TaxTMI 
TaxTMI 
1987 (10) TMI 82
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.... village, the CWT (A) erred in seeking to include the reversionary value of the land up to the year 1994 and beyond. Since these premises had been leases out to tenant, it was not open to the CWT (A) to include the reversionary value particularly in view of the fact that the tenant would be fully protected from eviction under the Bombay Rent Act. 2. Certain facts may briefly be stated. Dr. A. Gomes and Mr. B. Gomes had equal share in certain properties situated at Versova, Mogra, Amboli, Andheri, Bandivali, Juhu, Oshivara, Kevnigaothan, Caesar Road, Goregaon and Kapasi. The details of the area, the valuation by the assessees as on 31-3-1980 and 31-3-1979, the valuation adopted by the WTO on the basis of D. V. O. and that adopted by the CWT(A) as on 31-3-1980 in brief are as under : ----------------------------------------------------------------------------------------------- Details of area Valuation by assessees Valuation by WTO on Valuation as adopted as on 31-3-1980&nbs....
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....7,710 49,000 27,000 7. Veera Desai Road 2,70,000 4,13,000 3,92,700 (Amboli) 8. Juhu 1,02,600 25,72,000 8,55,000 9. Juhu 1,80,000 2,08,000 &nb....
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....ade by the assessees' valuers on 16-7-1974 and 20-6-1978. The department adopted the valuation as per the valuation reports of the D. V. O. and the CWT (A) adopted his valuation for the reasons given by him in his order. Before going into the details of valuation of each property, certain broad submissions which were made by Shri Mukherji may first be considered. 3. Shri Mukherji argued that the CWT (A) had completely ignored the legal effect of the ULC Act. Under sec. 3 of the ULC Act, persons were to entitled to hold vacant land in excess of the ceiling limit. Under sec. 6 of the ULC Act, the holders of vacant property were required to file statements of their vacant lands and under sec. 8 the competent authority is required to prepare a draft statement setting out what vacant lands are in possession of each holder. A notification was made on 30-6-1977 under sec. 10(1) of the ULC Act. Section 10(1) of the Act reads as under : "10. Acquisition of vacant land in excess of ceiling limit. - (1) As soon as may be after the service of the statement under sec. 9 on the person concerned, the competent authority shall cause a notification giving the particulars of the vacant land he....
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....p; S.No./H.No. Date of Builder's Name Consideration Agreement ----------------------------------------------------------------------------------------------- Versova 26/1-5 & 36/2, 31-3-79 Koputra Builders 1,60,200 4 & 5 Mogra 11/2 & 13/5/1 12-2-81 Lloyd Enterprises 2,00,000 Amboli &....
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....; 8,000 " 73/6 -do- -do- 6,000 Amboli Pardi Pardi 8/1 & 2 -do- -do- 9,000 Andheri (W) Caesar Rd. C.T.S. 578 -do- -do- 72,000 near Church Amboli, Andher....
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....on dates. He lastly argued that the sale instances relied upon by the Valuation Officer did not in a single instance relate to a property which is hit by the ULC Act. 5. The second limb of Shri Mukherji's argument was that some of the plots at Versova, Mogra and Amboli were subjected to adverse possession. Such plots were in the possession of either cultivators or hutment dwellers and in support of this argument Shri Mukherji filed copies of 7/12 extracts of some of these lands. The lands at Survey No. 26 at Versova and Survey Nos. 11, 13 and 22 at Mogra and Survey Nos. 55, 55, 73, 25, 24 and 22 at Amboli were in the possession of cultivators at Serial No. 17A at Oshiwara, 41 & 42B at Bandivali, 156 at Goregaon, 76 at Kapashi and 571 at Kevni Gaothan were in the possession of hutment dwellers. Shri Mukherji argued that the Valuation Officer had failed to take into account the provisions of the Bombay Tenancy & Agricultural Land Act, 1948 so far as the land occupied by the cultivators were concerned. He further argued that the lands occupied by hutment dwellers had also gone down in value inasmuch as the right of such trespassers became absolute after 12 years in view of the prov....
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....on Officer of the department in the instant case. After following the 'yield or rental' method and having arrived at a figure the Valuation Officer has added to it the value of an imaginary reversion in future. We invited Mr. Pal to cite any authority which has approved or indicated this method but he was unable to do so. It is stated in Parks' Valuation (at p. 38) that when a property is valued on rental basis the result is the value of the land and building taken together which cannot afterwards be apportioned. In the method adopted by the Valuation Officer the value of the land is taken twice; being included in the amount arrived at by the 'yield or rental' method and again under the 'reversionary' method. This is an entirely novel approach but in our view erroneous." Shri Mukherji also relied on another decision of the Calcutta High Court in Sudesh Chandra Talwar v. CWT [1982] 137 ITR 483 where the aforementioned decision in Mrs. Ashima Sinha was followed. He also brought to our notice a decision of the Indore Bench of the Tribunal in the case of Smt. Rubabbai Inayat Hussain v. WTO [1983] 5 ITD 526. The same argument was advanced by Shri Mukherji in respect of the valuation ....
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....agree, have to be taken into account while determining the value of the lands. Thirdly, we agree that the lands, which are tenanted or which are given on lease, have to be valued by applying the principle of rent capitalisation. Fourthly, we accept the argument the in respect of property at Juhu which is given o lease, no separate addition can be made in respect of the reversionary value of land in view of the decisions of the Calcutta High Court in Smt. Ashima Sinha's case. Fifthly, we hold that in respect of the lands where agreements to sell have been entered into and sale consideration received, the amount so received will reflect the true market value on the date of valuation nearest to the date of sale or sale agreement, as the case my be. Such price would also provide a good guidance for determining the valuation of that land for earlier years. Lastly, we agree with Shri Mukherji that in respect of such of the properties at Amboli which are built up, tenanted and used as residence, rule 1BB is clearly applicable and the reversionary value of land cannot be separately added. In this regard, the contentions raised by the Sr. Departmental Representative in the departmental appe....
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....operty 1. Versova Village. 2. Monga Village. 3. Kapasiwadi. 4. S.V. Road, Mogra, Andheri (W), Bombay (vide item No. 18 in the statement of properties given by the assessee at page 15 of compilation). 5. Amboli Village (vide item No. 20 of the statement &nb....
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....omeration is Rs. 10 per sq. metre. Having regard to this rate of compensation, the assessee could expect to get at least Rs. 1,16,254 in the event of the Government acquiring the land. At the same time, this land was sold for Rs. 1,60,200 in March 1979. After taking into account these two facts and the valuation placed on it by the CWT (Appeals) and all other factors which have been brought to our notice and to which we have referred hereinabove, we would hold that the ends of equity would be met if the value of this land is adopted at Rs. 1,20,000 for the assessment year 1977-78 and Rs. 1,40,000 for the assessment year 1978-79. The valuation of this land at Rs. 1,60,200 for the assessment years 1979-80 and 1980-81 as declared by the assessees themselves is confirmed. 9.2 The next property is Mogra village situated at Jogeshwari (E). This consists of three different plots of land admeasuring together 10,874 sq. yds. One property at Survey No. 22/1 and CTS No. 338 is not a property which is agreed to be sold, whereas the other two properties at Survey Nos. 11/2 (3,235 sq. yds.), and 13/5/1 (75 sq. yds.) have been sold with the occupants on 'as it where is' basis to M/s. Lloyds En....
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....put by the CWT (Appeals) on these properties at Rs. 1,50,000 for the assessment years 1977-78 and 1978-79. 9.3 As regards the plot No. 22/1, which is not a subject-matter of sale and which is encumbered by hutment dwellers besides being a land-locked plot, the CWT (Appeals) has put the fair market value of this plot at 50 per cent of the value put by the D. V. O. because, according to the CWT (Appeals), the value of land-locked property should be 1/4th of the belt rate. He has valued the same at Rs. 1,70,000. In our opinion, the CWT (Appeals) has not given adequate weight to the fact that apart from being a land-locked plot, this plot is also encumbered with hutment dwellers. On the other hand, it is laos a large plot of land nearer to the Eastern Express Highway. After taking this tact into account and after taking note of the fact that other two plots which were also encumbered by tenants did fetch Rs. 2 lakhs in 1981, we would value this plot at Rs. 1 lakh for the assessment years 1977-78 and 1978-79 and at Rs. 1,20,000 for the assessment years 1979-80 and 1980-81. The valuation of this property would be re-calculated accordingly. 9.4 The next property is the one at Kapash....
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....ound that the instance of sale cited by the Valuation Officer in Annexure 1 and in particular instance No. 3 of his report of sale of plot No. 30 at S. V. Road, Andheri, admeasuring 714.60 sq. metres giving a rate of Rs. 675 per sq. metre was a comparable rate. The Valuation Officer has given proper margin for the fact that this plot was.near the Andheri Rly. Station and has adopted a rate of Rs. 350 per sq. yard as the rate applicable on 31-3-1977 and deferred for 21 years. We are inclined to agree with the CWT (A)'s conclusion in respect of this property particularly when we see that the property has fetched almost double the price in 1981 with all the encumbrances that it is supposed to have. Here again, we do not find it necessary to interfere with the order of the CWT (A) which is well-reasoned and well-documented. The values put be the CWT (A) on this property are subsequently confirmed. 9.6 The next property for consideration is situated at Amboli Village, Vira Desai Road, Andheri (W), Bombay. This property consists of two plots with part of Survey Nos. 18 and 19 and Survey No. 17 admeasuring in all 13,107 sq. yds. This property has been valued by the assessees' valuer at....
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....ed as surplus land in the hands of the assessees by a notification under section 10 of the ULC Act. He pleaded that the whole of the property has been leased out to Bharat Petroleum and its net rent may be capitalised in perpetuity and that the deferred reversionary value and the potential value put on it by the D. V. O. was not justifiable in view of the provisions of section 12 of the Bombay Rent Act. The CWT (A) has dealt with the valuation of this property at great length on pages 23 to 27. After taking all the arguments, which are summarized as above, into account, the CWT (A) concluded as under : "Considering the large size of the appellant's plot and considering the fact that the purchaser of this property will not get the full return on his investment for another 22 years, it will be proper if the rate of Rs. 100 per sq. yd. (which is ridiculously low for a plot of 8,551 sq. yds. in Juhu) is applied for valuing this property. This will compensate for all the adverse factors present in this property and also account for the value of the ownership rights of the appellants. The fair market value of Rs. 8,55,100 will include also the reversionary value of the present rental ....
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....t, section 7, it is the duty of the WTO to form his opinion as to what be the market value of the property on the relevant date. The submission of the valuer's report either one way or the other cannot be determinative of the value which a property will be supposed to fetch in an open market on the relevant valuation date, as has been aptly observed : "In any event, even if the valuer was an expert, he is not a witness of fact but a mere witness of an opinion. That opinion therefore, cannot bind the court or the Tribunal or the income-tax authorities.' [See the observation of Chief Justice P. B. Mukherji, in the case of Mahmudabad Properties (P.) Ltd. v. CIT [1972] 85 ITR 500 (Cal.) at page 528]." On the facts of that case, they held that rent capitalisation was the best method for arriving at the valuation of the property. In the other decisions of the Calcutta High Court in the case of Subhkaran Chowdhury v. IAC [1979] 118 ITR 777, and in the case of CIT v. Panchanan Das [1979] 116 ITR 272, the High Court has consistently followed the same view. We are, therefore, of the opinion that the CWT (A) was not justified in valuing this property by adopting an ad hoc value of Rs. 1....