TaxTMI 
TaxTMI 
2000 (10) TMI 177
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....o the DVO, for valuing the above two properties, for the valuation dates 31st March 1986, 31st March, 1987 and 31st March ,1988. The assessee had filed and approved valuer's report in regard to Cunningham Road property No. 15 & 17 wherein the approved valuer had taken its value at Rs. 11,70,000. The approved valuer had mentioned the area as 45,256 sq. ft. and had enclosed a plan along with his report. The plan refers to properties 15, 16 & 17) of Cunningham Road and mentions the area of the full property at 58,324 sq. ft. 3. Consequent to the reference made by the AO to the DVO, the property at Cunningham Road was inspected on 25th Nov., 1992, In the report, it has been noted that the property was purchased in the year 1974 and that one of the properties was tenanted by NCC (A Govt. of India unit) and had vacated the premises on 31st July, 1986. It is also noted that one small building was occupied by an ex-Member of Parliament. It has been further noted that the occupation of the small portion by the ex-MP does not come in the way of development of the property. The land area has been mentioned as 5,590 sq. mts. 4. Insofar as the built-up area of the old building is concerne....
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....are Rs. 1,950 per sq. mts. Rs. 2,250 per sq. mts. and Rs. 3,940 per sq. mts. For the three valuation dates viz. 31st March, 1986, 31st March, 1987 and 31st March 1988, respectively. The fair market value, accordingly, was determined at Rs. 98.28 lakhs, Rs. 113.42 lakhs and Rs. 198.49 lakhs, respectively, for the above three valuation dates. The DVO had observed, in his report under the heading "Objections and replies" that reference was made under s. 16A of the WT Act for valuing the property and that there was no direction for valuing the property with reference to Sch. III to the WT Act. He, accordingly, observed that valuation has been made on the basis of reference and it is open to the AO to decide about the applicability of Sch. III or otherwise. He also noted that the property was owned by co-owners and due allowance has been provided for the same. 6. The assessee had given a site plan which is at p. 50 of the paper book, in which it has been mentioned that the total area of the site is 60,165 sq. ft. and that the built-up area of the main building, out-houses, etc. is 15,190 sq. ft. 7. The objection of the assessees, primarily, is with reference to the AO restricting ....
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....he fact that it was let for all the three valuation dates, the proper method of valuation was rent capitalisation. 9. One ex-MP, Mr. F.M. Khan, was running INTUC office in the property at No. 16 and access to that was through properties at 15 and 17. The Ex-MP was also not paying any rent. One other small building was under the occupation of an army personnel and a Chowkidar both of whom were also not paying any rent. Based on the above facts, the submission of the assessee was that the valuation adopted by the DVO could not be taken as the correct valuation because it assumes non-existence of a building when the facts go to show otherwise, i.e. a building did exist on the relevant valuation dates. The plea was that these facts were brought to the notice of the CWT(A) vide letter dt. 10th July, 1995, but, the CWT(A) misled himself and adopted a totally different rate. 10. The submission made before the CWT(A) was that the detailed plan for construction of a hotel premises, as was approved on 9th Nov., 1989, showed existence of buildings on the land. A copy of the letter addressed to the Bangalore Corporation, dt. 15th Sept., 1991, intimating them about demolishing the existin....
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....luer had committed an error of not bringing this fact in his report. The valuation report, as filed by the assessee of the approved valuer, is of September, 1986, but the date on which the valuation is made is 31st March, 1983. Therefore, what transpired after the date of report could not be known to the Valuation Officer and, therefore, to this extent, the observation of the CWT(A) may not be justified. The CWT(A), considering the plea of the assessee for applicability to Sch. III and capitalising the rentals at receipt, observed that the buildings at Nos. 15, 16 and 17 occupied an area of 9,000 sq. ft. On this basis, he found the difference between the unbuilt area and specified area at 12,058 sq. ft while the 20 per cent of the aggregate area has been worked out at 12,033 sq. ft. The CWT(A) finally came to the conclusion that Sch. III is inapplicable. 12. The CWT(A) further had proceeded with the submission of the rent capitalisation on the basis that the rent received being paltry, would not reflect the true value. In fact, this he had done because he was of the opinion that Sch. III is inapplicable. He also considered the portion that was occupied by the ex-MP and that the ....
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....---- Rs. 1,242 10% for larger size Rs. 124 ------------ Balance Rs. 1,118 &n....
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.... in size (this aspect has been partly taken care of by belting method of valuation accepted by me), I would hold that the value of the properties as on 31st March, 1988, can be taken at Rs. 2,000 per sq. mt. in the place of Rs. 3,940 per sq. mt. estimated by the Valuation Officer. 13.7.3. Thus, I would recommend the value to be worked out at the following rates: I belt II belt (15,343 sq. ft.) 31-3-1986 Rs. 1,118 per sq. mt. 894 per sq. mt. 31-3-1987 Rs. 1,286 per sq. mt. 1,029 per sq. mt. 31-3-1988 Rs. 2,000 per sq. mt. 1,600 per sq. mt. The AO is directed to exclude 2,500 sq. ft. from the total area of 60,165 sq. ft. being in possession of tenant who cannot be vacated and to consider this as belonging to property in I belt. The value of the property is to be taken at Rs. 20,000 as directed at sub-para 12.2. of this order. The Valuation Officer has added Rs. 20,000, Rs. 25,000 and Rs. 30,000 towards salvage value of existing old building, as on 31st March, 1986, 31st March, 1987 and 31st March, 1988. As the bui....
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....31st March, 1987. The value as on 31st March, 1988, can be considered to be at least 25 per cent above that as on 31st March, 1987. (b) The property in question is corner plot while there is nothing to show that the cases cited are of corner plots. An escalation of 10 per cent over the cases cited may be justifiable in consideration of this. 16.2. Taking into account these aspects, I would direct the AO to adopt the value of this property as under: Valuation date Value suggested by the Value directed to be authorised representative adopted. 31-3-1986 Rs. 1,162 per sq. mt. Rs. 1,278 per sq. mt. 31-3-1987 Rs. 1,336 - do - Rs. 1,469 - do - 31-3-1988 Rs. 1,536 - do - Rs. 1,836 - do" 19. The rival submissions on the above issues have been very carefully considered. Touching, initially, with reference to the applicability of ....
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....rtion and rear portion at different rates. This was, perhaps, done on the basis that the front portion of the land would fetch more price than the portion at the rear. To our mind, this approach by the CWT(A) is quite reasonable. The CWT(A) approximation is based on the values as given by the assessee and, accordingly, the values taken at Rs. 1,286 and Rs. 1,479, for the front portion, for the valuation dates 31st March, 1987 and 31st March, 1988, in our view, is quite reasonable and does not call for any interference. However, for the valuation dates 31st March, 1988, the CWT(A) adopted a rate of Rs. 2,000 per sq. ft. which, in our view, is quite excessive and that the value suggested by the assessee is reasonable. We, accordingly, adopt a rate of Rs. 1,479 plus inflation per cent per sq. ft. as the value for the front portion of the property for the above valuation date. 22. For the rear portion, the values suggested by the assessee are Rs. 1,029 and Rs. 1,183 per sq. ft. for the valuation dates 31st March, 1987 and 31st March, 1988, respectively. The CWT(A) accepted the value, as above, as on 31st March, 1987, but increased the value to Rs. 1,600 per sq. ft. as on 31st March,....