TaxTMI 
TaxTMI 
1977 (11) TMI 72
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....d in the order under s.269F(6) are: (1) M/s. Minerva Dealers Pvt. Ltd. (2) M/s. Ranee Gunge Association Ltd. both having their head offices at Calcutta. The Transferee is stated in the said order as M/s. Bishen Udyog Premises Co-op. Society Ltd. The competent authority received from the Sub-Registrar a copy of Form No.370 required to be enclosed by the transferee along with the instrument of transfer, as proved in s.269P(1) of the Income-tax Act, 1961, (hereinafter referred to as the Act). This form indicated that the land was freehold, floorwise plinth area of the building was 30,960 sq. ft. Being the build up area(shed) and the years in which the building was constructed was shown as 1971 mentioning in bracked that the occupation certificate was dated 1st Nov., 1971. The persons in occupation of the property were stated to be members of the society, the Bishen Udyog Premises Co-op. Society Ltd. The consideration for transfer was stated to be Rs.4,80,433.50. The estimated fair market value of the property was stated to be the same. Against Column No.7 which requires the Transferee to state the name and address of any other person (s) interested in the property the remark ....
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....eration of Rs.4,80,433.50, the conveyance having been executed on 30th June, 1972. The property was said to be inspected by him in the company of Transferees on 23rd March, 1974 and was said to comprise of a godown shed of a permanent type constructed during 1970. Before the transfer it was stated to have been used as food-grain godown. The property was said to be situated at a distance of 2 to 3 kms. from Mulund Railway Station and 75Km. from Bombay Agra Road. It had an approach, the report said, from the Bombay Agra Road. The building was stated to be constructed of R.C.C. columns over which tested steel trusses and asbestos cement sheets covering for the roof. The gaps between R.C.C. columns in the tower walls were said to be filled with 9" brick masonary walls and the height of the building upto the bottom of the trusses was said to be 18'. Flooring was indicated as sufficiently thick to take the load of grain godown. It was however added that at certain places flooring had not been laid properly and because of this a suitable reduction had been made while working out the cost. The doors were stated to have been provided with steel rolling shutters and the windows and ventilato....
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.... not been correctly stated in the Transfer Deed, and the correct value appeared to be Rs. 7,94,000. As this value was said to be far in excess of the purchase consideration shown in the deed, he held that the purchase consideration had undoubtedly been grossly understated. He, therefore, further held that it was a fit case for initiation of proceedings under s. 269C and accordingly there was a need to issue a Notice under s. 269D(1) of the Act for publication in the Official Gazette. According to him, the following conditions for the issue of Notice had been fulfilled: (i) He had reason to believe that the fair market value of the property exceeded Rs. 25,000 (2) He had also reason to believe that the fair market value of the property transferred exceeded the apparent consideration by more than 15 per cent of such apparent consideration ; and (3) He had further reason to believe that the consideration for the transfer as agreed to between the transferor and the Transferee had not been truly stated in the deed of conveyance with the object of: (a) either facilitating the reduction or evasion of the liability to tax of the Transferor or (b) Facilitating the concealment....
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....age by the ward Inspector by beat of bataki on 13th Jan, 1976. There is no dispute that the other formalities like pasting of notices, obtaining of C.I.T's approval, etc. were duly complied with as provided by law. 6. Thereafter there was a change in the incumbent of the post and one Shri V.R. Amin took over from Shri J.M. Mehra. The Transferee has enclosed with the grounds of appeal a letter dt. 26th June, 1976 by Shri V.R. Amin to the Valuation Officer Unit VII of the Income-tax Department sending him a copy of the objections raised by the Transferee as per letter dt. 28th May, 1976 and expressing an opinion that on examination of the evidence produced it appeared to him that it would be difficult to consider the agreement of sale date 30th March, 1971 as ante dated. He also added that while the fair market value had to be determined as on the date of conveyance, for the purpose of determining whether the understatement of the consideration in the transfer deed was with a view to facilitating the reduction or evasion of liability to tax or not or whether the difference between the apparent consideration and the fair market value was merely because of the efflux of time it woul....
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.... had submitted through letter dt. 17th Feb, 1976 by D.M. Harish & Co. The cost per bay at Rs. 11.33 per sq. ft. Which however, was subsequently modified, after obtaining the Architectural and structural designs to Rs. 12.36 per sq. ft. As per letter dt 2nd April, 1976, just because the valuer had objected to the first valuation on the ground that the rate analysis was not accompanied by architectural and structural designs. M/s. D.M. Harish & Co. also pointed out by giving comparative sale instances of lands sold for residential and industrial purposes at Marol and Thana, that the industrial plots positively fetched at least 50 per cent less than the residential plots. It was further pointed out that after acquiring the property the Transferee was required to spend an additional amount of Rs. 1,01,296 on the following items for which it held proper vouchers: Flooring Rs. 52,704 Water supply and sanitary works Rs. 32,572 Filling, levelling, and reconditioning of the existing roads Rs. 9,873 Construction of electric sub-station Rs. 6,140 . Rs. 1,01,297 It was further claimed that taking into account the fact that the property was agreed to be purchase....
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.... the 5 partners of M/s. Bachooli Tin Factory had themselves made a voluntary disclosure on 29th March, 1976 admitting that they had paid Rs. 80,000 more to Minerva Dealers Pvt. Ltd; for which an affidavit was also made on that date, a copy of which is made Annexure II to the order of the competent authority. The 4th plot was again sold by M/s Minerva Dealers Pvt. Ltd; to Bombay Telephones in 1973 at Rs. 32.50 per sq. yard and this plot which admeasured 29,800 sq. yard was also situated within what is known as Minerva Estates. Replying on these instances, the Revenue claimed that the assessee's estimate for its own land at Rs. 10 per sq. yard was impossible to accept. It was also claimed by the Revenue that the cost of construction could not be less than Rs. 20 per sq. yard because that estimate was based on the experience gathered by the Government's valuers. 8. In the course of these submissions and counter-submissions, the then competent authority, Shri N.J. Mehra, had prepared a draft order intended to be passed under s. 269F(6) of the Act, which was sent to the Transferor and the Transferee by his successor Shri V./R. Amin. The Transferee's objections and correspondence cont....
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.... Rubber Machine Tools Rs. 35,000 . . . Rs. 1,50,000 Needless to say that all these seven parties ultimately joined as members in the Co-operative Society known as "Bishen Udyog Premises Co-operative Society Ltd." (Referred to as "the Society" for brevity's sake). We were informed by the learned counsel for the Transferees that M/s. Bishen Silk Mills, which was having its small factory in Bhandup area had received a Court's order to vacate the premises, the same not having been located in the Industrial Zone or the Industrial area, and it was hence that M/s. Bishen Silk Mills was anxious to get into the Mulund Industrial Area. We were also told that as soon as Shri Radhesham Peshawaria could enter into an agreement with M/s. Minerva Dealers Pvt. Ltd. for acquiring the property, he joined hands with some others including friends in order to acquire the property jointly and to form a Co-operative Society of 11 members for the 11 sheds. It was only because of this, he pointed out that six other members apart from M/s. Bishen Silk Mills paid on 30th or 31st of March, 1971 a total sum of Rs. 1,45,000, which together with Rs. 5,000 of Bishen Silk Mills was deposited in t....
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....hesham Pershawaria subsequently fulfilled the requirements and the Society was finally registered on 9th Nov., 1971 as per Certificate filed at page 13 of the paper-book. As per letter dated 25th Oct., 1971 by the Thana Electric Supply Co. Ltd. It also acknowledged to M/s. Bishen Silk Mills receipt of cheque of Rs. 2,304 for electricity deposit. The Municipal Corporation also sent a letter to the Society for the Municipal taxes due from 1st Dec.,1971 to 31st March, 1972, vide page 17 of the paper-book. There is then a letter dated 14th Dec., 1971 from the Licensing Department of the Municipal corporation addressed to M.s. Bishen Silk Mills giving a finding of the Inspection by the Factory Inspector, which is to the effect that on the day of his visit he had found installed 21 Power Looms, out of which ten were working. All these and other correspondence filed in the Transferee's paper-book is referred to indicate the stand taken by the Society and its promoter to get the industrial estate moving even before the final conveyance was executed and registered. 10. We may then refer to the agreement of sale dated 30th March, 1971, which is at page IF of the paper-book. This agreement....
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....ent of sale and upon payment of Rs. 1,50,000 the Vendor had handed over possession of seven units admeasuring 16,000 sq. feet already constructed. This clearly indicates part performance of the contract. There is no dispute that before the conveyance was executed on 30th June, 1972 the rest of the four sheds had been completed, and delivery of possession thereof had also been given to the society in Nov., 1971. The Conveyance Deed dated 30th June, 1972 is at page 20 the Transferee's paper-book. It mentions M/s. Minerva Dealers Pvt. as the first Vendor and Raneegunge coal Association Ltd. As the Second Vendor and Shri Radhesham Peshawaria, styled as chief Promoter of the Society, is made a confirming party. The Purchaser is stated to be Bishen Udyog Premises Co-op. Society Ltd. which had then been registered. The conveyance also mentions in clause (vi) that the first Vendor had sold the new plot No. 116 to the second Vendor on the 1st of May, 1968 and which admeasured 2989 sq. yards. Clause (vii) also refers to the application made to the Corporation for amalgamation of Plot Nos. 115, 116 and 117. We may clarify at this stage that we are concerned only with plot Nos. 116 and 117 and....
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....ructed in 1969-70, though the sale of the shed areas was between 1973 and 1975 at rates varying between Rs. 20 and 24 per sq. feet. Just as in the case of the impugned property the big shed did not contain partition walls except R.C.C. columns at suitable distances. This shed was also constructed in a similar fashion. There is no dispute that when the shed areas on plot Nos. 53,54,59 and 66 were sold an access road had been constructed by the Vendor which ran across the entire shed area and which covered a very major portion of the plot required to be left open except for the small amenity space right in the middle of the plot, around which the different shed areas were constructed. 13. Shri Jetly, the learned counsel for the Transferor, who represented the transferor in the matter of acquisition proceedings of these other sheds, asserted that the conveyances made for the different shed areas were all identical and one of these conveyances, is filed at page 189 of the Transferee's paper-book. This conveyance dated 25th Feb, 1974 is between M/s. Minerva Dealers Pvt. Ltd, and Sailesh Shivkumar Dalmia. Sub-clause (viii) thereof mentions that the large structure admeasuring 66,223 s....
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.... section) are applicable in the present proceedings? 2. Whether s. 269-F (9) contemplates registration of agreement to sell entered into prior to 15th Nov., 1972? 3. (a) Whether the proceedings initiated by issue of a notice dated 2nd May, 1974 and publication in Gazette dated 11th May, 1974 stood discharged, because of service of fresh notice on 1st Dec., 1975? (b) If answer to question 3(a) is in the affirmative, whether proceedings initiated by service of notice on 1st Dec., 1975 were barred by limitation? 4. Whether the mandatory provisions of s.269D (2) were complied with, and whether their non-compliance renders the proceedings invalid? 5. Whether reliance by the Competent Authority for its conclusion on the affidavit filed by the partner of M/s. H.A.H. Bachooali Tin Factory, which was not tested by cross examination was justified in law? 6. Whether on the facts of the present case proceedings under s.269C were correctly initiated and acquisition order passed under s.269F(6) was lawful? 7. Whether there was any evidence on record that Transfer of immovable property was with either of the objects set out in clauses (a) or (b) of sub-s. (1) of s. 269C. 8....
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....of 1970 and June, 1972 and consequently the picture would be completely lopsided if the fair market value as on 30th June, 1972 was to be considered. According to him there was not only a spurt in land prices but also in the cost of construction during this period of more than 1-1/2 years and hence the valuation ought to be made by considering the market conditions as existing in Nov., 1970 or at the most as on 30th March, 1971 when the agreement of sale was entered into. He said particular stress on the fact that one of the Competent Authorities, Shri V.R. Amin was clearly of the opinion, as evidenced by his letter dated 26th June, 1976 to the Valuation Officer, that it would be difficult to consider the agreement dated 30th March, 1971 as ante-dated and it would be necessary to make the valuation of the property as on 30th March, 1971 and not as at 30th June, 1972 as there Valuer had one till then. His next submissions was that it was very clear from the voluminous correspondence that Shri Radhesham Peshawaria throughout acted as a Promoter of the proposed Co-operative society and the parties interested had taken a number of steps right from November-Dec., 1970 to form a co-opera....
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....lots or the premises meant for commercial use, but inspite of this the transferee's submission was rejected on the flimsy ground that this principle would not necessarily hold good where large chunks of land were sold in an undeveloped stage. This according to him was very strange especially when Shri R.D. Gupta had not even visited the site, as claimed repeatedly by him before the Competent Authority, though the competent Authority had generally said that he might have done so incognito. This he claimed was very unusual especially when the transferee was strenuously opposing the valuation made by the Departmental Valuer. He then referred to the fact that the transferee on its part had produced evidence to prove that industrial plots would fetch a much lesser price than residential plots, very often being less than 50 per cent of the residential plots but as against this no attempt was made by the Revenue to controversy this evidence by any contrary materiel. He then claimed that the transferee's submission would be proved even on the basis of one of the instances cited by the Revenue, which referred to the sale of plot by M/s. Minerva Dealers Pvt. Ltd. To Bombay Telephones (Govern....
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....e plots did not suffer from the disadvantages which the transferee's plot suffered from inasmuch as when it was acquired there was not even a proper approach road, no access road, neither water not electricity and even the floor had not been constructed. Considering all these factors he claimed the price of Rs. 10 as estimated by the transferee for its own land was not at all unreasonable especially considering the time when negotiations took place. He agreed that when the first instalment of earnest money was paid, there was nothing in writing between the Transferor and the Transferee but claimed that in the business world such conduct was quite understandable and not uncommon, especially when the agreement to sell was made only four months thereafter. 17. He then claimed that the other instance of the plot sold by M/s. Minerva Dealers itself to M/s. Bachooali Tin Factory was also not comparable. A pare from pointing out that it was only at a very late stage that the transferor and the transferee were intimated about the affidavit made by the five partners thereof regarding the alleged on-money paid, which he claimed had no evidentiary value on the absence of proper testing of ....
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....ven this request was not acceded to without assigning any reasons. This he claimed was surprising indeed especially when an eminent authority like Shri Roshan Nanavati had stated in his book that the most proper way to estimate cost was to do it on the basis of item-wise rate analysis by considering specifications, and as against all the evidence tried to be produced by the transferee the only basis of estimate made by the Revenue at Rs. 19 per sq. Foot, was said to be their own experience. As to how that experience was gained and on what basis had never been clarified, he alleged. In addition the Revenue had failed to take due note of the sum of Rs. 1 lakh and odd spent by the society for developing the property to which reference has already been made, and if only this item is taken into consideration the cost would go up by Rs. 4 per sq. Foot, part of which can be attributed to developing the land and part to the structure. Merely because the structure used R.C.C. columns the life of the building could not be estimated at 50 years as claimed by the Revenue, he urged, because the Revenue had totally failed to consider the distance of the columns, the width of the spans, the natur....
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....uld be made as in Nov., 1970 or March, 1971. In this connection his first submission was that the entire arrangement was between M/s. Minerva Dealers P. Ltd. On the one hand and Shri radhesham Peshawaria on the other as an individual or as representing M/s. Bishen Silk Mills, and the arrangement could not be said to have been effected with the Co-operative society, because it was not at all in existence till as late on 9th Nov., 1971. His second submission on facts was that without prejudice to this and even assuming that that the proposed sale was for and on behalf of the Society, still it was not permissible to consider the fair market value as on earlier dated as claimed by the opposite side, because the agreement of sale dt. 30th March, 1971 was, in his opinion, ante-dated. That according to him was an after-thought and was put up merely to enable the transferee to claim that the fair market value should be taken as on an earlier date. His next submission was that the fair market value had necessarily to be estimated as on 30th June, 1972 and that was properly estimated at Rs. 7,94,000 after considering all the pros and cons as discussed in the order of the Competent Authority.....
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....re was evidence to indicate that it was in the habit of charging on-money. This had been established, he claimed, by the Affidavits made by the partners of M/s. Bachooali tin Factory, who had stated in no uncertain terms that they were required to pay on-money of Rs. 80,000 through the apparent consideration shown in the deed was only Rs. 1,46,494. A Vendor like this would not have spared the transferee from charging on-money on the sale effected to the transferees, he claimed. He further invited our attention to the sale of an open plot of land by M/s. Minerva Delaers Pvt. Ltd. To Bombay Telephones (Government of India) at the rate of Rs. 32.50 per sq. yard in 1973 and claimed that this instance itself indicated that the correct price was not shown in the instrument executed with the Society. According to him M/s. Minerva Dealers P. Ltd. Could not have charged on-money to a Government Department and hence that price was the correct price of open plots in that area and even on that ground the price of Rs. 30 per sq. Yard estimated by the government Valuer was not excessive. 21. So far as the cost of construction was concerned it was his case that the cost was properly estimated ....
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....e instrument as registered under the Registration Act. It is without doubt that the agreement of sale was not registered and hence will not fall within the definition of s. 269-A(f) of the Act. From this it follows that the fair market value as defined by s. 269-A (d) would mean the price that the immovable property would originally fetch on sale in the open market on the date of execution of the instrument of transfer which is registered, which in this case would mean the conveyance deed. In this connection we may also refer to s. 269-F,(9) of the Act which states that in respect of any immovable property no objection shall be entertained on the ground that although the apparent consideration for the property is less than the fair market value as on the date of execution of the instrument of transfer, the consideration as agreed to between the parties has been truly stated in the instrument of transfer because such consideration was agreed to having regard to the price that the property would have ordinarily fetched on sale in the open market on the date of the execution of the agreement of sale of the property except where such agreement has been registered under the Registration....
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....s of s. 269E(3) of the Act, which authorises the Transferor and the Transferee to take objection even in regard to 269C(2) (a) that it would not apply in its case because the fair market value of the property did not exceed the apparent consideration by more than 25 per cent of the apparent consideration. The Delhi High Court in Mahavir Metal Works Pvt. Ltd. vs Union of India(1) has gone to the extent of ruling that the presumptions to the extent of ruling that the presumptions in either of the cls. (a) and (b) of s. 269C(2) are rebuttable and this is proved from the provisions of s. 269E(3). Their Lordships said that the presumption raised in s. 269C(2) is reasonable because justice requires that the person who acquires property for a consideration less than the market value of the property should be required to displace the presumption and if the purpose is genuine he should be able to rebut the presumption. Apart from the question whether the presumption contained in s. 269C(2)(a) is or is not rebuttable, there is no doubt that the presumption contained in s. 269C (2)(c) is positively rebuttable as is clear from the very wording of section. Even assuming that the presumption con....
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....bly of different nature but have also in a sense distinct and independent spheres of operation." (14)..................................................... Certain further consequences also follow. The irrefutable presumption under s. 269-C(2) (a) being one arising only where the fair market value exceeds the apparent consideration by more than twenty-five per cent, cannot then apply to this case. No doubt eve so, the very fact that the apparent consideration is less than the fair market value would be sufficient to attract s. 269C (2)(b). But the presumption there is, as we have already seen, very much open to be displaced. Even taking note of the fact that s. 269F,(9 would not allow the parties to make use of the unregistered agreement prior to the instrument of the transfer to contend that the apparent consideration was the fair market price of the property as on the date of that agreement, the fact strikes us that that sub-section in no way debars the assessee from still contending and proving that in spite of the presumed understatement of the actual consideration in the instrument of transfer, there had been on the part of neither the transferor nor the transferee the ob....
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.... and secondly that the agreement of sale was ante-dated. These submissions we find difficult to accept. It is needless to refer to the evidence on record which we have already discussed, and the several pieces of correspondence undoubtedly indicate that Shri Radhesham, Peshawaria acted in the capacity of chief Promoter of the proposed Society, which had not come into existence till as late as on 9th Nov., 1971. Even though the initial payment of Rs. 10,000 was made by M/s. Bishen silk Mills, then claim of the transferee was that they were trying to gather other members to form a Co-operative Society and to purchase the industrial site which was certainly in excess of the requirements of M/s. Bishen Silk Mils, This is not an unbelievable position and the subsequent events do in fact prove the transferee's claim. Shri Radhesham Peshawaria had in fact intimated as early as on 10th Dec., 1970 to the Assistant Registrar of Co-operative Societies that ten other members had agreed to join with him and had hence requested the Assistant Registrar to permit the proposed society to adopt the name of either M/s. Bishen co-operative Industrial Estate or Mulund Co-op. Society. The Asst. Registra....
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.... the competent authorities, shri V.R. Amin, had intimated to the Government Valuer that it would be difficult to treat the agreement of sale as ante-dated. According to us there is no reason at all to suspect ante-dating of the said agreement. When the members of the society had paid as such as Rs. 2,10,000 on 31st March, 1971 and the transferor had also given possession of seven of the units, it would be very natural to enter into an agreement of sale at that stage to establish the rights and liabilities of the transferor and the transferees. Not only this but the said agreement is duly certified and was sent as early as on 4th May, 1971 to the Assistant Registrar of Co-op. Societies, There is then the evidence to show that on 1st April, 1972 the Municipality had charged the Co-op. Society Municipal tax for the period from 1st Dec., 1971 to 31st March, 1972 and further that the Factory Inspector had visited the premises on 14th December 1971 and had seen some of the looks working. This clearly indicates that possessions was also given of at least certain sheds by Nov., 1971 as claimed by the transferee. There is then mention to the agreement of sale in cl. (x) of the conveyance ex....
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....after amalgamation of the plots and it is quite possible that Raneegunge Coal Association Ltd. Had agreed to reconvey the plot to M/s. Minerva Dealers Pvt. Ltd. We, therefore, find title substance in the Revenue second submission also. 30. Coming to the price of land the Revenue laid stress on the on-money received by Minerva Dealers Pvt. Ltd. From M/s. Bachaooli Tin Factory. Apart from the fact that the Affidavit of the partners of M/s. Bachaooli Tin Factory was not put to test even by the ITOit is to be noted that when this fact was brought to the notice of the transferor, the transferor's counsel completely denied that any on-money had been received in connection with the impugned property from Bishen Udyog Co-op. Society Ltd. No doubt the latter did not ask for cross-examination, but that by itself would not prove that any on-money had passed in this particular transaction. Not only this but in the case of the adjoining sheds constructed by M/s. Minerva Dealers Pvt. Ltd. And sold to 33 parties, the same Competent Authority accepted that the price of Rs.20 paid for most of the industrial shed areas in the bigger shed, during 1973-74, was acceptable and dropped acquisition pro....
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.... sheds standing on plot Nos. 53, 54, 59 and 66 is in the middle with a small portion shutting to the North and connecting the surrounding road. The nullah to which a reference was made by the learned Departmental Representative and which was claimed to be an advantage from the impugned property because it can serve as an outlet for waste water, is really not adjoining the impugned property but lies beyond plot No. 115 which is not the subject matter in this case and which in fact is actually adjacent to plot Nos. 53,54,59 and 66. We may indicate at this stage that the so-called Petrol Pump, to which a reference was made by the learned Departmental Representative is nowhere near the impugned property but is stationed on the Bombay Agra Road at a distance of 75Km. And is opposite the plot of Rallis Wolf Ltd., which is adjacent to the plot of Burroughs Welcome & Co. Ltd. that would not, therefore, indicate that there was electric and water connection available to plot Nos. 115 and 116 when they were agreed to be purchased. There is in fact evidence to show that the assessee has spent sums to obtain electric and water connection from Bombay Agra Road and, therefore, the Revenue's claim....
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....hat the immovable property would ordinarily fetch on sale in the open market on the date of execution of the instrument of transfer. The open market, as is well settled in law, connotes a hypothetical free market where the seller could be interested in obtaining as high a price as possible whereas the purchaser would be anxious to get the property at a price which is in line with the market conditions. Even assuming that the fail market value should be determined as on the date of execution of the instrument of transfer i.e., as on 30th June, 1972, we have to look at the problem from the point of view of an intending purchaser. We will have to consider the question as to what factors the intending purchaser would take into account on that date if he wants to go in for the property. In this connection we may state at the outset that we are not much impressed by the claim of the transferee that its property was in a low lying area even the Valuer had been that in monsoon there were pools of water in the surrounding area. By 30th June, 1972 or even as early as on 30th March, 1971 the land on which the property was to be constructed must have been properly filled up and levelled and if....
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....d. Even for that he would have had to take recourse of the law Courts, There is also no doubt, as can be seen from the map, that the transferee's property was situated in one corner of the industrial estate and it is established that the so-called 56 feet road bounding the Southern side has not been extended till to-day so that the access road to the property comes to a dead end near the transferee's property. The proposed 56 feet road is yet to be constructed by the Municipality. It is also clear that an Intending purchaser would have taken into account that there was little scope for developing the property because there is no buildable open space left and being a factory shed it is difficult to construct another floor upon the ground floor even assuming that any extra FSI was available though of course there is nothing to indicate that extra F.S.I. was available. Considering the question from all these angles, we do not think that an intending purchaser would have paid for the property as on 30th June, 1972 anything more than Rs.18 per sq. foot of the carpet area. We may also indicate at this point that upto 1971-72 the rates which were quoted in the market were on the basis of ....
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....as paid and only Rs.40,433.50 was left to be paid on the date of execution of the conveyance. It well known, and this has come up before us in other valuation appeals also, that there was a dip in the market rates of real property during 1969-70, and the prices started going up gradually from 1971 onwards. This can be ascertained from any of the several magazines published by real estate brokers. For considering the question, if any, was with a view to effecting tax evasion by the transferor or understanding the income or assets by the transferee, the position as existing at the end of 1970 cannot be lost sight of. From that angle the market price as existing at the end of 1970 cannot be lost sight of. From that angle the market price as existing at the end of 1970 cannot be ignored. Though the agreement of sale is dated 30th March, 1971 the very fact that the first instalment of earnest money was paid in Nov., 1970 would surely go to indicate, if the position is concerned from a commercial angle, that some negotiations regarding the purchase of the property including the consideration payable must have taken place in Nov., 1970 itself. Without an oral agreement regarding considera....
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....15 per sq. yard, that would increase the valuation by only Rs. 31,000. 35. We may then consider the question of construction cost as at the end of 1970. Here we have there is very little material to accept the Revenue's valuation at Rs. 19 per sq. foot, though that value again is as on 30th June, 1972. this figure as stated by the Revenue is based on merely the so-called experience of the Government Valuer, as against which the transferee had tried to give full rate-analysis not only once but twice to satisfy the requirements of the Revenue. Here again we have to bear in mind that sheds were sold for Rs. 20 sq. foot in 1973-74 in the adjoining plot even when the prices had risen by the time, and that rate of Rs. 20 also included the value of the land below the structure. Keeping all these factors in mind, we are inclined to accept the cost of construction at Rs. 12.36 as estimated by the transferee rather than the cost of Rs. 19 as estimated by the Revenue. 36. In considering whether condition No. 4 is satisfied, we cannot also overlook the various developments in this case. Not only was the property booked in 1970 when possibly the construction must have been started, as oth....