority or the IT Department concerned in that regard and hence there is non-compliance with the basic principles of natural justice. The show-cause notice issued by the Department for pre-emptive purchase by the Central Government under Chapter XX-C of the Act must disclose how the tentative or prima facie conclusion is arrived at by the Appropriate Authority that the property sought to be compulsorily purchased is significantly undervalued, which means that if an....
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....basic tenets of the principles of natural justice which we have referred to above as requirements of a proper show-cause notice. 17. As regards the contention on behalf of the respondents that the obligation to disclose the reasons or the relevant material to the transferor and the transferee upon which the Appropriate Authority has based its prima facie view that the property in question is grossly undervalued needs to be dispensed with on the ground that there is restraint of the time frame within which the order of compulsory purchase has to be passed, it may be seen that for the purpose of passing an order of compulsory purchase and even before issuing a show-cause notice, the Appropriate Authority has to make and makes an enquiry and collects material within the time frame to determine whether the property in question is grossly undervalued or not. When it does so and reaches a prima facie view within the time frame upon the above question of gross-undervaluation, the time restraint in taking action under s. 269UD cannot be a reason for not disclosing the said material in the show-cause notice which is a must in view of the judgment of the Supreme Court in C. B. Gauta....
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....the question of time-frame and summary nature of enquiry has no relevance to the question of incorporating in the show-cause notice the particulars of the material in the possession of the Appropriate Authority on the basis of which it entertains a view that the property in question is grossly undervalued. 20. The petitioner is, therefore, clearly prejudiced in her defence since the relevant material upon which the prima facie view of the Appropriate Authority that the property in question is undervalued is based is not disclosed in the show-cause notice given to her. The impugned order of the Appropriate Authority passed pursuant to such a defective show-cause notice is thus illegal and is vitiated for not being in consonance with the basic principles of natural justice. 21. In the light of the view taken by us above, it cannot be held that the Appropriate Authority has proved by clear and cogent material on record that the suit land is significantly undervalued, which is a criteria laid down by the Supreme Court for compulsory purchase of immovable property under s. 269UD of the Act in C. B. Gautam's case (supra). The impugned order of the Appropria....
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....um of Rs. 40,00,000 was paid by cheque and the possession of the two godowns, guard-room, office premises along with 1/4th Undivided share of the remaining open land was delivered. From No. 37-I along with a copy of the agreement was submitted under section 269UC on December 31, 1993. The Valuation Officer of the appropriate authority of the Income-tax Department, vide his letter dated January 18, 1994, informed the petitioner and the seller for inspection of the property on January 21, 1994. The appropriate authority, after receiving the report from the Valuation Officer, issued a show-cause notice on March 8, 1994, under section 269UD(1A) of the Act on the ground that the apparent consideration was lower for various reasons mentioned therein and the value of the land is much higher than the agreed rate. An example of a plot of land at A-90, Triveni Nagar, near Durgapura Station, sold by the Jaipur Development Authority on November, 7, 1992, at Rs. 1,781 per. sq. metre was taken. Adjustment of five per cent. on account of less development of the plot and ten per cent. on account of general condition of the plot was given and 12 per cent. was added on account of the time gap. On th....
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.... were approved could not be acted upon. According to the submission of learned counsel for the petitioner, out of the total area of 7,943.48 sq. metres only 1,087.74 sq. metres is capable of being developed commercially and the saleable are comes to 13.693 per cent; and the rest of the area would form part of the roads, parking and other open spaces. If the rate of Rs. 1,800 per sq. metre is applied, the total value of the land would come to Rs. 19.58 lakhs. The godowns are being used for storage purposes and if the industrial use of the land is taken into consideration, then it should be on the basis of the rate charged by the RIICO for industrial land which is Rs. 100 per sq. metre for fully developed land. Even if the valuation is to be taken on the basis of the residential plot, the cost of development and reduction of area on account of the facilities have to be taken into consideration besides the fact that it would take around 12 months to develop the property over which at least Rs. 18 lakhs would have to be deducted on account interest alone. Possession has been taken only of land covered under godowns and the open area is said to be under the co-ownership of Smt.....
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....asthan Stamps Act as on April 1, 1991, was Rs. 777 per sq. metre and if 12 per cent. is added for the time-gap, it would come to only Rs. 963 per sq. meter. The rate notified by the Jaipur Development Authority on November 4, 1992, was Rs. 600 per sq. metre and if 12 per cent. is added thereon it would come to Rs. 672 per sq. metre. The average of the two plots in Triveni Nagar which have been sold at Rs. 1,043 per sq. metre and Rs. 1,781 per sq., metre comes to Rs. 1,411 per sq. metre and on that basis also the total cost of 5,242 sq. metres comes to Rs. 74.02 lakhs. The cost of laying roads and other amenities should be deducted therefrom. On the basis of the land approved by the Jaipur development Authority, for commercial use to the extent of 1,087 sq. yards, it is submitted that the cost should be calculated at Rs. 1,800 per sq. metre as fixed by the Jaipur Development Authority November 4, 1992, and if 12 per cent. is added for the time-gap, it comes to Rs. 2,016 per sq. metre and the total cost of this land comes to Rs. 21.93 lakhs from which deduction for demolition an interest charges should be given. I have considered the arguments of both learned counse....
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....tential. In the reply, the vendor has only stated that full consideration has been shown and the development needs 40 per cent. of the land to be left out for amenities, sub-division has to be approved by a large number of Governmental agencies. The petitioner has also submitted objections to the proposed notice as stated above. A certificate of sale of land in Triveni Nagar at Rs. 1,300 per sq. metre of July, 1993, was also submitted. Further reply was submitted on March 24, 1994, and the copy of sale deed dated May 26, 1993, was also submitted. In the order dated March 30, 1994, the appropriate authority has taken the figure as mentioned in paragraph 2 of the order. On the basis of the reply submitted, the various contentions raised therein were also taken into consideration. The case was adjourned on the request of the parties from March 21, 1994, to March 24, 1994. The opportunity which has been given in the present case cannot be said to be not a reasonable one. The appropriate authority has also taken into consideration the fact that the transferor has assured the purchaser that the property sold is free from all encumbrances and the responsibility to get th....
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.... on for the point that the rate determined under the Stamp Rules cannot be determinative of the actual value of the property. The claim of Rs. 10 lakhs as registration charges and Rs. 15 lakhs of roads, water supply and electricity and for interest were also held untenable. The property was approved by the Jaipur Development Authority and for the reasons as stated by learned counsel for the petitioner that, on account of dissolution of the firm, the park project could not be implemented, Smt. Mithilesh Kumari sold her share. There is no restriction in respect of sale of the property which is privately sub-divided by different owners. Even the contention that the other co-owner may object to the area sold has been not proved by any evidence on record. The vendor has taken up the obligation on her part not only for sub-division but has assured the petitioner that the property under the agreement is free from all encumbrances and the conversion charges in respect thereof have already been paid. It is not on record as to how much conversion charges have been paid but, it is the responsibility of the vendor that, if the conversion charges are found to have been not paid she has....
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....g Services Group A holding the post of the Chief Engineer or, any equivalent or higher post. The transferor and transferee are to be given the opportunity and a reasoned order has to be passed. The respondents have to make the valuation of the property by taking into consideration all relevant facts and thereafter a decision has to be taken by the appropriate authority. Viscount Simon J., in Gold Coast Selection Trust Ltd. v. Humphrey [1949] 17 ITR (Suppl) 19 (HL) observed that, "valuation is an art, not an exact science, mathematical certainty is not demanded, nor is it possible ?" A certain element of guess has to be there based on objective factors having reasonable nexus with the evidence on record. The various factors are there on the basis of which out of the various methods by which the valuation of the immovable property can be made, appropriate method is to be adopted. It depends on the location of the property, the purpose for which the property is used, the nature of the property, the time when the agreement is entered into and similar other objection factors. The valuation, therefore, has to be done by a method which is more objective and could furnish reliable data to ....
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....ore, this method is rarely used. (iii) Residual method : Under this method, the valuation of lands or buildings is taken if they are developed or redeveloped. It is on the basis that the inevitable process of development or demolition and redevelopment goes to meet the changing demands of the society. The value by direct comparison of sale of similar property which is developed in a similar manner is taken into consideration. This method is also known as the development method of valuation. The method is applied mainly in respect of old buildings which are demolished and new construction is raised thereon. (iv) Profit basis : Where the comparison of one with another is different since each property is susceptible to different factors which may have a dramatic effect on the figure of sale achieved. Even in the same market, the value of shops may differ on account of location. The profit which is derived on account of situation, location or special circumstances of the property is taken as basis for valuing the property. It is considered appropriate in respect of hotels, cinemas, shops, petrol pumps and other commercial properties....
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.... the approved map the seller has not taken any action and learned counsel for the Jaipur Development Authority who was issued notice in this matter has admitted that the map could be revised by the Jaipur Development Authority. So far as the valuation of constructions is concerned, it is not proved by any evidence on record that the valuation has incorrectly been arrived at. The only thing which has been said is that the valuation was not depicted in the notice so that the petitioners could have submitted their reply. Even if for the sake of argument, the contention is accepted, nothing is stated by the petitioner in the petition itself as to how the valuation has not correctly been arrived at or there is any mistake apparent, so that the order of valuing the cost of built-up area at Rs. 42 lakhs would be considered to be illegal or a mistake apparent from record or an arbitrary figure. The contention of the petitioner that the said godown is to be demolished is contrary to his own averment in the petition that the godowns are used for storing the goods and it will take a number of months in transporting the goods and that the petitioner is carrying on his business there, ....
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....ax Act, the Gift-tax Act, the Municipalities Act, etc., are important. In fixing the market value of a particular asset or property, the approach and analysis are likely to vary according to the subject-matter of legislation. The principles that are ordinarily applied in the case of non-fiscal statutes like the Land Acquisition Act cannot be applied mechanically to cases arising under the fiscal statutes. In Mani Singh Avtar Singh v. I.A.C. of I.T. [1985] 151 ITR 233 (P&H), it was observed that a plot built upon cannot be compared with an unbuilt not on which the purchaser has the opportunity of exercising a wide choice of building. In Debi Prosad Poddar v. CWT [1977] 109 ITR 760 (Cal), the following principles were laid down for the valuation of immovable property under the Wealth-tax Act (at page 773) : "(i) Attempt must be made to find out the price which the immovable property would fetch on the valuation date imagining a willing buyer to purchase the property from a willing seller in respect of the property; (ii) In respect of the immovable property, there is no fixed market such as market for shares or for other commodities, like sugar, clo....
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....y reference to the price which a seller might reasonably expect to obtain from a willing purchaser, but as this may not be possible to ascertain with any amount of precision, the authority charged with the duty to ward compensation is bound to make an estimate judged by an objective standard. The land acquired has, therefore, to be valued not only with reference to its condition at the time of the declaration under section 4 of the Act, but its potential value also must be taken into account. The sale deeds of the lands situated in the vicinity and the comparable benefits and advantages which they have, furnish a rough and ready method of computing the market value. This, however, is not the only method. The rent which an owner was actually receiving at the relevant point of time or the 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. But this also is not a conclusive method. This court had in Special Land Acquisition Officer v. T. Adinarayan Setty [1959] Supp. 1 SCR 404; AIR 1959 SC 429, indicated at page 412, the methods of v....
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....made for providing the minimum amenities of town life such as water connections, well laid-out roads, drainage facility, electric connections, etc. The process necessarily involves deduction of the cost of factors required to bring the undeveloped lands on par with the developed lands. An extent of 20 per cent. of the total land acquired was taken as a reasonable deduction for the space required for road. Apart from it, the cost of laying roads and other amenities like electricity, water, underground drainage, etc., was taken at 33 per cent." A distinction was also drawn between a tiny plot and a large area. In the case of Mirza Nausherwan Khan v. Collector, Land Acquisition, AIR 1974 SC 2247, the apex court observed that : "there is no doubt that the value of an extensive plot of land in a city, the strip that adjoins an important road will have a higher value than what is in the rear, for obvious reasons of potential user or commercial exploitation." In State of Kerala v. P. P. Hassan Koya, AIR 1968 SC 1201, it has been observed : "in determining compensation payable in respect of land with buildings, compensation cannot be determined by ascertaining the value of the land and the....
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....er is contrary to the established principles of law. It was further observed that this court is not sitting in appeal over the order passed by the appropriate authority and the satisfaction has to be arrived at by the appropriate authority on the basis of the valuation report and the relevant documents which have been taken into consideration. It is not the calculation or the manner which could be examined under article 226. The calculation is always a question of fact. Principles of valuation alone have to be considered. The respondents have taken into consideration the sale of the plot by the Jaipur Development Authority, at Rs. 1,781 on December 7, 1992. The said colony is situated in the inferior than the present land and necessary deductions have already been given to the petitioner. The land is said to be in the vicinity of the main road. The various arguments which have been raised by learned counsel for the petitioner to arrive at the value of the land are only hypothetical. The deduction as contemplated in the case of Sahib Singh [1992] Supp. AILACC 593 (SC) referred to above is given, still the value exceeds more than 15 per cent of the apparent....
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....nce under the contract itself, and even after the clearance by the appropriate authority certain obligations are to be fulfilled by the seller. Directions for payment of interest could be given in an appropriate case but I do not consider that the present one is an appropriate case for giving directions to the Central Government for making payment of interest in addition to the consideration and hence this plea is accordingly rejected. In view of the observations made above, there is no mistake apparent from the record nor could the order be said to be without application of mind or perverse nor could the order be said to be contrary to the established principles of law. The writ petition having no substance is hereby rejected. The respondent-Central Government shall make the payment to the seller within a period of 15 days on fulfilling the various obligations as contemplated in the agreement and under law." 3.3 We have considered the rival submissions and perused the material available on record. In the light of the above cases, now we shall examine the facts of the present appeal before us. The facts in brief are that the assessee is an individual, filed ....