MOHAN ALAGAPPAN, CHENNAI V. ITO NON CORPORATE WARD 10 (4), CHENNAI

ITA 1602/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9959 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Gift; Depreciation; Principle of natural justice; Fair market value; Valuation report
• Section: 142(1)

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL B SMC BENCH : CHENNAI , !' !. % % , & ' BEFORE SHRI JOGINDER SINGH, VICE PRESIDENT & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I .T.A.NO.1602/CHNY/2018 / ASSESSMENT YEAR : 2009-10 MR.MOHAN ALAGAPPAN, FLAT NO.C-6,BLUE MONT, 136/139,POONAMALLEE HIGH ROAD, CHENNAI 600 010. VS. INCOME TAX OFFICER, BUSINESS WARD XIII(4), (NEW JURISDICTION: I.T.O, NON- CORPORATE WARD -10(4), CHENNAI 600 034. [PAN AGYPM 6462 E ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR,ADVOCATE /RESPONDENT BY : MR.B.SAGADEVAN,JCIT,D.R / DATE OF HEARING : 05 - 12 - 201 8 / DATE OF PRONOUNCEMENT : 05 - 12 - 201 8 , / O R D E R PER JOGINDER SINGH, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-12,CHE NNAI DATED 15.03.2018 FOR THE ASSESSMENT YEAR 2009-10, ON THE GROUND THAT THE RATE OF PROPERTIES, MAINTAINED BY T HE REGISTRATION ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 2 -: AUTHORITIES, FOR THE PURPOSES OF CHECKING EVASION O F STAMP DUTY UPON TRANSFER DEEDS ARE NOT PURSUANT TO THE PROVISI ONS IN ANY STATUTES RELATING EVEN TO STAMP DUTY AND AT ANY RA TE IT CANNOT BE THE BASIS FOR DETERMINATION OF MARKET VALUE FOR ACQ UISITION. 2. DURING HEARING THE LD.COUNSEL FOR THE ASSESSEE S.SRIDHAR ADVANCED ARGUMENTS WHICH IS IDENTICAL TO THE GROUND S RAISED BY FURTHER SUBMITTING THAT THE GUIDELINE VALUE CANNOT BE BASIS OF THE DETERMINATION OF MARKET VALUE FOR WHICH THE LD.COUN SEL FOR THE ASSESSEE RELIED UPON THE DECISION FROM HONBLE BOMB AY HIGH COURT IN THE CASE OF LAKSHMI NARAYAN GROVER VS. APP ROPRIATE AUTHORITY 223 ITR 572, AND HONBLE JURISDICTIIONAL HIGH COURT IN THE CASE OF HINDUSTAN MOTORS LTD IN 240 ITE 424, CI T VS. R.JAWAHR, 217 ITR 59, CIT VS. R.DAMODARAN 247 ITR 6 97 AND HONBLE RAJSASTHAN HIGH COURT IN KRISHNAKUMAR RAWAT VS. UOI IN 214 ITR 610(RAJASTHAN) AND THE CASE OF JAWAJEE NAGA NATHAN VS. R.D.O AIR 1994 SC 2852. THE CRUX OF THE ARGUMENT IS THAT LD. FIRST APPELLATE AUTHORITY ERRED IN CONFIRMING THE V ALUATION, AS ON 01.04.1981, BASED ON GUIDE LINES VALUE. ON THE OTHE R HAND, THE LD.DR SHRI B.SAGADEVAN STRONGLY DEFENDED THE IMPUGN ED ORDER BY CONTENDING THAT THE MATTER MAY BE SENT BACK TO THE FILE OF THE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 3 -: LD.CIT(A) TO CONSIDER THE ARGUMENTS OF THE ASSESSE E AND THE VALUATION AS ON 1.4.1981. 3. BEFORE ADVERTING FURTHER, WE DEEM IT APPROPRIAT E TO CONSIDER DECISIONS, RELIED UPON, BEFORE US. ONE S UCH DECISIONS IS FROM HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HINDUSTAN MOTORS LTD.(SURPA) WHEREIN THE HONBLE HIGH COURT O BSERVED/HELD AS UNDER:- 14. BOTH THE PROPERTIES IN QUESTION, NAMELY, AT NO . 10, FIRST AVENUE, HAR-RINGTON ROAD, CHETPUT AND AT NO. 1, SEC OND MAIN ROAD, GANDHI NAGAR, ADYAR, WERE VALUED BY A REGISTE RED VALUER, NAMELY, PRASHANTH ENGINEERS AND THE PETITIONER FILE D A STATEMENT IN FORM NO. 37-1 ON THE BASIS OF THE SAID VALUATION . THE APPROPRIATE AUTHORITY REJECTED BOTH THE VALUATION R EPORTS AS WELL AS APPARENT CONSIDERATION SHOWN IN THE STATEMENT BASED ON THE AFORESAID VALUATION REPORTS. THE CONCLUSION OF THE APPROPRIATE AUTHORITY IS THAT THE REPORT OF THE REGISTERED VALU ER IS NOT BASED ON ANY EVIDENCE OF THE MARKET VALUE OF THE LAND. ON TH E OTHER HAND, THE APPROPRIATE AUTHORITY RELIED ON TWO SALE INSTAN CES OF THE PROPERTY IN WHICH 'NO OBJECTION CERTIFICATES' WERE ISSUED AND ACCORDING TO THE SAID AUTHORITY WHICH ARE AUTHENTIC DOCUMENTS. 15. MR. RAMACHANDRAN, LEARNED SENIOR COUNSEL FOR TH E PETITIONER, BY DRAWING MY ATTENTION TO SECTION 269UA(B) OF THE ACT, WOULD CONTEND THAT IN RESPECT OF AN EXCHANGE, THE APPAREN T CONSIDERATION OF THE PROPERTY WHICH IS SOUGHT TO BE TRANSFERRED, WOULD REPRESENT THE MARKET VALUE OF THE PROPERTY TH AT IS TAKEN IN EXCHANGE PLUS THE MONEY, IF ANY, PAID IN ADDITION T O THE PROPERTY. THUS, ACCORDING TO HIM, APPLYING THE SAID DEFINITIO N, THE APPARENT CONSIDERATION FOR THE PROPERTY AT HARRINGTON ROAD B ELONGING TO THE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 4 -: PETITIONER WOULD REPRESENT THE MARKET VALUE OF THE PROPERTY AT ADYAR. IT IS ALSO STATED THAT IN TERMS OF SECTION 269UD(1) , IF THE GOVERNMENT DESIRES TO PURCHASE THE PROPERTY WHICH I S THE SUBJECT- MATTER OF AN EXCHANGE, IT SHOULD PAY TO THE OWNER T HE MARKET VALUE OF THE PROPERTY WHICH IS TAKEN IN EXCHANGE. A CCORDINGLY, IT IS FURTHER STATED THAT THE APPROPRIATE AUTHORITY OUGHT TO HAVE VALUED THE ADYAR PROPERTY TO DETERMINE THE ACTUAL CONSIDER ATION THAT SHOULD BE PAID BY THE GOVERNMENT TO THE PETITIONER. IT IS ARGUED THAT IN THE ABSENCE OF VALUATION OF THE ADYAR PROPE RTY BY THE APPROPRIATE AUTHORITY, IT IS IMPOSSIBLE FOR THE APP ROPRIATE AUTHORITY TO ACTUALLY DETERMINE THE CONSIDERATION PAYABLE TO THE PETITIONER FOR THE PURCHASE OF THE PETITIONER'S PROPERTY AT HA RRINGTON ROAD. HE VERY MUCH RELIED ON A DECISION IN THE CASE OF HARI KRISHNA KANOI V. APPROPRIATE AUTHORITY . THE FOLLOWING PASSAGE IS VERY MUCH PRESSED INTO SERVICE (PAGE 767) : 'ONE OF THE GROUNDS FOR THE PETITIONERS CONTENDING THAT THE APPROPRIATE AUTHORITY HAS NOT DETERMINED THE APPARE NT CONSIDERATION IN TERMS OF THE 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 SUB MITTED THAT RS. 10 LAKHS ONLY REPRESENTED THE COST OF CONSTRUCTION. TH E OBJECTION MUST BE SUSTAINED. THE APPROPRIATE AUTHORITY HAS TR EATED THE PROPOSED CONSTRUCTION AS A 'THING' WITHIN THE MEANI NG OF SECTION 269UA(B)(2)(II) AND (III). IT SHOULD HAVE ADDRESSED ITS MIND TO TH E MARKET VALUE OF SUCH CONSTRUCTION ON THE DATE OF TH E AGREEMENT. IT HAS NOT.' 16. A PERUSAL OF THE RELEVANT PROVISIONS WOULD CLEA RLY SHOW THAT WHERE AN ORDER FOR THE PURCHASE OF ANY IMMOVABLE PR OPERTY IS MADE UNDER SECTION 269UD(1) OF THE ACT, THE CENTRAL GOVERNMENT SHALL PAY, BY WAY OF CONSIDERATION FOR SUCH PURCHAS E, AN AMOUNT EQUAL TO THE AMOUNT OF THE APPARENT CONSIDERATION. IN SUCH A CIRCUMSTANCE, THE QUESTION OF FULFILLING THE PROMIS ES AS PER THE AGREEMENT DOES NOT ARISE. IN TERMS OF SECTION 269UM , THE TRANSFEREE CANNOT MAKE ANY CLAIM AGAINST THE TRANSF EROR BY REASON ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 5 -: OF SUCH TRANSFER BEING NOT IN ACCORDANCE WITH THE A GREEMENT FOR THE TRANSFER OF THE IMMOVABLE PROPERTY ENTERED INTO . ACCORDINGLY, THE CONTENTION OF THE LEARNED SENIOR COUNSEL FOR TH E PETITIONER IS LIABLE TO BE REJECTED. 17. NOW I SHALL CONSIDER THE SALE INSTANCES CITED I N THE SHOW-CAUSE NOTICE AS WELL AS IN THE ULTIMATE ORDER PASSED BY T HE APPROPRIATE AUTHORITY. ACCORDING TO THE FIRST RESPONDENT, BOTH THE PROPERTIES ARE LOCATED IN SECOND AVENUE, HARRINGTON ROAD, CHET PUT, WHICH IS ADJACENT TO THE FIRST AVENUE AND SIMIARLY LOCATED A ND COMPARABLE. IT IS SEEN THAT THE APPROPRIATE AUTHORITY HAS BASED THE VALUATION ON DOCUMENTED SALE INSTANCES WHERE LAND VALUE HAS B EEN FIXED AS RS. 2,100 SQUARE FEET BY THE REGISTERED VALUER. IT IS THE DEFINITE CASE OF THE PETITIONER THAT THE LAND VALUE IN FIRST AVENUE, HARRINGTON ROAD, ARE LOWER BY 32 PER CENT, AS COMPA RED TO SECOND AVENUE, HARRINGTON ROAD, BASED ON A COMPARIS ON OF THE GUIDELINE VALUE. IN THIS REGARD, THE APPROPRIATE AU THORITY HAS CONCLUDED THAT GUIDELINE VALUES ARE FIXED BY THE RE GISTERING AUTHORITIES FOR THE PURPOSES OF COLLECTION OF STAMP DUTY AND THAT GUIDELINE VALUES OF LAND FOR THE PURPOSES OF REGIST RATION OF AN IMMOVABLE PROPERTY CAN HAVE NO APPLICATION FOR DETE RMINING THE MARKET VALUE UNDER CHAPTER XX-C OF THE ACT. THE APP ROPRIATE AUTHORITY HAS RELIED ON A DECISION OF THE RAJASTHAN HIGH COURT IN KRISHNA KUNTAR RINI'DL V. UNION OF INDIA [1995] 214 1TR 610, WHEREIN IT WAS HELD THAT THE MARKET RATES FOR THE P URPOSE OF REGISTRATION OF AN IMMOVABLE PROPERLY AS NOTIFIED B Y THE SUB- REGISTRAR CAN HAVE NO APPLICATION FOR DETERMINING T HE MARKET VALUE UNDER CHAPTER XX-C OF THE ACT. IT IS FURTHER STATED THAT IT IS LIMITED ONLY FOR PAYMENT OF STAMP DUTY. I AM IN AGREEMENT W ITH THE VIEW EXPRESSED BY THE RAJASTHAN HIGH COURT. FURTHER, THE PRINCIPLES FOR VALUATION IN RESPECT OF AN IMMOVABLE PROPERTY UNDER THE WEALTH- TAX ACT OR OTHER TAX ATION LAWS ARC DIFFERENT FROM THE PRI NCIPLES WHICH ARE APPLICABLE TO ACQUISITION PROCEEDINGS. TH E PROCEEDINGS UNDER CHAPTER XX-C ARE AKIN TO THE ACQUISITION PROC EEDINGS AND NOT TO THE VALUATION PRINCIPLES WHICH ARE APPLICABL E FOR ASSESSING THE TAX ON THE BASIS OF THE VALUATION OF THE PROPER TY. A CERTAIN ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 6 -: ELEMENT OF GUESS HAS TO BE THERE BASED ON OBJECTIVE FACTORS HAVING REASONABLE NEXUS WITH THE EVIDENCE ON RECORD . THE VARIOUS FACTORS ARC THERE ON THE BASIS OF WHICH OUT OF THE VARIOUS METHOD BY WHICH THE VALUATION OF THE IMMOVABLE PROPERTY CA N 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 OBJECTIVE FACTORS. THE VALUA TION, THEREFORE, HAS TO BE DONE BY A METHOD WHICH IS MORE OBJECTIVE AND COULD FURNISH RELIABLE DATA TO ARRIVE AT A JUST CONCLUSIO N. AS ALREADY STATED, THE MARKET RATES NOTIFIED BY THE SUB-REGIST RAR FOR THE PURPOSE OF REGISTRATION CANNOT BE A PROPER GUIDE FO R 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 ME NTIONED 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 PROPE RLY RATE PER GROUND FOR LAND MODIFIED RATE AS ON THE DATE OF AGR EEMENT ALLOWING 1 PER CENT. P.M. 28.2.96 NO. 6, II AVENUE, HARRINGTON ROAD, 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 CONSTRUCTION-1962 FRONTAGE-15.25 MTRS. ROAD WIDTH-12.19 MTRS. RESIDENTIAL AREA. TRANSFEREE : SRI M. AVAIS MURVEE AND TWO OTHERS. D. NO. 2, KOTHARI ROAD, NUNGAMBAKKAM, CHENNAI. APPARENT CONSIDERATION : RS. 1,55,00,000 (II) RS. 66,28,000 CONSIDERING SCRAP VALUE FOR BUILDING ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 7 -: (II) RS. 74,89,640 24.10.96 NO. 8, II AVENUE, HARRINGTON ROAD, CHENNAI. LAND 62.20 PER CENT. UDS OUT OF 8,800 SQ. FT. BLDG. ABOUT 4,435 SQ. FT. (I) RS. 67,31,000CONSIDERING DEPRECIATED COST FOR BUILDING (I) RS. 70,67,550 YEAR OF CONSTRUCTION- 1963 FRONTAGE-24.08 MTRS. ROAD WIDTH-12.19 MTRS. RESIDENTIAL AREA. (II) RS. 70,05,000 CONSIDERING SCRAP VALUE FOR BUILDING (II)RS. 73,53,250 TRANSFEREE : S. I. PROPERTY INV. LTD., CHENNAI. APPARENT CONSIDERATION BUILD UP AREA. 5.000 SQ. FT. AT RS. 1,000 PER SQ. FT. RS. 50,00,000 RS. 1,18,60,000 TOTAL RS. 1,68,00,000 DISCOUNTED CONSIDERATION RS.1,61,36,000. 19. THOUGH LEARNED SENIOR COUNSEL FOR THE PETITIONE R WOULD STATE THAT IN BOTH THE SALE INSTANCES THE PROPERTIES SITU ATE IN SECOND AVENUE WHEREAS THE PROPERTY IN QUESTION IS IN FIRST AVENUE HENCE THE SAME CANNOT BE COMPARED, I AM UNABLE TO ACCEPT THE SAID CONTENTION IN THE LIGHT OF THE DISCUSSIONS BY THE A PPROPRIATE AUTHORITY. IT IS CLEAR THAT BOTH THE SALE INSTANCES RELATE TO PROPERTIES PROXIMATE IN LOCATION TO THE SUBJECT PRO PERTY AND ARC IN ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 8 -: THE RESIDENTIAL ZONE OF DEVELOPMENT AS PER M.M.D.A. DEVELOPMENT CONTROL RULES. IN RESPECT OF THE PROPERTY AT SERIAL NO. 1, TAKING NOTE OF. EFFLUX OF TIME, THE APPROPRIATE AUTHORITY HAS ALLOWED APPRECIATION AT 1 PER CENT. P.M. AND WORKED OUT THE FAIR MARKET VALUE OF THE SUBJECT PROPERTY. THE FAIR MARKET VALU E IN THIS CASE WORKS OUT TO RS. 2,61,66,000 AS AGAINST THE APPAREN T CONSIDERATION OF RS. 1,87,00,000. ACCORDINGLY, THE APPROPRIATE AUTHORITY HAS CONCLUDED THAT THERE IS SIGNIFICANT U NDERVALUATION OF THE SUBJECT PROPERTY BY 39.92 PER CENT. LIKEWISE, I F THE SALE INSTANCE AT SL. NO. 2 IS CONSIDERED, ACCORDING TO T HE APPROPRIATE AUTHORITY, THE UNDERSTATEMENT WILL BE 36.74 PER CEN T. THE DETAILS FURNISHED SHOW A REASONABLE PRESUMPTION OF ATTEMPT TO EVADE TAX. THOUGH IT IS STATED THAT THE OTHER 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 F OLLOWING DETAILS HAVE BEEN FURNISHED WITH REGARD TO THE ADYAR PROPER TY : SL. NO. DATE OF AGREEMENT DESCRIPTION OF THE PROPER TY LAND RATE PER GROUND 1. 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 13,46 4 SQ. FT. APPARENT CONSIDERATION : RS. 99,00,000 DISCOUNTED C ONSIDERATION : RS. 94,49,011 TRANSFEREE : MRS. GEETHA KUMAR, NO. 5 5, RUKMANI ROAD, 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 CONSIDE RATION RS.1,95,00,000 DISCOUNTED CONSIDERATION RS. 1,87,88 ,190 TRANSFEREE : DEV APARTMENTS, ADYAR, CHENNAI. ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 9 -: 20. IT IS CLEAR THAT THE LAND RATE REFLECTED IN THE CASE OF THE PROPERTY AT DOOR NO. 1, SECOND MAIN ROAD, GANDHI NA GAR, ADYAR, CHENNAI, IS RS. 43,64,000 WHICH INDICATES AN APPREC IATION OF MORE THAN 1 PER CENT, PER MONTH. HERE AGAIN, THE APPROPR IATE AUTHORITY HAVE ALLOWED 1 PER CENT, PER MONTH ON THE CONSECUTI VE SIDE FOR UPDATING THE LAND VALUE. 21. IT IS ALSO CLEAR THAT WITH REGARD TO THE FIRST SALE INSTANCE, 'NO OBJECTION CERTIFICATE' HAS BEEN ISSUED FOR RS. 1,50 ,00,000 WHICH IS ALSO REFLECTED IN PAGE 1 OF THE SALE DEED DOCUMENT NO. 890 OF 1996, THE PURCHASER HAVING PAID AND THE SELLER HAVI NG ACCEPTED THE RECEIPT OF THE AMOUNT. AS RIGHTLY OBSERVED BY T HE APPROPRIATE AUTHORITY, THIS REPRESENTS THE TRUE MARKET VALUE OF THE PROPERTY. AS STATED EARLIER, FOR THE PURPOSE OF COLLECTING STAMP DUTY, THE VALUE IS APPORTIONED BETWEEN LAND AND BUILDING, WHATEVER VALUE FOR LAND INDICATED BY THE VENDOR AND THE EXECUTANT IN THE DO CUMENT IS TAKEN AS BASE AND STAMP DUTY WORKED OUT. HENCE, THE VALUE FURNISHED BY THE PETITIONER BASED ON THE MATERIALS SUPPLIED BY THE SUB-REGISTRAR CANNOT BE ACCEPTED FOR VALUING THE PR OPERTY UNDER CHAPTER XX-C. THOUGH THE SECOND SALE INSTANCE RELAT ING TO THE PROPERTY AT DOOR NO. 8, II AVENUE, HARRINGTON ROAD, IS NOT REGISTERED, AFTER CONSIDERING ALL THE RELEVANT MATE RIALS, THE APPROPRIATE AUTHORITY HAS ISSUED 'NO OBJECTION CERT IFICATE' AND IT REFLECTS THE MARKET RATE OF THE LAND AS ON THE DATE OF THAT AGREEMENT ON OCTOBER 24, 1996. ON THE OTHER HAND, T HE VALUE FURNISHED BY PRASHANTH ENGINEERS MERELY ON THE BASI S OF MATERIALS SUPPLIED BY THE SUB-REGISTRAR HERE AGAIN CANNOT BE ACCEPTED. AS RIGHTLY OBSERVED BY THE APPROPRIATE AUTHORITY, THER E WAS APPRECIATION IN LAND RATE IN CHETPUT LOCALITY WHERE THE SUBJECT PROPERTY IS SITUATED. IN FACT, ADYAR AREA WHERE THE PROPERTY BEING EXCHANGED IS SITUATED, HAS ALSO SHOWN APPRECIATION IN LAND RATE. THOUGH RELIANCE WAS PLACED ABOUT THE STATEMENT IN T HE NEWSPAPERS REGARDING SLUMP IN THE PRICES OF LAND, A S RIGHTLY OBSERVED, THE RISE OR SLUMP IN THE PRICES OF LAND R EPORTED IN THE NEWSPAPERS CANNOT BE GENERALISED AS APPLICABLE TO A LL AREAS. THE APPROPRIATE AUTHORITY HAS ALSO CONSIDERED THE DOCUM ENTS IN ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 10 - : RESPECT OF FEW CASES OF PROPERTY TRANSACTIONS IN HA RRINGTON ROAD FILED BY THE PETITIONER, AND AFTER GIVING ADEQUATE REASONS, REJECTED THOSE DOCUMENTS. THE DESIRE OF THE FIFTH RESPONDENT TO RETAIN THE BUILDING AS HER RESIDENCE AND NOT FOR DEVELOPMENT, THE APPROPRIATE AUTHORITY HAS ALLOWED A REDUCTION OF 10 PER CENT, IN THE LAND RATE FOR RESTRICTED MARKET AS SUGGESTED BY THE VALUER WHILE EVALUATING THE FAIR MARKET VALUE. FURTHER, EV EN THOUGH THE COOVUM RIVER HAS ANY EFFECT ON THE PROPERTY IN QUES TION, 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 FAI R MARKET VALUE. REGARDING THE WIDTH OF THE ROAD, THE APPROPRIATE AU THORITY HAS OBTAINED NECESSARY DETAILS FROM THE MADRAS METROPOL ITAN DEVELOPMENT AUTHORITY AND CONSIDERED THE CLAIM OF T HE PETITIONER. IN THE LIGHT OF THE DETAILED DISCUSSIONS BY THE APP ROPRIATE AUTHORITY BASED ON ACCEPTABLE MATERIALS, THOUGH LEARNED SENIO R COUNSEL FOR THE PETITIONER HAS REFERRED TO VARIOUS DECISIONS RE GARDING FIXATION OF MARKET VALUE AND OTHER ASPECTS, I AM OF THE VIEW THAT IT IS UNNECESSARY TO REFER THE SAME. FURTHER IT IS SETTLE D LAW THAT WHEN THE FACTS ARE CLEAR, THERE IS NO NEED TO REFER DECI SIONS 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 TH E MATTER LIKE AN APPEAL. IT IS SETTLED LAW THAT JUDIC IAL REVIEW IS LIMITED ONLY TO THE EXTENT OF EXAMINING AS TO WHETHER ANY F INDING IS PERVERSE OR THERE IS NON-APPLICATION OF MIND OR THE ORDER IS CONTRARY TO THE ESTABLISHED PRINCIPLES OF LAW. THIS COURT IS NOT SITTING IN APPEAL OVER THE ORDERS PASSED BY THE APP ROPRIATE 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 CONSI DERATION. FURTHER, IT IS NOT THE CALCULATION OR THE MANNER WH ICH COULD BE EXAMINED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. THE CALCULATION IS ALWAYS A QUESTION OF FACT. THE PRINC IPLES OF VALUATION ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 11 - : ALONE HAVE TO BE CONSIDERED. I HAVE ALREADY OBSERVE D THAT THE APPROPRIATE AUTHORITY HAS CONSIDERED THE RELEVANT S ALE INSTANCES AND AFTER ALLOWING REDUCTION TO CERTAIN EXTENT ARRI VED AT A CORRECT CONCLUSION. IN THIS REGARD, IT IS USEFUL TO REFER A DECISION OF THE SUPREME COURT IN THE CASE OF APPROPRIATE AUTHORITY V. SUDHA PATIL . AFTER DISCUSSING THE PROVISIONS REFERRED TO IN C HAPTER XX-C OF THE ACT AS WELL AS POWER OF THIS COURT UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, THE SUPREME COURT HAS OBSERV ED THAT AT (PAGE 128) : '... WE ARE OF THE CONSIDERED OPINION THAT MERELY B ECAUSE NO APPEAL IS PROVIDED FOR AGAINST THE ORDER OF THE APP ROPRIATE AUTHORITY, DIRECTING COMPULSORY ACQUISITION BY THE GOVERNMENT, THE SUPERVISORY POWER OF THE HIGH COURT DOCS NOT GET EN LARGED NOR THE HIGH COURT CAN EXERCISE AN APPELLATE POWER.' 23. IN THE LIGHT OF THE LAW LAID DOWN BY THE APEX C OURT, AFTER EXAMINING THE ORDER OF THE APPROPRIATE AUTHORITY, I N DETAIL, I DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE SAID ORDER. FURTHER, THE APPROPRIATE AUTHORITY CONSIDERED ALL THE ASPECT S AND AFFORDED ADEQUATE OPPORTUNITY TO THE PARTIES CONCERNED. ACCO RDINGLY, BOTH THE WRIT PETITIONS FAIT AND THE SAME ARE DISMISSED. NO COSTS. CONSEQUENTLY, BOTH THE WRIT MISCELLANEOUS PETITIONS ARE CLOSED. 3.1 IT IS NOTED THAT HONBLE BOMBAYHIGH COURT IN TH E CASE OF LAKSHMI NARYAN GROVER (SUPRA) HELD /OBSERVED AS UND ER:- ACCORDINGLY, THE PETITIONER SUBMITTED HER REPLY ON 13TH FEB., 1993, CONTENDING THAT THERE WAS NO UNDERVALUATION I N THE SALE TRANSACTION IN QUESTION AND THAT THE SUIT PROPERTY WAS BEING PURCHASED AT ITS MARKET VALUE. IT WAS ALSO POINTED OUT THAT THE CONSIDERATION FOR THE SUIT PROPERTY AGREED TO BETWE EN THE PARTIES WAS FAIR AND REASONABLE AND THAT IN FACT THE RATE O F VALUATION FIXED AS PER THE LAND RATES MAINTAINED BY THE NAGPUR CORP ORATION AND ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 12 - : BY THE STAMP AUTHORITIES FOR LEVY OF STAMP DUTY AND THE REGISTRATION CHARGES UPON DOCUMENTS RELATING TO TRA NSFER OF TITLE WAS MUCH LOWER THAN THE MARKET RATE CALCULATED FOR THE SUIT PROPERTY ON THE BASIS OF THE CONSIDERATION AGREED T O BETWEEN THE PARTIES. IT WAS POINTED OUT THAT FOR THE AREA IN QU ESTION THE SAID LAND RATE FIXED WAS RS. 1,500 PER SQ. MT., I. E., R S. 145 PER SQ. FT., WHEREAS THE LAND RATE FOR THE SUIT TRANSACTION WORK ED OUT TO RS. 225 PER SQ. FT. FURTHER, IT WAS POINTED OUT BY THE PETITIONER IN HE R 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 LOWE R THAN ITS REAL MARKET VALUE. THE PLEA WAS ALSO RAISED THAT SINCE T HERE WERE TWO CO-OWNERS, I. E., THE BENEFICIARIES, THE SHARE OF E ACH WOULD BE LESS THAN RS. 10,00,000 AND AS SUCH THE PROVISIONS OF CO MPULSORY PURCHASE IN CHAPTER XX-C OF THE ACT WOULD NOT BE AT TRACTED TO THE INSTANT SALE TRANSACTION. ALONG WITH THE REPLY TO T HE SHOW-CAUSE NOTICE THE PETITIONER HAD ALSO SUBMITTED DOCUMENTAR Y EVIDENCE IN THE SHAPE OF A VALUATION REPORT AND CERTAIN SALE DE EDS TO SHOW THAT THE SUIT TRANSACTION WAS FOR FAIR MARKET VALUE . IT WAS ALSO POINTED OUT IN HER REPLY TO THE SHOW-CAUSE NOTICE B Y THE PETITIONER THAT BEFORE ISSUING THE SHOW-CAUSE NOTICE, THE APPR OPRIATE AUTHORITY MUST COME TO THE TENTATIVE OR PRIMA FACIE VIEW THAT THE PROPERTY WAS UNDERVALUED AND THAT IT SHOULD INCORPO RATE IN ITS SHOW-CAUSE NOTICE THE MATERIAL OR THE REASONS ON TH E BASIS OF WHICH IT COMES TO SUCH A TENTATIVE OR PRIMA FACIE V IEW IN THE ABSENCE OF WHICH THE NOTICEE DOES NOT HAVE AN OPPOR TUNITY TO MEET ITS CASE. THE PETITIONER, THEREFORE, DEMANDED THE REASONS FROM THE APPROPRIATE AUTHORITY FOR ITS PRIMA FACIE VIEW THAT THE SUIT PROPERTY WAS UNDERVALUED. AFTER RECEIPT OF THE ABOVE REPLY OF THE PETITIONER TO THE SHOW-CAUSE NOTICE ISSUED BY THE APPROPRIATE AUTHORITY AND AFTE R HEARING THE LEARNED ADVOCATE FOR THE PETITIONER WHO APPEARED BE FORE IT, THE LEARNED APPROPRIATE AUTHORITY BY ITS ORDER DT. 23RD FEB., 1993, PASSED AN ORDER FOR COMPULSORY PURCHASE OF THE SUIT LAND FOR A NET ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 13 - : CONSIDERATION OF RS. 13,25,343 PAYABLE TO RESPONDEN T NO. 3 BY THE CENTRAL GOVERNMENT INCLUDING A SUM OF RS. 44,178 OR DERED TO BE DEPOSITED IN THE APPROPRIATE AUTHORITY'S ACCOUNT AS PER ITS FINDING IN PARA 7 OF ITS ORDER RELATING TO THE QUESTION OF VACANT POSSESSION REGARDING ENCROACHMENT OF ABOUT 200 SQ. FT. UPON TH E SUIT LAND BY THE OWNER OF THE ADJOINING PLOT. THE REASONS FOR CO MPULSORY ACQUISITION WERE RECORDED BY THE APPROPRIATE AUTHOR ITY SEPARATELY ON THE SAME DATE, I. E., 23RD FEB., 1993. A PERUSAL OF THE REASONS RECORDED BY THE APPROPRIAT E AUTHORITY WOULD SHOW THAT THE SUIT LAND WAS SITUATED IN THE C IVIL LINES AREA WHICH WAS PURELY A RESIDENTIAL LOCALITY OF THE PEOP LE BELONGING TO THE UPPER MIDDLE CLASS. THE PERMISSIBLE FSI FOR THE SUIT LAND WAS ONE AND ITS PERMISSIBLE USER WAS FOR RESIDENTIAL PU RPOSE. AFTER CONSIDERING THE QUESTION OF ITS LOCATION, THE APPRO PRIATE AUTHORITY DETERMINED THE DISCOUNTED VALUE OF THE APPARENT CON SIDERATION OF RS. 13,50,000 SHOWN IN THE AGREEMENT OF SALE DT. 24 TH MAY, 1992, IN ACCORDANCE WITH THE PROVISIONS OF S. 269UA(B) R/W R. 48-I OF THE IT RULES, 1962, WHICH PROVIDES FOR A RATE OF INTERE ST OF 8 PER CENT PER ANNUM FOR DETERMINING THE DISCOUNTED VALUE OF T HE APPARENT CONSIDERATION GIVEN IN THE AGREEMENT OF SALE. IT HA S CALCULATED THE DISCOUNTED VALUE OF THE CONSIDERATION FOR THE SALE TRANSACTION AT RS. 13,25,343 AS SHOWN IN PARA 4 OF THE REASONS. TH E 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 I T IN PARA 5 OF THE REASONS. IT APPEARS FROM THE PARTICULARS THAT THE A GREEMENT OF SALE IN THE SALE INSTANCE WAS DT. 26TH DEC., 1990, AND T HE AREA OF THE LAND AGREED TO BE SOLD WAS 4,839.5 SQ. FT. OUT OF P LOT NO. 2 IN SHRI VALLABH CO-OPERATIVE HOUSING SOCIETY, CIVIL LINES, NAGPUR. ITS APPARENT CONSIDERATION WAS RS. 15,00,000 AND THE DI SCOUNTED RATE PER SQ. FT. WORKED OUT WAS RS. 304.20 WITH PERMISSI BLE FSI OF 1. SINCE THE PROPERTY IN THE SALE INSTANCE WAS SOLD ON E YEAR TWO MONTHS EARLIER THAN THE SUIT PROPERTY, CONSIDERING THE 12 PER CENT INCREASE IN THE LAND RATE PER ANNUM, THE RATE OF TH E LAND IN THE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 14 - : SALE INSTANCE WAS WORKED OUT TO RS. 348 PER SQ. FT. AS THE DIFFERENCE WAS THUS MORE THAN 15 PER CENT IN THE LI GHT OF THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF C. B. GAUTAM (SUPRA), THE APPROPRIATE AUTHORITY WAS OF THE VIEW THAT THE SUIT LAND WAS SIGNIFICANTLY UNDERVALUED AND THERE WAS TH US A CASE FOR ITS PRE-EMPTIVE PURCHASE. AS REGARDS THE CASE OF THE PETITIONER BASED UPON TH E LAND THE LAND RATE MAINTAINED BY THE NAGPUR CORPORATION AND THE S TAMP AUTHORITIES, THE APPROPRIATE AUTHORITY REJECTED THE SAID CASE ON THE GROUND THAT ITS MAIN OBJECT WAS OTHER THAN DETERMIN ING THE MARKET RATE. AS REGARDS THE TWO SALE INSTANCES DT. 23RD NOV., 1989, AND 23RD NOV., 1991, POINTED OUT BY THE PETIT IONER AS COMPARABLE SALE INSTANCES, THE APPROPRIATE AUTHORIT Y OBSERVED THAT THE TIME GAP BETWEEN THE INSTANT SALE TRANSACT ION AND THE SALE TRANSACTION IN THE FIRST SALE INSTANCE DT. 23R D NOV., 1989, WAS CONSIDERABLE AND AS REGARDS THE SECOND SALE INSTANC E DT. 23RD NOV., 1991, IT OBSERVED THAT SINCE THE PROPERTY THE REIN WAS PURCHASED BY THE TENANT IN OCCUPATION, HE WOULD NAT URALLY PAY THE PRICE WHICH IS LESS THAN THE MARKET PRICE IN VIEW O F HIS TENANCY RIGHTS. THE APPROPRIATE AUTHORITY THUS REJECTED BOT H THE SALE INSTANCES RELIED UPON BEFORE IT BY THE PETITIONER. THE APPROPRIATE AUTHORITY THUS PASSED AN ORDER FOR COMPULSORY PURCH ASE OF THE SUIT LAND FOR A NET CONSIDERATION OF RS. 13,25,343 PAYAB LE BY THE CENTRAL GOVERNMENT TO RESPONDENT NO. 3 INCLUDING TH E SUM OF RS. 44,178 WHICH WAS DIRECTED TO BE DEPOSITED IN THE AC COUNT OF THE APPROPRIATE AUTHORITY IN VIEW OF THE DISPUTE ABOUT ENCROACHMENT UPON THE SAID LAND BY THE OWNER OF THE ADJOINING LA ND IN THE LIGHT OF THE FINDINGS OF THE APPROPRIATE AUTHORITY IN PAR A 7 OF ITS ORDER DT. 23RD FEB., 1993. FEELING AGGRIEVED BY THE ORDER DT. 23RD FEB., 1993, PASSED BY THE APPROPRIATE AUTHORITY, THE PETI TIONER HAS PREFERRED THE INSTANT WRIT PETITION IN THIS COURT. 5. ORIGINALLY THERE WERE ONLY TWO RESPONDENTS TO TH IS WRIT PETITION VIZ., THE APPROPRIATE AUTHORITY AND THE UNION OF IN DIA, WHO FILED THE RETURN OPPOSING THE WRIT PETITION. HOWEVER, BY THE ORDER DT. 11TH MARCH, 1993, THE TRANSFEROR OF THE SUIT LAND W AS ADDED AS A ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 15 - : PARTY RESPONDENT, I. E., RESPONDENT NO. 3 IN THE IN STANT WRIT PETITION. IN HER WRITTEN SUBMISSIONS RESPONDENT NO. 3 HAS STATED THAT SHE IS NOT CONCERNED WITH THE CHALLENGE OF THE PETITIONER TO THE ORDER OF COMPULSORY PURCHASE PASSED BY THE APPR OPRIATE AUTHORITY REGARDING HER SUIT PROPERTY AND THAT SHE ACCEPTS THE SAID ORDER OF COMPULSORY PURCHASE PASSED UNDER CHAPTER X X-C OF THE ACT. IN FACT AS POINTED OUT BY THE APPROPRIATE AUTH ORITY 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 SUB MISSIONS THAT THE PETITIONER'S CHALLENGE TO THE ORDER PASSED BY T HE 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 SUBMISSI ONS 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 P ER ANNUM AND IN CASE THE SAID IMPUGNED ORDER OF THE APPROPRIATE AUT HORITY IS SET ASIDE, THE PETITIONER SHOULD BE DIRECTED TO PAY HER THE INTEREST AT THE RATE OF 24 PER CENT, PER ANNUM PARTICULARLY WHE N, ACCORDING TO HER, THERE IS AN INTERIM STAY OF THE IMPUGNED ORDER OF THE APPROPRIATE AUTHORITY GRANTED BY US PENDING DECISIO N IN THE INSTANT WRIT PETITION AS A RESULT OF WHICH SHE CANN OT GET THE BALANCE OF THE CONSIDERATION EITHER FROM THE RESPON DENTS OR THE PETITIONERS. 6. LEARNED COUNSEL FOR THE PETITIONER HAS RAISED TH E FOLLOWING CONTENTIONS BEFORE US : (I) THAT SINCE THERE ARE TWO CO-OWNERS OF THE SUIT LAND, VIZ., THE TWO BENEFICIARIES THE SHARE OF EACH IS BELOW RS. 10 ,00,000, AND, THEREFORE, THE PROVISIONS OF COMPULSORY PURCHASE IN CHAPTER XX-C OF THE ACT ARE NOT ATTRACTED. ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 16 - : (II) THAT NO OPPORTUNITY WAS GIVEN TO THE PETITIONE R TO MEET THE CASE OF THE APPROPRIATE AUTHORITY FOR PRE-EMPTIVE P URCHASE OF THE SUIT PROPERTY SINCE THE MATERIAL OR THE INFORMATION RELATING TO THE SOLE SALE INSTANCE RELIED UPON BY IT FOR ITS VIEW T HAT THE SUIT PROPERTY WAS GROSSLY UNDERVALUED WAS NOT DISCLOSED TO HER IN THE SHOW-CAUSE NOTICE GIVEN TO HER. THE IMPUGNED ORDER OF THE APPROPRIATE AUTHORITY IS THUS VITIATED FOR NON-COMP LIANCE WITH THE BASIC PRINCIPLES OF NATURAL JUSTICE. (III) THAT THE SALE INSTANCE RELIED UPON BY THE APP ROPRIATE AUTHORITY WAS NOT A COMPARABLE SALE INSTANCE ON THE BASIS OF WHICH IT COULD BE HELD THAT THERE WAS UNDERVALUATIO N OF THE SUIT PROPERTY AND THAT THE CONSIDERATION OF RS. 13,50,00 0 AGREED TO BETWEEN THE PARTIES IN THE INSTANT CASE DID NOT REP RESENT THE TRUE AND FAIR MARKET VALUE OF THE SUIT LAND. (IV) THE APPROPRIATE AUTHORITY DID NOT PROPERLY CON SIDER THE MATERIAL PLACED BY THE PETITIONER BEFORE IT TO SHOW THAT THE CONSIDERATION AGREED TO BETWEEN THE PARTIES REPRESE NTED THE TRUE AND FAIR MARKET VALUE OF THE SUIT LAND, VIZ., THE T WO SALE INSTANCES FROM THE CIVIL LINES AREA ITSELF AND THE RATES OF V ALUATION FIXED AND MAINTAINED BY THE NAGPUR CORPORATION AND THE REGIST ERING OFFICERS OF THE GOVERNMENT. 7. WE SHALL FIRST CONSIDER THE CONTENTION RAISED ON BEHALF OF THE PETITIONER ON THE MERITS, VIZ., WHETHER THE SALE IN STANCE RELIED UPON BY THE APPROPRIATE AUTHORITY WOULD SHOW THAT T HE SUIT LAND IS GROSSLY UNDERVALUED AND WHETHER IT IS A COMPARABLE SALE INSTANCE OR NOT. AS REGARDS THIS QUESTION, THE PETITIONER HA S URGED IN PARA 9-A OF THE WRIT PETITION INTRODUCED BY THE AMENDMEN T THAT THE LAND ADMEASURING 4,839.5 SQ. FT. OUT OF THE PLOT NO . 2 IN SHRI VALLABH CO-OPERATIVE HOUSING SOCIETY, CIVIL LINES, NAGPUR, WAS PURCHASED BY SHRI SATISH KALE, WHO WAS ALREADY HOLD ING THE ADJOINING PLOT NO. 3 ADMEASURING 936.97 SQ. MT. BY REASON OF THE PURCHASE OF THE ABOVE AREA FROM PLOT NO. 2, THE TOT AL AREA 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 REC ORD THE LETTER OF ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 17 - : THE ASSISTANT ENGINEER, BUILDING DEPARTMENT, NAGPUR MUNICIPAL CORPORATION, NAGPUR, DT. 17TH MARCH, 1993, ADDRESSE D 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 EXCEE DS 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 B ASIS OF THE ABOVE FACTS IS THAT SINCE SHRI SATISH KALE WAS THE OWNER OF THE ADJOINING PLOT AND SINCE HE WAS BENEFITED BY THE IN CREASE IN FSI HE PAID HIGHER VALUE FOR PURCHASE OF THE AREA ADMEA SURING 4,839.5 SQ. FT. OF PLOT NO. 2. THE SAID PURCHASE BY HIM, THEREFORE, ACCORDING TO THE PETITIONER DOES NOT REFLECT THE TR UE AND FAIR MARKET VALUE OF THE SAID LAND. THE ABOVE SUBMISSION MADE ON BEHALF OF THE PETITIONERS IS WELL FOUNDED. IN ASSES SING THE VALUE OF THE LAND, ITS SPECIAL VALUE TO AN OWNER OF AN ADJOI NING PROPERTY TO WHOM IT MAY HAVE SOME VERY SPECIAL ADVANTAGE IS A F ACTOR WHICH HAS TO BE TAKEN INTO CONSIDERATION, BECAUSE SUCH A BUYER IS LIKELY TO PAY A HIGHER PRICE FOR THE SAID LAND THAN A PRUD ENT BUYER WOULD OTHERWISE PAY. THE ABOVE FACTOR IS, THEREFORE, RECO GNISED AS A PLUS FACTOR IN FAVOUR OF THE ACQUIRED LAND UNDER THE LAND ACQUISITION ACT IN DETERMINING ITS MARKET VALUE. (SEE PARA 13 OF T HE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CHIMANLAL HARGOVINDDAS VS. SPECIAL LAND ACQUISITION OFFICER ). IN THE INSTANT CASE AS RIGHTLY URGED ON BEHALF OF THE PETITIONER THERE IS A SPECIA L ADVANTAGE TO THE OWNER OF THE LAND IN THE SALE INSTANCE BY PURCH ASE OF THE ADJOINING LAND IN PLOT NO. 2 BECAUSE IT INCREASES I TS FSI TO 1.25. THE TRANSACTION IN THE SALE INSTANCE IN WHICH THE B UYER HAS PAID A HIGHER VALUE FOR THE LAND PURCHASED BY HIM, BECAUSE OF THE ABOVE SPECIAL ADVANTAGE TO HIM CANNOT, THEREFORE, FURNISH A GOOD GUIDE FOR DETERMINING THE MARKET VALUE OF THE SUIT LAND. MOREOVER, THERE IS NO MATERIAL TO SHOW THAT IN A PE RIOD OF ONE YEAR AND TWO MONTHS, THE MARKET VALUE OF THE LAND IN THE CIVIL LINES AREA WOULD APPRECIATE AND THAT TOO TO THE EXTENT OF 12 PER CENT PER ANNUM. EVEN THE APPROPRIATE AUTHORITY HAS NOT F OLLOWED ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 18 - : UNIFORMITY IN GIVING SUCH APPRECIATION IN LAND RATE S IN THE CIVIL LINES AREA ITSELF AS IN OTHER CASES IN THIS GROUP O F WRIT PETITIONS, I. E., WRIT PETITION NO. 715 OF 1993, WRIT PETITION NO . 1260 OF 1993 AND 1264 OF 1993 WITH 2088 OF 1993, THE APPRECIATIO N GIVEN BY IT WITHOUT THERE BEING ANY MATERIAL ON RECORD IS 10 PE R CENT PER ANNUM. IN FACT, IN THE ORDER PASSED BY THE APPROPRI ATE AUTHORITY, WHICH IS THE SUBJECT-MATTER OF CHALLENGE IN WRIT PE TITION NO. 1264 OF 1993 AND THE CONNECTED WRIT PETITION NO. 2088 OF 1993 DECIDED TODAY, THE SAME SALE INSTANCE WHICH IS RELIED UPON BY IT IN THE INSTANT CASE IS TAKEN AS A COMPARABLE SALE INSTANCE FOR THE SUIT LAND IN THE SAID CASE WHICH IS ALSO SITUATED IN CIV IL LINES, NAGPUR. THE RATE OF APPRECIATION, HOWEVER, GIVEN TO THE SAM E SALE INSTANCE IS AT THE RATE OF 10 PER CENT PER ANNUM AND NOT 12 PER CENT. 8. IT MAY BE SEEN THAT R. 48-I OF THE IT RULES, 196 2, HAS PRESCRIBED THE RATE OF INTEREST OF EIGHT PER CENT P ER ANNUM FOR CALCULATING THE DISCOUNTED VALUE OF THE CONSIDERATI ON AGREED TO BETWEEN THE PARTIES UNDER THEIR AGREEMENT OF SALE. IN OTHER WORDS, IT WOULD MEAN THAT THE APPRECIATION IN THE M ARKET RATE OF THE LAND FROM THE DATE OF THE AGREEMENT OF SALE CON SIDERED UNDER THE SAID RULES IS EIGHT PER CENT PER ANNUM. IF WITH OUT ANY MATERIAL ON RECORD TO SHOW TO WHAT EXTENT THE APPRECIATION I N THE VALUE OF THE LAND IS DURING THE TIME GAP BETWEEN THE TRANSAC TION IN THE SALE INSTANCE AND THE TRANSACTION OF THE SUIT LAND, IF A MERE HYPOTHETICAL APPRECIATION IS TO BE TAKEN, THERE APP EARS TO BE NO JUSTIFICATION FOR NOT TAKING THE SAME RATE OF APPRE CIATION WHICH IS TAKEN UNDER R. 48-I FOR CALCULATING THE DISCOUNTED VALUE OF THE CONSIDERATION AS ON THE DATE OF THE AGREEMENT OF SA LE. 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 R ATE OF APPRECIATION IS TAKEN, SOME ALLOWANCE HAS TO BE MAD E WHILE APPLYING THE TEST OF DIFFERENCE OF 15 PER CENT OR M ORE FOR PROBABLE ERRORS WHILE DETERMINING THE QUESTION WHETHER THE S UIT LAND IS GROSSLY UNDERVALUED OR NOT. ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 19 - : IT HAS TO BE BORNE IN MIND THAT EVEN AS PER THE CIR CULAR STYLED AS INSTRUCTION NO. 1/A 88 OF THE CBDT REFERRED TO IN C . B. GAUTAM'S CASE (SUPRA), AND THE AFFIDAVIT FILED ON BEHALF OF THE SAID BOARD IN THE SAID CASE, THE MAIN OBJECTIVE OF CHAPTER XX-C O F THE ACT IS TO CHECK PROLIFERATION OF BLACK MONEY IN REAL ESTATE T RANSACTIONS AND TO ENFORCE DECLARATION OF THE TRUE MARKET VALUE OF THE IMMOVABLE PROPERTY IN QUESTION WHICH IS THE SUBJECT-MATTER OF TRANSFER BETWEEN THE PARTIES SO AS TO PREVENT EVASION OF TAX ES. THE SAID INSTRUCTIONS FURTHER SHOW THAT THE PROVISIONS OF CH APTER XX-C OF THE ACT ARE NOT INTENDED TO HARASS BONA FIDE AND HO NEST PURCHASERS OR SELLERS OF IMMOVABLE PROPERTIES. PARA 3 OF THE SAID INSTRUCTIONS, IN PARTICULAR, SHOWS THAT IT IS ONLY FOR GOOD REASONS THAT THE RIGHT OF PRE-EMPTIVE PURCHASE HAS TO THE E XERCISED BY THE DEPARTMENT. THE SAID INSTRUCTIONS ALSO PROVIDE THAT THE RULE OF DIFFERENCE OF 15 PER CENT AND ABOVE BETWEEN THE SAL E TRANSACTION IN QUESTION AND THE TRUE OR FAIR MARKET PRICE OF TH E IMMOVABLE PROPERTY IN QUESTION AS DETERMINED BY THE DEPARTMEN T IS NOT A RIGID RULE AND A REASONABLE MARGIN FOR PROBABLE ERR ORS IN ESTIMATION NEEDS TO BE KEPT IN VIEW. IF THE ABOVE INSTRUCTIONS OF THE CBDT REFERRED TO I N PARA 14 OF THE JUDGMENT OF THE SUPREME COURT IN C. B. GAUTAM'S CAS E (SUPRA), ARE KEPT IN VIEW, IT IS DIFFICULT TO HOLD THAT THE DEPARTMENT HAS MADE OUT GOOD REASON FOR COMPULSORY PURCHASE OF THE SUIT PROPERTY AND TO SHOW THAT THE SALE TRANSACTION IN Q UESTION IS NOT A BONA FIDE TRANSACTION BETWEEN THE PARTIES. 9. IT IS ALSO DIFFICULT TO APPRECIATE HOW THE APPRO PRIATE AUTHORITY WHILE CONSIDERING THE QUESTION OF GROSS UNDERVALUAT ION WORKS OUT THE LAND RATE BY DISCOUNTING THE LAND RATE AGREED T O BETWEEN THE PARTIES, PARTICULARLY WHERE THE RATE OF THE LAND IN THE SALE INSTANCE IS NOT DETERMINED ON THE BASIS OF ITS DISCOUNTED VA LUE. SO FAR AS THE PAYMENT OF CONSIDERATION BY THE CENTRAL GOVERNM ENT FOR ITS COMPULSORY PURCHASE OF IMMOVABLE PROPERTY IS CONCER NED, THE CENTRAL GOVERNMENT MAY PAY THE APPARENT CONSIDERATI ON AS DETERMINED BY CALCULATING THE DISCOUNTED VALUE OF T HE CONSIDERATION AGREED TO BETWEEN THE PARTIES, I. E., IN ACCORDANCE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 20 - : WITH S. 269UA(B) OF THE ACT R/W R. 48-I OF THE IT RULES, 1962, AS I T IS STATUTORY. BUT THEN IT HAS TO BE SEEN THAT AS PE R THE AGREEMENT BETWEEN THE TRANSFEROR AND THE TRANSFEREE, EVEN THO UGH THE BALANCE OF CONSIDERATION IS TO BE PAID AT A FUTURE DATE, THE CONSIDERATION AGREED TO BETWEEN THEM IS ON THE DATE OF THE AGREEMENT OF SALE, WHICH IN OTHER WORDS REPRESENTS THE MARKET VALUE AS DETERMINED AS ON THAT DATE, I. E., THE DAT E OF AGREEMENT OF SALE. IT IS FURTHER DIFFICULT TO SEE HOW SUCH A MARKET RATE CAN APPRECIATE WITHIN A PERIOD OF THREE MONTHS AFTER WH ICH 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 SU IT LAND REPRESENTS ITS TRUE AND FAIR MARKET VALUE, IT IS NE CESSARY TO SEE THAT ALTHOUGH THE APPROPRIATE AUTHORITY HAS REJECTE D THE SALE INSTANCE DT. 23RD NOV., 1989, OF THE CIVIL LINES AR EA ITSELF RELIED UPON BY THE PETITIONER ON THE GROUND THAT THERE IS CONSIDERABLE TIME GAP, THE SALE INSTANCE DT. 26TH DEC., 1990, RE LIED 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 APPRECI ATION AT THE RATE OF 12 PER CENT PER ANNUM IS GIVEN TO THE TRANS ACTION IN THE SALE INSTANCE FOR THE TIME GAP BETWEEN IT AND THE S ALE TRANSACTION OF THE SUIT LAND, THERE IS NO REASON WHY SIMILAR OR AT ANY RATE SOME APPROPRIATE INCREASES SHOULD NOT HAVE BEEN GIVEN BY THE APPROPRIATE AUTHORITY TO THE LAND RATE IN THE TRANS ACTION IN THE ABOVE SALE INSTANCE DT. 23RD NOV., 1989, FOR ITS CO MPARISON WITH THE SUIT TRANSACTION AS IT HAD DONE IN THE CASE OF THE SALE INSTANCE RELIED UPON BY IT. THE FINDING OF THE APPROPRIATE A UTHORITY THAT THERE IS A CONSIDERABLE TIME GAP BETWEEN THE AFORES AID SALE INSTANCE DT. 23RD NOV., 1989, AND THE SUIT TRANSACT ION AND, THEREFORE, THE SAID SALE TRANSACTION DT. 23RD NOV., 1989, CANNOT BE TAKEN AS A COMPARABLE SALE TRANSACTION IS CLEARLY A RBITRARY AND PERVERSE. SINCE THE SALE INSTANCE DT. 23RD NOV., 19 89, WAS FROM THE CIVIL LINES AREA OF NAGPUR ITSELF, THE APPROPRI ATE AUTHORITY SHOULD HAVE CONSIDERED THE SAME BY GIVING APPROPRIA TE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 21 - : APPRECIATION FOR VALUE OF THE LAND FOR THE TIME GAP BETWEEN THE TRANSACTION IN THE SAID SALE INSTANCE DT. 23RD NOV. , 1989, AND THE SUIT TRANSACTION FOR COMPARING THEIR LAND RATES. AS REGARDS THE AFORESAID SALE INSTANCE IN WHICH THE SALE DEED IS DT. 23RD NOV., 1989, IT IS MATERIAL TO SEE THAT THE VAL UER IN HIS VALUATION REPORT HAS OBSERVED THAT THE PLOT THEREIN HAS A PRIME LOCATION, I. E., IT IS ON THE MAIN ROAD WHEREAS THE SUIT PLOT IS IN AN INNER LANE. THE PLOT RATE, ACCORDING TO HIM, IS RS. 175 PER SQ. FT. FOR THE TIME FACTOR, HE ADDED 25 PER CENT (I. E., M ORE THAN 12 PER CENT INCREASE GRANTED BY THE APPROPRIATE AUTHORITY TO SALE INSTANCE RELIED UPON BY IT) TO THE ABOVE VALUE OF RS. 175 PE R SQ. FT. OF THE PLOT AND THE RATE THUS WORKED OUT BY HIM FOR THE LA ND IN THE SAID SALE INSTANCE DT. 23RD NOV., 1989, IS RS. 219 PER S Q. FT. ON THE DATE OF THE AGREEMENT OF SALE OF THE SUIT PLOT, I. E. 24 TH JAN., 1992. IN FACT IF 12 PER CENT INCREASE PER YEAR WHICH IS MADE APPLICABLE BY THE APPROPRIATE AUTHORITY TO THE SALE INSTANCE RELI ED UPON BY IT IS GIVEN, THE RATE OF THE ABOVE SALE INSTANCE RELIED U PON BY THE PETITIONER WOULD WORK OUT TO A RATE LOWER THAN THE RATE OF RS. 219 PER SQ. FT. IT MAY THEN BE SEEN THAT IF THE ALLOWAN CE IS MADE FOR THE PRIME LOCATION OF THE LAND IN THE SAID SALE INS TANCE DT. 23RD NOV., 1989, THE MARKET RATE FOR THE SUIT LAND SHOUL D BE STILL LESS THAN THE RATE FOR THE LAND IN THE SAID SALE INSTANC E DT. 23RD NOV., 1989. HOWEVER, THE DISCOUNTED RATE WHICH IS WORKED OUT BY THE APPROPRIATE AUTHORITY FOR THE SUIT LAND IS RS. 221 PER SQ. FT. WHICH IS MORE THAN THE ABOVE RATE OF THE LAND IN 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 SUBMIT TED BY THE PETITIONER ALONG WITH HER REPLY TO THE SHOW-CAUSE N OTICE, THE SAID SALE INSTANCE IS REJECTED BY THE APPROPRIATE AUTHOR ITY ON THE GROUND THAT IT IS A SALE TO THE TENANT IN OCCUPATIO N. 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 APPROPRIAT E AUTHORITY HAS ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 22 - : ACTED IN AN ARBITRARY MANNER BECAUSE IN THE SALE IN STANCE RELIED UPON BY IT, THE PURCHASER OF THE LAND WAS THE OWNER OF AN ADJOINING LAND WHO WAS TO BENEFIT BY THE PURCHASE O F 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 MARKE T VALUE OF THE LAND PURCHASED BY HIM. THE APPROPRIATE AUTHORITY SH OULD HAVE IN ALL FAIRNESS REJECTED THE SAID TRANSACTION AS NOT B EING A COMPARABLE SALE TRANSACTION AS IT HAS DONE IN REGARD TO THE AB OVE SALE TRANSACTION IN RELATION TO THE TENANT IN OCCUPATION RELIED UPON BY THE PETITIONERS. IT IS, HOWEVER, PERTINENT TO SEE THAT THE SALE AGRE EMENT IN THE SECOND SALE INSTANCE IS DT. 23RD NOV., 1991, WHICH IS VERY PROXIMATE IN POINT OF TIME TO THE SUIT TRANSACTION WHICH IS DT. 24TH FEB., 1992, I. E., JUST AFTER ABOUT THREE MONTHS. T HE SAID SALE INSTANCE IS ABOUT THE PLOT IN CIVIL LINES, NAGPUR, ITSELF WHICH IS CLOSE TO THE SUIT LAND. ITS AREA IS 7,500 SQ. FT. A ND THE CONSIDERATION FOR ITS SALE IS RS. 14,00,000. THE LA ND RATE WORKED OUT BY THE VALUER FOR THE ABOVE SECOND SALE INSTANC E IS RS. 186.66 PER SQ. FT. IT IS PERTINENT TO SEE THAT THE VALUER HAS ACTUALLY GIVEN THE RATE OF RS. 210 PER SQ. FT. TO THE SUIT LAND ON THE DATE OF THE AGREEMENT, I. E., 24TH FEB., 1992, I. E., JUST AFTE R THREE MONTHS OF THE TRANSACTION IN THE ABOVE SALE INSTANCE DT. 23RD NOV., 1991, WHICH SHOULD, THEREFORE, NORMALLY TAKE CARE OF THE LOWER VALUE OFFERED BY THE TENANT IN OCCUPATION OF THE LAND IN THE ABOVE SALE INSTANCE. WHAT IS MATERIAL TO BE SEEN IS THAT ALTHO UGH THE VALUER HAS TAKEN INTO CONSIDERATION THE DISADVANTAGEOUS FA CTOR OF THE TENANT IN OCCUPATION OFFERING A LOWER RATE FOR THE LAND IN THE ABOVE SALE INSTANCE DT. 23RD NOV., 1991, WHICH IS CLOSE T O THE SUIT TRANSACTION TIME-WISE AND VICINITY-WISE, THE APPROP RIATE AUTHORITY DID NOT AT ALL TAKE INTO CONSIDERATION THE ADVANTAG EOUS FACTOR OF THE LAND PURCHASED BY THE OWNER OF THE ADJOINING LA ND IN THE SALE INSTANCE RELIED UPON BY IT BY GIVING TO THE TRANSAC TION THEREIN, THE APPROPRIATE DISCOUNT IN COMPARING ITS RATE WITH THE RATE OF THE SUIT LAND. ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 23 - : EVEN OTHERWISE EXCLUDING THE AFORESAID SECOND SALE INSTANCE DT. 23RD NOV., 1991, ON THE GROUND THAT THE LAND THEREI N IS PURCHASED BY THE TENANT IN OCCUPATION, THE FIRST SALE INSTANC E DT. 23RD NOV., 1989, CITED BY THE PETITIONER CLEARLY SHOWS THAT TH E RATE OF THE SUIT LAND IS NOT GROSSLY UNDERSTATED. IT MAY BE SEEN THA T IN DETERMINING THE RATE OF RS. 210 PER SQ. FT., THE VALUER OF THE PETITIONER HAD TAKEN INTO CONSIDERATION THE ABOVE TWO SALE INSTANC ES REFERRED TO BY HIM AND THE LOCATION, SIZE, SHAPE AND THE PERMIS SIBLE FSI (FSI ALLOWED IS ONLY ONE). THE VALUATION REPORT OF HER V ALUER SUBMITTED BY THE PETITIONER TO THE APPROPRIATE AUTHORITY THUS DESERVED CONSIDERATION. THE RATE OFFERED BY THE PETITIONER F OR THE SUIT LAND, VIZ., RS. 225 PER SQ. FT. WHOSE DISCOUNTED RATE IS WORKED 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 INSTANC E 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 ADJOIN ING LAND IN THE SALE INSTANCE RELIED UPON BY THE APPROPRIATE AUTHOR ITY. THIS IS CLEAR FROM THE FIRST SALE INSTANCE CITED BY THE PET ITIONER IN WHICH THE SALE OF THE LAND IS BY MR. A. S. BOBDE, ADVOCAT E 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 D IFFICULT TO SEE HOW IN ONE YEAR'S TIME, I. E., ON 26TH DEC., 1990, WHEN TH E SALE AGREEMENT OF THE LAND IN THE SALE INSTANCE RELIED U PON BY THE APPROPRIATE AUTHORITY HAS TAKEN PLACE, THE DISCOUNT ED RATE WOULD SHOOT UP TO RS. 304.20 PER SQ. FT. THIS WOULD THUS CLEARLY DEMONSTRATE THAT FOR HIS OWN BENEFIT, I. E., TO GET MORE FSI THE OWNER OF THE ADJOINING LAND HAS OFFERED A HIGHER RA TE FOR PURCHASING THE LAND IN THE SALE INSTANCE RELIED UPO N BY THE APPROPRIATE AUTHORITY. FOR THIS REASON ALSO THE SAL E INSTANCE RELIED UPON BY THE APPROPRIATE AUTHORITY CANNOT BE SAID TO REFLECT THE TRUE MARKET VALUE OF THE LAND THEREIN, I. E., THE L AND PURCHASED BY ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 24 - : SHRI SATISH KALE FROM SHRI VALLABH CO-OPERATIVE HOU SING SOCIETY, CIVIL LINES, NAGPUR. 13. THERE IS ANOTHER ANGLE TO THE QUESTION OF THE A LLEGED UNDERVALUATION OF THE SUIT PROPERTY WHICH SHOULD HA VE BEEN LOOKED INTO PROPERLY BY THE APPROPRIATE AUTHORITY. THE PET ITIONER WHO WAS THE PURCHASER OF THE SUIT LAND WAS AWARE OF THE FAC T THAT THERE WAS ENCROACHMENT OF THE OWNER OF THE ADJOINING PLOT TO THE EXTENT OF 200 SQ. FT. UPON THE SUIT LAND WHICH FACT SHE HA D BROUGHT TO THE NOTICE OF THE APPROPRIATE AUTHORITY IN HER REPLY TO THE SHOW-CAUSE NOTICE. THERE WAS THUS A DISPUTE ABOUT POSSESSION A ND OWNERSHIP OF THE ENCROACHED LAND. THEREFORE, ALTHOUGH RESPOND ENT NO. 3 TRANSFEROR HAD AGREED TO PUT THE PETITIONER IN VACA NT POSSESSION OF THE SUIT LAND, SHE COULD NOT HAVE DONE SO ABOUT THE ENCROACHED LAND UNLESS HER DISPUTE ABOUT THE SAME WITH THE OWN ER OF THE ADJOINING LAND WAS RESOLVED. IN VIEW OF THE ABOVE F ACTOR, ABOUT THE ENCROACHMENT UPON THE SUIT LAND, WHICH WOULD CA USE DELAY IN GIVING POSSESSION OF THE SAID LAND TO THE PETITIONE R, IF NOT TOTAL LOSS OF THE SAME, IF THE OWNER OF THE ADJOINING LAND WER E TO SUCCEED, THE CONSIDERATION AGREED TO BETWEEN THE PARTIES MAY NOT REFLECT THE TRUE MARKET VALUE OF THE SUIT LAND. BUT THEN TH IS FACTOR HAS TO BE BORNE IN MIND WHILE CONSIDERING THE QUESTION WHE THER THE SUIT LAND IS GROSSLY UNDERVALUED BECAUSE IT WOULD GIVE A GOOD REASON WHY THE SUIT LAND HAS NOT FETCHED ITS PROPER MARKET VALUE, IF AT ALL, AS HELD BY THE APPROPRIATE AUTHORITY, ITS VALUE IS UNDERSTATED. A PERUSAL OF THE FINDING OF THE APPROPRIATE AUTHORI TY IN PARA 7 OF THE ORDER SHOWS THAT IT HAS NOT CONSIDERED THE QUES TION FROM THIS ANGLE BUT HAS CONSIDERED IT ONLY FOR THE PURPOSE OF WITHHOLDING THE PAYMENT OF THE VALUE OF THE ENCROACHED LAND TO RESP ONDENT NO. 3 TILL THE SAID DISPUTE WAS RESOLVED AND THE CENTRAL GOVERNMENT THROUGH ITS APPROPRIATE DEPARTMENT WAS PUT IN POSSE SSION OF THE SAID LAND SINCE RESPONDENT NO. 3 IN HER AGREEMENT O F SALE DT. 24TH FEB., 1992, WITH THE PETITIONER HAD AGREED TO GIVE VACANT POSSESSION OF THE SUIT LAND FREE FROM ENCUMBRANCES ON THE DATE OF EXECUTION AND REGISTRATION OF THE SALE DEED. THIS I S YET ANOTHER ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 25 - : INFIRMITY IN THE ORDER OF COMPULSORY PURCHASE PASSE D 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 S ALE INSTANCES WHICH ARE COMPARABLE TIME-WISE AND LOCATION-WISE WI TH THE SALE TRANSACTION OF THE PROPERTY IN QUESTION UNDER THE A GREEMENT 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 BECAU SE OF THE RELIANCE PLACED BY THE APPROPRIATE AUTHORITY UPON T HE SALE INSTANCE WHICH DOES NOT COMPARE WITH THE SUIT TRANS ACTION, THE PARTIES TO THE TRANSACTION ARE REQUIRED TO SUFFER B ECAUSE OF THE DELAY IN COMPLETION OF THAT TRANSACTION CAUSED BY T HE COURT PROCEEDINGS. THE APPROPRIATE AUTHORITY MUST KEEP IN MIND THE INSTRUCTIONS ISSUED BY THE CBDT REFERRED TO ABOVE I N WHICH THE OBJECT OF COMPULSORY PURCHASE OF THE IMMOVABLE PROP ERTIES, WHICH IS POINTED OUT, IS TO PREVENT PROLIFERATION OF BLAC K MONEY IN REAL ESTATE TRANSACTIONS AND EVASION OF TAXES BY GROSS U NDERVALUATION OF THE IMMOVABLE PROPERTY IN QUESTION. IT IS, THERE FORE, NECESSARY THAT RECOURSE TO COMPULSORY PURCHASE OF THE IMMOVAB LE PROPERTY IN QUESTION UNDER CHAPTER XX-C OF THE ACT SHOULD BE TAKEN ONLY IN CLEAR CASES OF GROSS UNDERVALUATION FROM WHICH THE INFERENCE MUST CLEARLY FLOW THAT IT IS DONE FOR EVASION OF TAXES. 14. AS REGARDS THE PRINCIPLES RELATING TO THE COMPA RABLE SALE INSTANCES, THE SAID PRINCIPLES ARE WELL SETTLED BY THE JUDGMENTS OF THE SUPREME COURT REGARDING THE DETERMINATION OF MA RKET VALUE OF THE ACQUIRED LAND UNDER THE LAND ACQUISITION ACT WHICH PRINCIPLES CAN USEFULLY BE RESORTED TO IN DETERMINATION OF THE QUESTION OF GROSS UNDERVALUATION OF THE MARKET VALUE OF THE PRO PERTY IN QUESTION WHICH ARE THE SUBJECT-MATTER OF COMPULSORY PURCHASE UNDER CHAPTER XX-C OF THE ACT. AS POINTED OUT HEREI NBEFORE, THE SALE INSTANCE RELIED UPON BY THE APPROPRIATE AUTHOR ITY CANNOT BE SAID TO BE A COMPARABLE SALE INSTANCE AND, THEREFOR E, CANNOT FURNISH A GOOD GUIDE FOR DETERMINING THE MARKET VAL UE OF THE SUIT LAND. ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 26 - : 15. HOWEVER, AS REGARDS THE CONTENTION RAISED ON BE HALF OF THE PETITIONER THAT THE MARKET RATE FIXED FOR THE AREA IN QUESTION AT THE RELEVANT TIME IN THE LAND RATES FIXED BY THE NAGPUR MUNICIPAL CORPORATION, NAGPUR, AS WELL AS BY THE STAMP AUTHOR ITY FOR THE PURPOSES OF LEVY OF STAMP DUTY ON REGISTRATION OF T HE DOCUMENTS WAS RS. 1,500 PER SQ. METRE, I. E., RS. 145 PER SQ. FT. AND, THEREFORE, THE RATE OF RS. 225 PER SQ. FT. AGREED T O BETWEEN THE PARTIES FOR PURCHASE OF THE SUIT LAND WAS MORE THAN THE MARKET RATE FOR SUCH LAND, IT MAY BE SEEN THAT THE RATES O F PROPERTIES MAINTAINED BY THE ABOVE AUTHORITY OR OFFICERS FOR T HE PURPOSE OF CHECKING EVASION OF STAMP DUTY UPON TRANSFER DEEDS ARE NOT PURSUANT TO THE PROVISION IN ANY STATUTE, RELATING EVEN TO STAMP DUTY. AT ANY RATE IT CANNOT BE A BASIS FOR DETERMIN ATION OF THE MARKET VALUE FOR ACQUISITION OF OR FOR COMPULSORY P URCHASE OF ANY LAND WHERE THE USUAL TEST IS OF A PRUDENT BUYER AND A PRUDENT SELLER DETERMINED BY THE EVIDENCE OF SALE TRANSACTI ON, IF AVAILABLE IN THE VICINITY OF THE LAND IN QUESTION WHOSE MARKE T RATE IS TO BE DETERMINED POSSESSING THE SAME OR MORE OR LESS SIMI LAR ADVANTAGEOUS FEATURES. THIS IS THE VIEW TAKEN BY TH E SUPREME COURT IN THE CASE OF JAWAJEE NAGNATHAM VS. REVENUE DIVISIONAL OFFICER . THE SUBMISSION ON BEHALF OF THE PETITIONERS BASE D UPON THE RATES OF PROPERTIES MAINTAINED BY THE STATE GOV ERNMENT FOR THE PURPOSE OF CHECKING EVASION OF STAMP DUTY ON TR ANSFER DEEDS CANNOT, THEREFORE, BE ACCEPTED. HOWEVER, THAT WOULD NOT MEAN THAT THE DEPARTMENT HAS CORRECTLY DETERMINED THE MA RKET 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 O F THE MATERIAL OR THE REASON(S) BEING DISCLOSED IN THE SHOW-CAUSE NOT ICE FOR ENTERTAINING A TENTATIVE OR A PRIMA FACIE VIEW THAT THE VALUE OF THE SUIT LAND IS GROSSLY UNDERSTATED IN THE AGREEMENT O F SALE BETWEEN THE PARTIES, THE TRANSFEROR AND THE TRANSFEREE HAVE NO REAL OPPORTUNITY TO MEET THE CASE OF THE APPROPRIATE AUT HORITY OR THE IT DEPARTMENT CONCERNED IN THAT REGARD AND HENCE TH ERE IS NON- COMPLIANCE WITH THE BASIC PRINCIPLES OF NATURAL JUS TICE. THE SHOW- CAUSE NOTICE ISSUED BY THE DEPARTMENT FOR PRE-EMPTI VE PURCHASE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 27 - : BY THE CENTRAL GOVERNMENT UNDER CHAPTER XX-C OF THE ACT MUST DISCLOSE HOW THE TENTATIVE OR PRIMA FACIE CONCLUSIO N IS ARRIVED AT BY THE APPROPRIATE AUTHORITY THAT THE PROPERTY SOUG HT TO BE COMPULSORILY PURCHASED IS SIGNIFICANTLY UNDERVALUED , WHICH MEANS THAT IF ANY PARTICULAR SALE INSTANCE (S) IS/ARE REL IED UPON TO SHOW HOW THE PROPERTY IN QUESTION IS SIGNIFICANTLY UNDER -VALUED, IT IS NECESSARY FOR THE APPROPRIATE AUTHORITY TO REFER TO THE SAID DETAILS IN THE SHOW-CAUSE NOTICE SO THAT THE TRANSFEROR AND /OR THE TRANSFEREE HAVE REAL AND PROPER OPPORTUNITY TO MEET THE CASE OF THE DEPARTMENT. IT IS NECESSARY TO SEE THAT ISSUING A SHOW-CAUSE NOTICE IS NOT MERELY AN EMPTY FORMALITY WHICH IS IN CORPORATED IN S. 269UD(1) OF THE ACT TO SAVE IT FROM ITS INVALIDITY BUT THE OPPORTUNITY TO SHOW CAUSE HAS TO BE REAL AND SUBSTA NTIAL WHICH MEANS THAT THE TRANSFEROR AND THE TRANSFEREE CONCER NED MUST KNOW AS TO WHY THE APPROPRIATE AUTHORITY IS HOLDING THAT THEIR IMMOVABLE PROPERTY UNDER THE AGREEMENT OF SALE IS S IGNIFICANTLY UNDERVALUED. WHEN AN OBLIGATION IS CAST UPON AN AUTHORITY TO GIV E A NOTICE TO SHOW CAUSE BEFORE REACHING ANY FINAL CONCLUSION AGA INST THE PERSON AFFECTED BY ITS ACTION, THE PURPOSE AND THE REQUIREMENT OF SUCH A SHOW-CAUSE NOTICE IS TWO-FOLD (I) THE NOTICE E MUST GET AN OPPORTUNITY TO MEET THE CASE AGAINST HIM AND (II) H E MUST HAVE AN OPPORTUNITY TO SET FORTH HIS OWN CASE TO SHOW WHY A N ORDER ADVERSE TO HIM SHOULD NOT BE PASSED. IN THIS REGARD , DE SMITH IN HIS JUDICIAL REVIEW OF ADMINISTRATIVE ACTION (FOURT H EDN.) HAS OBSERVED AT PAGE 196 AS FOLLOWS : 'NATURAL JUSTICE GENERALLY REQUIRES THAT PERSONS LI ABLE TO BE DIRECTLY AFFECTED BY PROPOSED ADMINISTRATIVE ACTS, DECISIONS OR PROCEEDINGS BE GIVEN ADEQUATE NOTICEE OF WHAT IS PROPOSED, SO T HAT THEY MAY BE IN A POSITION - (A) TO MAKE REPRESENTATIONS ON THEIR OWN BEHALF; OR (B) TO APPEAR AT A HEARING OR INQUIRY (IF ONE IS TO BE HELD); AND (C) EFFECTIVELY TO PREPARE THEIR OWN CASE AND TO AN SWER THE CASE (IF ANY) THEY HAVE TO MEET'. ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 28 - : IT MUST BE THEN SEEN THAT THE CONCLUSIONS OF THE AU THORITY AT THE STAGE OF GIVING A SHOW-CAUSE NOTICE ARE ALWAYS PRIM A FACIE OR TENTATIVE CONCLUSIONS FOR IF IT IS NOT SO, ITS ULTI MATE ORDER WOULD SUFFER FROM ITS BIAS, I. E., ITS PRE-DETERMINED MIN D. HOWEVER, BECAUSE ITS CONCLUSIONS AT THE STAGE OF SHOW-CAUSE NOTICE ARE ONLY PRIMA FACIE OR TENTATIVE CONCLUSIONS, IT WOULD NOT MEAN THAT THEY ARE NOT REQUIRED TO BE DISCLOSED IN THE SHOW-CAUSE NOTICE. THE ABOVE STAND TAKEN BY THE RESPONDENTS IN THEIR RETUR N IS THUS WHOLLY MISCONCEIVED AND IS UNTENABLE. IN FACT, IT B ETRAYS THE IGNORANCE OF THE RESPONDENTS ABOUT THE BASIC TENETS OF THE PRINCIPLES OF NATURAL JUSTICE WHICH WE HAVE REFERRE D TO ABOVE AS REQUIREMENTS OF A PROPER SHOW-CAUSE NOTICE. 17. AS REGARDS THE CONTENTION ON BEHALF OF THE RESP ONDENTS THAT THE OBLIGATION TO DISCLOSE THE REASONS OR THE RELEV ANT MATERIAL TO THE TRANSFEROR AND THE TRANSFEREE UPON WHICH THE AP PROPRIATE AUTHORITY HAS BASED ITS PRIMA FACIE VIEW THAT THE P ROPERTY IN QUESTION IS GROSSLY UNDERVALUED NEEDS TO BE DISPENS ED WITH ON THE GROUND THAT THERE IS RESTRAINT OF THE TIME FRAME WI THIN WHICH THE ORDER OF COMPULSORY PURCHASE HAS TO BE PASSED, IT M AY BE SEEN THAT FOR THE PURPOSE OF PASSING AN ORDER OF COMPULS ORY PURCHASE AND EVEN BEFORE ISSUING A SHOW-CAUSE NOTICE, THE AP PROPRIATE AUTHORITY HAS TO MAKE AND MAKES AN ENQUIRY AND COLL ECTS MATERIAL WITHIN THE TIME FRAME TO DETERMINE WHETHER THE PROP ERTY IN QUESTION IS GROSSLY UNDERVALUED OR NOT. WHEN IT DOE S SO AND REACHES A PRIMA FACIE VIEW WITHIN THE TIME FRAME UP ON THE ABOVE QUESTION OF GROSS-UNDERVALUATION, THE TIME RESTRAIN T IN TAKING ACTION UNDER S. 269UD CANNOT BE A REASON FOR NOT DISCLOSING THE SAID MATERIAL IN THE SHOW-CAUSE NOTICE WHICH IS A M UST IN VIEW OF THE JUDGMENT OF THE SUPREME COURT IN C. B. GAUTAM'S CASE (SUPRA). 18. AS REGARDS THE OTHER REASON GIVEN BY THE RESPON DENTS FOR DISPENSING WITH THE REQUIREMENT OF GIVING REASON(S) OR MATERIAL IN THE SHOW-CAUSE NOTICE ON THE BASIS OF WHICH A PRIMA FACIE OR TENTATIVE CONCLUSION IS REACHED BY THE APPROPRIATE AUTHORITY THAT THE PROPERTY IN QUESTION IS GROSSLY UNDERVALUED, VI Z., THAT THE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 29 - : ENQUIRY CONTEMPLATED BY THE SUPREME COURT BEFORE TA KING ACTION UNDER S. 269UD(1) OF THE ACT IS SUMMARY OR A LIMITED ENQUIRY, IT MAY BE SEEN THAT WHEN THE PRINCIPLES OF NATURAL JUS TICE ARE ENGRAFTED UPON S. 269UD(1) OF THE ACT, ITS BASIC REQUIREMENT, AS HEREINBEFORE REFERRED TO, IS THAT THE TRANSFEROR AN D THE TRANSFEREE MUST HAVE A FAIR AND PROPER OPPORTUNITY TO MEET THE CASE OF THE DEPARTMENT ABOUT THE UNDERVALUATION OF THEIR PROPER TY IN QUESTION AND TO HAVE ALSO A FAIR AND PROPER OPPORTUNITY TO P UT FORTH THEIR CASE TO SHOW HOW THE CONSIDERATION AGREED TO BETWEE N THEM REPRESENTS THE FAIR MARKET VALUE OF THE PROPERTY IN QUESTION OR IF NOT SO, TO PUT FORTH REASONS THEREFOR. THE ENQUIRY ENVISAGED BY S. 269UD(1) OF THE ACT IS SUMMARY IN NATURE IN THE SENSE THAT NO ELABORATE PROCEDURE OF ENQUIRY, I. E., LEADING ELAB ORATE EVIDENCE, ETC., IS CONTEMPLATED BY IT. HOWEVER, SURELY IT CAN NOT MEAN THAT BECAUSE THE ENQUIRY IS SUMMARY IN NATURE ITS VERY B ASIC REQUIREMENT, VIZ., THE OBSERVANCE OF THE MINIMAL PR INCIPLES OF NATURAL JUSTICE REFERRED TO ABOVE IS DISPENSED WITH . OTHERWISE, SUCH AN ENQUIRY WOULD BECOME AN EMPTY FORMALITY AND WOULD NOT BE MEANINGFUL AND EFFECTIVE. 19. IT MAY BE SEEN THAT AS POINTED OUT HEREINBEFORE IN REGARD TO THE REASONS OF TIME RESTRAINT EVEN IN A SUMMARY OR LIMITED INQUIRY, THE APPROPRIATE AUTHORITY OR THE CONCERNED IT DEPAR TMENT HAS TO MAKE AND IN FACT MAKES AN ENQUIRY AND COLLECTS MATE RIAL ON THE BASIS OF WHICH IT COMES TO A TENTATIVE CONCLUSION O N THE QUESTION WHETHER THE PROPERTY IN QUESTION IS GROSSLY UNDERVA LUED OR NOT. IF SUCH AN ENQUIRY IS ESSENTIAL EVEN IN A SUMMARY OR L IMITED ENQUIRY, THERE IS NO REASON WHY THE MATERIAL COLLECTED THROU GH SUCH AN ENQUIRY SHOULD NOT BE DISCLOSED TO THE TRANSFEROR A ND THE TRANSFEREE BEFORE TAKING A FINAL VIEW IN THE MATTER . SINCE THE MATERIAL ON THE BASIS OF WHICH THE APPROPRIATE AUTH ORITY HOLDS THE PRIMA FACIE VIEW THAT THE PROPERTY IN QUESTION IS G ROSSLY UNDERVALUED HAS TO BE THUS IN ITS POSSESSION BEFORE TAKING ACTION UNDER S. 269UD(1) OF THE ACT, THE QUESTION OF TIME-FRAME AND SUMMARY NATURE OF ENQUIRY HAS NO RELEVANCE TO THE Q UESTION OF INCORPORATING IN THE SHOW-CAUSE NOTICE THE PARTICUL ARS OF THE MATERIAL IN THE POSSESSION OF THE APPROPRIATE AUTHO RITY ON THE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 30 - : BASIS OF WHICH IT ENTERTAINS A VIEW THAT THE PROPER TY IN QUESTION IS GROSSLY UNDERVALUED. 20. THE PETITIONER IS, THEREFORE, CLEARLY PREJUDICE D IN HER DEFENCE SINCE THE RELEVANT MATERIAL UPON WHICH THE PRIMA FA CIE 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 PAS SED PURSUANT TO SUCH A DEFECTIVE SHOW-CAUSE NOTICE IS THUS ILLEG AL AND IS VITIATED FOR NOT BEING IN CONSONANCE WITH THE BASIC PRINCIPL ES 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 SIGNIFICAN TLY 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 APPROPRIATE AUTHORITY CANNOT THUS BE SUSTAINED AND IS LIABLE TO BE SET ASIDE. IN THE ABOVE VIEW, WHICH WE HAVE TAKEN, IT IS NOT NECE SSARY FOR US TO DECIDE THE OTHER CONTENTION RAISED ON BEHALF OF THE PETITIONER, VIZ., WHETHER THE PROVISIONS OF COMPULSORY PURCHASE IN CH APTER XX-C OF THE ACT ARE NOT ATTRACTED IN THE FACTS OF THE INSTA NT CASE SINCE THE SHARE OF EACH OF THE TWO BENEFICIARIES, I. E., TRAN SFERORS IS BELOW RS. 10,00,000 WHICH REQUIREMENT FOR COMPULSORY PURC HASE UNDER THE SAID CHAPTER IS LAID DOWN IN R. 48K OF THE IT R ULES, 1962. 22. LEARNED COUNSEL FOR RESPONDENTS NOS. 1 AND 2 HA S URGED BEFORE US THAT, IF THE SHOW-CAUSE NOTICE GIVEN TO T HE PARTIES IS DEFECTIVE, THE PROCEEDINGS SHOULD BE REMANDED TO TH E APPROPRIATE AUTHORITY FOR A FRESH ENQUIRY AND DECISION ACCORDIN G TO LAW AFTER A PROPER SHOW-CAUSE NOTICE IS GIVEN TO THE PARTIES CO NTAINING THE REASONS OR THE MATERIAL ON THE BASIS OF WHICH THE A PPROPRIATE AUTHORITY IS OF THE VIEW THAT THE PROPERTY IN QUEST ION IS GROSSLY UNDERVALUED. WE CANNOT ACCEPT THE ABOVE SUBMISSION MADE ON BEHALF OF THE RESPONDENTS BECAUSE JUDICIAL NOTICE C AN BE TAKEN OF THE FACT THAT BY PASSAGE OF TIME PRICES OF LAND APP RECIATE AND IT WOULD BE UNJUST TO THE VENDOR TO PEG HIM DOWN TO A PRICE TO ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 31 - : WHICH HE HAS AGREED AT THE TIME OF THE AGREEMENT OF SALE DT. 3RD JUNE, 1992. THAT IS ALSO THE REASON WHY S. 269UD(1) OF THE ACT REQUIRES THE APPROPRIATE AUTHORITY TO PASS AN ORDER WITHIN TWO MONTHS (AFTER AMENDMENT THREE MONTHS) FROM THE END OF THE MONTH, IN WHICH THE STATEMENT OF PARTICULARS ARE SU BMITTED BY THE PARTIES CONCERNED IN THE PRESCRIBED FORM NO. 37-I A S REQUIRED UNDER S. 269UC OF THE ACT R/W R. 48L OF THE IT RULES, 1962. MOREOVER, ON THE MERITS, WE HAVE SHOWN HOW THE LAND RATE OF RS. 225 PER SQ. FT. (OR ITS DISCOUNTED RATE OF RS. 221 PER SQ. FT.) FOR THE SUIT LAND IS NOT GROSSLY UNDERSTATED IN THE SENSE T HAT ITS FAIR MARKET RATE WOULD BE MORE BY 15 PER CENT OR ABOVE A S COMPARED TO THE SAID LAND RATE. THE ABOVE SUBMISSION MADE ON BEHALF OF THE RESPONDENTS CANNOT THUS BE ACCEPTED. 3.2 HONBLE RAJASTHAN HIGH COURT IN THE CASE OF KRISHNAKUMAR RAWAT (SUPRA) OBSERVED /HELD AS UNDER: - THE PETITIONERS HAVE ENTERED INTO AN AGREEMENT TO PURC HASE A PLOT OF 9,500 SQ. YARDS (7,945 SQ. METRE) WITH TWO GODOWNS HAVING AN AREA OF 2,920 SQ. METRES WITH RESPONDENT NO. 3 FOR A CONSIDERATION OF RS. 99,84,500 OUT OF WHICH A SUM O F RS. 40,00,000 WAS PAID BY CHEQUE AND THE POSSESSION OF THE TWO GODOWNS, GUARD-ROOM, OFFICE PREMISES ALONG WITH 1/4 TH UNDIVIDED SHARE OF THE REMAINING OPEN LAND WAS DELIVERED. FRO M NO. 37-I ALONG WITH A COPY OF THE AGREEMENT WAS SUBMITTED UN DER SECTION 269UC ON DECEMBER 31, 1993. THE VALUATION OFFICER O F THE APPROPRIATE AUTHORITY OF THE INCOME-TAX DEPARTMENT, VIDE HIS LETTER DATED JANUARY 18, 1994, INFORMED THE PETITIO NER AND THE SELLER FOR INSPECTION OF THE PROPERTY ON JANUARY 21 , 1994. THE APPROPRIATE AUTHORITY, AFTER RECEIVING THE REPORT F ROM THE VALUATION OFFICER, ISSUED A SHOW-CAUSE NOTICE ON MARCH 8, 199 4, UNDER SECTION 269UD(1A) OF THE ACT ON THE GROUND THAT THE APPARENT CONSIDERATION WAS LOWER FOR VARIOUS REASONS MENTION ED THEREIN AND THE VALUE OF THE LAND IS MUCH HIGHER THAN THE A GREED RATE. AN ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 32 - : EXAMPLE OF A PLOT OF LAND AT A-90, TRIVENI NAGAR, N EAR DURGAPURA STATION, SOLD BY THE JAIPUR DEVELOPMENT AUTHORITY O N NOVEMBER, 7, 1992, AT RS. 1,781 PER. SQ. METRE WAS TAKEN. ADJ USTMENT OF FIVE PER CENT. ON ACCOUNT OF LESS DEVELOPMENT OF THE PLO T AND TEN PER CENT. ON ACCOUNT OF GENERAL CONDITION OF THE PLOT W AS GIVEN AND 12 PER CENT. WAS ADDED ON ACCOUNT OF THE TIME GAP. ON THE BASIS OF THE RATE OF RS. 1,692 PER SQ. METRES, THE VALUE OF THE LAND OF 7,943 SQ. METRES WAS CALCULATED AT RS. 1,34,39,556. THE P ETITIONER WAS ASKED AS TO WHY THE ORDER FOR PER-EMPTIVE PURCHASE UNDER SECTION 269UD BE NOT MADE AND THE CASE WAS FIXED FOR MARCH 21, 1994. OBJECTIONS WERE SUBMITTED BY THE VENDOR AS WELL AS THE PETITIONER THAT 40 PER CENT. OF THE LAND WOULD BE REQUIRED TO BE LEFT FOR AMENITIES LIKE PARKS AND ROADS BESIDES THE COST OF DEVELOPMENT OF ROADS, ELECTRICITY, WATER SUPPLY, ETC. THE SUB-DIVI SION HAS NOT BEEN EFFECTED. IT WAS ALSO STATED THAT THE MARKET PRICE OF THE LAND IN DURGAPURA NOTIFIED BY THE SUB-REGISTRAR AS ON APRIL 1, 1991, FOR THE FIRST CATEGORY HAS BEEN FIXED AT RS. 550 AN THE SECOND CATEGORY AT RS. 450; AND IF 12 PER CENT. IS ADDED, IT WOULD COME TO RS. 690 PER SQ. METRE. THIS IS BESIDES THE VARIOUS OBJECTIONS MENTIONED ABOVE AND ALSO THE FACT THAT THE COST OF DEMOLITION AND REMOVAL OF DEBRIS WOULD BE SUBSTANTIAL AND THE COST OF INVESTMENT FOR SIX MONTHS HAS TO BE TAKEN INTO CONSIDERATION. AN EXAMPLE IN THE REPRESENTATION DATED MARCH 24, 1994, WAS GIVEN OF A PLOT OF 116.13 SQ. METRES SOLD AT RS. 861.10 PER SQ. METER SITUATED IN TRIVENI NAGAR SCHEME. THE MARKET RATE FIXED BY THE SUB-REGISTRAR FOR REGISTRATION PURPOSES WAS STATED TO BE RS. 1,04 3.05 PER SQ. METRE. A COPY OF THE OFFICE ORDER DATED NOVEMBER 4, 1992, OF THE JAIPUR DEVELOPMENT AUTHORITY FIXING THE RESERVE PRI CE AT RS. 600 PER SQ. METRE WAS POINTED OUT. THE APPROPRIATE AUTH ORITY PASSED THE ORDER UNDER SECTION 269UD(1) AND EXERCISING THE POWERS VESTED IN IT ORDERED PURCHASE OF THE PROPERTY BY TH E CENTRAL GOVERNMENT AT AN AMOUNT EQUAL TO THE APPARENT CONSI DERATION SHOWN IN THE AGREEMENT. THE APPROPRIATE AUTHORITY D IRECTED DELIVERY OF POSSESSION OF THE SAID PROPERTY TO THE DEPARTMENTAL VALUATION OFFICER OF THE INCOME-TAX DEPARTMENT WHER EUPON THE PETITIONER APPLIED FOR TIME. ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 33 - : THE SUBMISSION OF LEARNED COUNSEL FOR THE PETITIONE R IS THAT THE TOTAL LAND IS 17 BIGHAS 12 BISWAS HAVING KHASRA NO. 126 OWNED BY THE PARTNERSHIP FIRM, MESSRS. RAJASTHAN INDUSTRIAL COMPANY, WHICH SUBMITTED A PLAIN FOR DEVELOPMENT OF AN AMUSEMENT P ARK, COMMERCIAL COMPLEX AND RESIDENTIAL COLONY. THE JAIP UR DEVELOPMENT AUTHORITY APPROVED THE PLAIN FOR THE CO MMERCIAL COMPLEX AND AMUSEMENT PARK. THE PARTNERSHIP WAS DIS SOLVED AND, AS SUCH, THE SINGLE INTEGRATED COMPLEX FOR WHICH TH E PLANS WERE APPROVED COULD NOT BE ACTED UPON. ACCORDING TO THE SUBMISSION OF LEARNED COUNSEL FOR THE PETITIONER, OUT OF THE TOTA L AREA OF 7,943.48 SQ. METRES ONLY 1,087.74 SQ. METRES IS CAPABLE OF B EING DEVELOPED COMMERCIALLY AND THE SALEABLE ARE COMES TO 13.693 P ER 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 CONSIDERAT ION, THEN IT SHOULD BE ON THE BASIS OF THE RATE CHARGED BY THE RIICO FO R INDUSTRIAL LAND WHICH IS RS. 100 PER SQ. METRE FOR FULLY DEVEL OPED 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 AC COUNT OF THE FACILITIES HAVE TO BE TAKEN INTO CONSIDERATION BESI DES THE FACT THAT IT WOULD TAKE AROUND 12 MONTHS TO DEVELOP THE PROPE RTY OVER WHICH AT LEAST RS. 18 LAKHS WOULD HAVE TO BE DEDUCT ED ON ACCOUNT INTEREST ALONE. POSSESSION HAS BEEN TAKEN ONLY OF L AND COVERED UNDER GODOWNS AND THE OPEN AREA IS SAID TO BE UNDER THE CO- OWNERSHIP OF SMT. KRISHNA KUMARI. THE FINAL AGREEME NT WITH THE CO-OWNER HAS NOT BEEN ARRIVED AS YET, AND THERE CAN BE A CHANGE OF SITE ALSO. NO NOTICE WAS ISSUED FOR TREATING THE PROPERTY AS A COMMERCIAL PROPERTY. THE VALUE OF THE GODOWN WAS AL SO NOT MENTIONED IN THE NOTICE ISSUED. THE GRIEVANCE OF THE PETITIONER IS ALSO THAT THEY W ERE GIVEN ONLY TEN DAYS TIME FOR FILING THE REPLY AND THUS THE PRI NCIPLES OF NATURAL JUSTICE HAVE BEEN VIOLATED. A REASONABLE OPPORTUNIT Y AS DIRECTED BY THE APEX COURT HAS ALSO NOT BEEN GIVEN. THE NOTI CE WAS ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 34 - : RECEIVED ON MARCH 11, 1994, AND THERE WAS A STRIKE BY GOVERNMENT STAFF FROM MARCH 16, 1994, TO APRIL 3 19 94, AND THEREFORE, THE COPIES OF SIMILAR SALE TRANSACTIONS COULD NOT BE OBTAINED. THE ACTION OF THE APPROPRIATE AUTHORITY H AS BEEN CHALLENGED ON THE GROUND THAT THERE WAS NO MATERIAL AVAILABLE WITH THE DEPARTMENT TO THE EFFECT THAT THERE WAS AN Y EVASION OF TAX IN THE TRANSACTION. NOTICE TO THE CO-OWNERS WHO ARE INTERESTED PERSONS WAS NOT ISSUED. THE GOODS WERE SHIFTED TO T HE GODOWN IN SEVERAL MONTHS AND IT WILL TAKE A FEW MONTHS NOW TO VACATE IT. THE APPARENT CONSIDERATION SHOWN IS NOT LESS THAN APPAR ENT CONSIDERATION IF 15 PER CENT. IS ADDED THEREON. THE ORDERS HAVE BEEN PASSED ON GROUNDS DIFFERENT THAN THOSE FOR WHI CH THE NOTICE WAS ISSUED. THE COPY OF THE VALUATION REPORT WAS NO T SUPPLIED. THE COMPARISON WITH THE LAND SITUATED AT TRIVENI NA GAR WHICH IS FULLY DEVELOPED HAS WRONGLY BEEN MADE. THE VALUE OF THE STRUCTURE SHOULD HAVE BEEN TAKEN AS NIL. WHILE VALUING THE GO DOWN INCORRECT FACTS WITH REGARD TO THE TUBULAR TRUSSES, A. C. SHE ET ROOFING HAVING CC FLOOR, ELECTRIC INSTALLATIONS, IRON ETC., HAVE B EEN TAKEN AND IT HAS WRONGLY BEEN MENTIONED THAT COMMERCIAL USE OF THE P ROPERTY HAS BEEN ALLOWED BY THE DISTRICT MAGISTRATE AND THE JAI PUR DEVELOPMENT AUTHORITY. THE PROPER NORMS FOR VALUATI ON OF THE PROPERTY HAVE BEEN NOT BEEN ADOPTED. A SINGLE INSTA NCE CANNOT BE THE BASIS FOR VALUATION OF THE PROPERTY. THE PROPER TY IS NEAR THE VEGETABLE FACTORY WHICH IS EMITTING A FOUL SMELL AN D INCAPABLE OF DEVELOPING INTO A RESIDENTIAL COLONY. THE INSTANCE OF SALE OF PLOT GIVEN BY THE PETITIONER HAS WRONGLY BEEN IGNORED. T HE SALABLE AREA IS ONLY 66 PER CENT. OF THE TOTAL AREA AND THE CALC ULATION SHOULD HAVE BEEN MADE ON THAT BASIS. IT IS SUBMITTED THAT THE MARKET RATE NOTIFIED BY TH E SUB-REGISTRAR UNDER THE PROVISIONS OF THE RAJASTHAN 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 O N 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 ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 35 - : 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 DEV ELOPMENT AUTHORITY, FOR COMMERCIAL USE TO THE EXTENT OF 1,08 7 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 COU NSEL FOR THE PETITIONER. THE OBJECTION WHICH HAS BEEN TAKEN BY L EARNED COUNSEL FOR THE RESPONDENTS IS THAT THE WRIT PETITION IS NO T MAINTAINABLE AS THE PETITIONER AND THE VENDOR HAVE CONTRAVENED THE PROVISION OF THE ACT BY TRANSFERRING THE PROPERTY BEFORE ANY PER MISSION COULD HAVE BEEN GIVEN BY THE APPROPRIATE AUTHORITY AND FO R WHICH RELIANCE HAS BEEN PLACED ON THE DECISION GIVEN BY A DIVISION BENCH OF THIS COURT IN THE CASE OF RAJASTHAN PATRIKA LTD. V. UNION OF INDIA [1995] 213 ITR 443 (D.B. CIVIL WRIT PETITION NO. 3 426 OF 1991) DECIDED ON APRIL 22, 1994. IT IS OBSERVED THA T SO FAR AS THE PRELIMINARY OBJECTION IS CONCERNED, THE RESPONDENTS ARE TO BLAME THEMSELVES. BY NONE OF THE ORDERS OF THE COURT, WER E THE RESPONDENTS RESTRAINED FROM TAKING ANY ACTION IF TH EY WERE LEGALLY ENTITLED. THE DECISION RELIED ON BY LEARNED COUNSEL IS NOT ON THE PROPOSITION THAT IN SUCH A SITUATION, THE WRIT PETI TION IS NOT MAINTAINABLE. IN THAT CASE, THE ORDER PASSED BY THE APPROPRIATE AUTHORITY WAS NOT UNDER CHALLENGE, BY IT WAS THE PR OSECUTION OF THE PETITIONER IN WHICH THE COURT REFUSED TO INTERF ERE. THE WRIT PETITION AGAINST THE ORDER PASSED BY THE APPROPRIAT E AUTHORITY IS MAINTAINABLE AND, THEREFORE, THE PRELIMINARY OBJECT ION HAVING NO FORCE IS REJECTED. IN THE AGREEMENT DATED DECEMBER 31, 1993, THE SALE PRICE OF THE LAND HAS BEEN MENTIONED AS RS. 1,051 PER SQ. YARD. POSSESSION OF ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 36 - : THE TWO GODOWNS HAVING NOS. 13 AND 14, GUARD-ROOM, OFFICE PREMISES AND SYMBOLIC POSSESSION OF 1/4TH UNDIVIDED SHARE OF THE OPEN LAND WAS TAKEN BY THE PETITIONER. IN CLAUSE 12 OF THE AGREEMENT, IT WAS MENTIONED THAT THE SAID LAND IS A PPROVED AND COVERED FOR THE PURPOSE OF CONSTRUCTION OF COMMERCI AL AND RESIDENTIAL UNITS BY THE JAIPUR DEVELOPMENT AUTHORI TY AND THE DUES FOR CONVERSION HAVE BEEN DEPOSITED. IF THERE IS ANY LIABILITY IN FUTURE IN RESPECT OF SUCH CONVERSION CHARGES, THE V ENDOR HAS TO BEAR IT. THE SHOW-CAUSE NOTICE WHICH WAS ISSUED BY THE APPROPRIATE AUTHORITY ON MARCH 8, 1994, HAS MENTION ED THAT THE LAND RATE HAS BEEN SHOWN AT RS. 1,051 PER SQ. YARD IN THE AGREEMENT, WHEREAS THE JAIPUR DEVELOPMENT AUTHORITY HAS SHOWN THE LAND AT RS. 1,781 PER SQ. METRE ON NOVEMBER 7, 1992. CERTAIN ADDITIONS AND DEDUCTIONS WERE MADE AND THE TOTAL CO ST ARRIVED AT WAS RS. 1,34,39,556 AT RS. 1,692 PER SQ. METRE. THI S WAS BESIDES THE COST OF THE EXISTING GODOWNS WHICH WERE MENTION ED TO HAVE COMMERCIAL POTENTIAL. IN THE REPLY, THE VENDOR HAS ONLY STATED THAT FULL CONSIDERATION HAS BEEN SHOWN AND THE DEVELOPME NT 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 AG ENCIES. THE PETITIONER HAS ALSO SUBMITTED OBJECTIONS TO THE PRO POSED NOTICE AS STATED ABOVE. A CERTIFICATE OF SALE OF LAND IN TRIV ENI NAGAR AT RS. 1,300 PER SQ. METRE OF JULY, 1993, WAS ALSO SUBMITT ED. 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 CONTENTIO NS RAISED THEREIN WERE ALSO TAKEN INTO CONSIDERATION. THE CASE WAS AD JOURNED ON THE REQUEST OF THE PARTIES FROM MARCH 21, 1994, TO MARCH 24, 1994. THE OPPORTUNITY WHICH HAS BEEN GIVEN IN THE P RESENT CASE CANNOT BE SAID TO BE NOT A REASONABLE ONE. ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 37 - : THE APPROPRIATE AUTHORITY HAS ALSO TAKEN INTO CONSI DERATION THE FACT THAT THE TRANSFEROR HAS ASSURED THE PURCHASER THAT THE PROPERTY SOLD IS FREE FROM ALL ENCUMBRANCES AND THE RESPONSIBILITY TO GET THE LAND PARTITIONED WAS ALSO UNDERTAKEN; TH E FACT OF CONVERSION WAS ALSO STATED. THERE ARE RESIDENTIAL C OLONIES ADJOINING THE PRESENT LAND. AS PER COST OF CONSTRUC TION ON THE BASIS OF NORMS APPLICABLE IN THE CASE OF CPWD STRUCTURES THE VALUE OF GODOWN WAS ESTIMATED AT RS. 42 LAKHS. THE SUBMISSIO N OF LEARNED COUNSEL FOR THE PETITIONER IS THAT THE FACT THAT TH E FUTURE OF RS. 42 LAKHS WAS NOT MENTIONED IN THE NOTICE DOES NOT VITI ATE THE ORDER BECAUSE, EVEN THE COST OF LAND ITSELF WAS CONSIDERE D AS MORE THAN THE APPARENT CONSIDERATION SHOWN IN THE AGREEMENT A ND THE FACT THAT THE COST OF THE GODOWN HAS TO BE SEPARATELY CO NSIDERED WAS ALSO MENTIONED IN THE NOTICE. THE CONTENTION OF LEA RNED COUNSEL FOR THE PETITIONER THAT THE COST OF REMOVAL OF THE DEBRIS WILL BE MORE THAN THE COST OF THE STRUCTURE WAS REJECTED. T HIS CONCLUSION OF THE APPROPRIATE AUTHORITY IS ALSO CORRECT AS THE PETITIONER HAS HIMSELF STATED IN THE PETITION THAT THE GODOWNS ARE BEING USED FOR STORING GOODS AND IS USED FOR BUSINESS PURPOSES, AN D, THEREFORE, THERE IS NO NECESSITY FOR DEMOLISHING THEM. THE VAL UE OF THE GODOWN WAS TAKEN AT RS. 42 LAKHS AND THE VALUE OF T HE LAND WAS ESTIMATED AT RS. 1,37,21,532, AT 1,727 PER SQ. METR E. THE TOTAL VALUE HAS BEEN TAKEN AT RS. 1,79,21,532 AS AGAINST RS. 99,84,500. THE CONTENTION OF THE PETITIONER WITH REGARD TO THE DEDUCTION OF 40 PER CENT. FOR ROADS AND PARK, ETC., WAS NOT ACCEPTE D AND FOR THE SAKE OF THE ARGUMENT, IT WAS CONSIDERED THAT IF THE SALABLE AREA AS PER RULE 11 OF THE RAJASTHAN URBAN AREAS (SUB-DIVIS ION) RULES, 1975, IS TAKEN TO BE 66 PER CENT., THEN IT WILL COM E TO 5,242.38 SQ. METERS TO WHICH IF THE SALE INSTANCE WAS TAKEN INTO CONSIDERATION OF RS. 1,718 PER SQ. METRE ON WHICH 12 PER CENT. FO R THE TIME-GAP IS ADDED, IT WILL COME TO RS. 1,994.72 PER SQ. METR E. EVEN ON THAT BASIS, THE VALUE COMES TO RS. 1,04,58,548 AND RS. 4 2 LAKHS FOR THE BUILDING WHICH IS MUCH MORE THEN THE DECLARED APPAR ENT CONSIDERATION. IT WAS ALSO FOUND THAT THE AREA OF T RIVENI NAGAR IS ON THE INTERIOR SIDE OF THE MAIN TANKROAD, WHEREAS THE PRESENT LAND IS HAVING A BETTER SITUATION. THE PROPERTY BEI NG COMMERCIAL ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 38 - : HAS ABOUT 50 PER CENT. MORE VALUE, WHICH WAS NOT AD DED FOR COMPUTATION PURPOSE. THE DECISION OF THE ALLAHABAD HIGH COURT IN THE CASE OF DAYA ENGG. WORKS (P.) LTD. V. UNION OF INDIA (C.W.P. NO . 4240 OF 1993) DECIDED ON JULY 15, 1993, WAS ALSO RELIED ON FOR THE POINT THAT THE RATE DETERMINED UNDER THE STAMP RULES CANNOT BE DETERMINATIVE OF THE ACTUAL VALUE OF THE PROPERT Y. THE CLAIM OF RS. 10 LAKHS AS REGISTRATION CHARGES AND RS. 15 LAK HS 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 FO R THE PETITIONER THAT, ON ACCOUNT OF DISSOLUTION OF THE FIRM, THE PA RK PROJECT COULD NOT BE IMPLEMENTED, SMT. MITHILESH KUMARI SOLD HER SHARE. THERE IS NO RESTRICTION IN RESPECT OF SALE OF THE PROPERT Y WHICH IS PRIVATELY SUB-DIVIDED BY DIFFERENT OWNERS. EVEN THE CONTENTIO N 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 BU T 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 MU CH CONVERSION CHARGES HAVE BEEN PAID BUT, IT IS THE RESPONSIBILIT Y OF THE VENDOR THAT, IF THE CONVERSION CHARGES ARE FOUND TO HAVE B EEN NOT PAID SHE HAS TO BEAR THE SAME. A NOTICE WAS GIVEN TO THE JAIPUR DEVELOPMENT AUTHORITY IN ORDER TO FIND OUT AS TO WH ETHER THE PLAN WHICH WAS EARLIER APPROVED IS THE FINAL PLAN OR THE Y HAVE THE POWER TO REVISE THE PLAN ONCE APPROVED. IT IS STATE D BY MR. R. D. RASTOGI ON BEHALF OF THE JAIPUR DEVELOPMENT AUTHORI TY THAT EVEN IF A PLAN IS APPROVED, THE JAIPUR DEVELOPMENT AUTHORIT Y HAS THE JURISDICTION TO REVISE THE SAID PLAN. THE PROPERTY WHICH HAS BEEN DIRECTED TO BE PURCHASED BY THE APPROPRIATE AUTHORI TY IS ON THE BASIS OF THE AGREEMENT ENTERED INTO AND ON THE SAME TERMS AND CONDITIONS. THE DISPUTE WITH REGARD TO THE POSSIBIL ITY OF A DIFFERENT ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 39 - : AREA OF LAND OR THE OTHER QUESTIONS WHICH HAVE BEEN RAISED BY LEARNED COUNSEL DO NOT REQUIRE TO BE GONE INTO. THE PRINCIPLES FOR VALUATION IN RESPECT OF AN IMMOV ABLE PROPERTY UNDER THE WEALTH-TAX ACT OR OTHER TAXATION LAWS ARE DIFFERENT FROM THE PRINCIPLES WHICH ARE APPLICABLE TO ACQUISITION PROCEEDINGS. THE PROCEEDINGS UNDER CHAPTER XX-C ARE AKIN TO THE ACQU ISITION PROCEEDINGS AND NOT TO THE VALUATION PRINCIPLES WHI CH ARE APPLICABLE FOR ASSESSING THE TAX ON THE BASIS OF TH E VALUATION OF THE PROPERTY. THE VALUATION HAS NO DOUBT TO BE MADE OBJECTIVELY A ND NOT ON THE SUBJECTIVE SATISFACTION OF THE APPROPRIATE AUTHORIT Y. THE FIGURE WHICH IS ARRIVED AT HAS TO BE BASED ON THE MATERIAL ON RECORD. THERE MAY BE A CERTAIN ELEMENT OF ARBITRARINESS WHI LE ESTIMATING THE MARKET VALUE AND IT IS FOR THAT REASON ALONE, T HAT WITHOUT THERE BEING ANY MANDATE OF THE ACT, THE RESPONDENTS HAVE ISSUED A CIRCULAR THAT THE ACQUISITION OF THE PROPERTY UNDER CHAPTER XX-C WOULD BE IF THE DIFFERENCE OF THE MARKET VALUE AND AGREED VALUE SHOWN IN THE INSTRUMENT IS MORE THAN 15 PER CENT. T HUS, THE 15 PER CENT. MARGIN COVERS THE ESTIMATION PART OF THE VALUATION, SO THAT NO INJUSTICE IS DONE WHILE ACQUIRING ANY PROPE RTY. THE RIGHT OF PRE-EMPTIVE PURCHASE BY THE CENTRAL GOVERNMENT OF I MMOVABLE PROPERTY IS AT AN AMOUNT EQUAL TO THE AMOUNT OF APP ARENT CONSIDERATION SO AS TO RELIEVE THE TRANSFEROR OF AN Y GRIEVANCE. THE ORDER UNDER SECTION 269UD HAS TO BE PASSED IN A TIME-BOUND PROGRAMME. THE APPROPRIATE AUTHORITY CONSISTS OF TH REE PERSONS; TWO OF WHOM ARE TO BE MEMBERS OF THE INDIAN INCOME- TAX SERVICES GROUP A HOLDING THE POST OF THE COMMISSION ER OF INCOME- TAX OR, ANY EQUIVALENT OR HIGHER POST AND, ONE HAS TO BE A MEMBER OF THE CENTRAL ENGINEERING SERVICES GROUP A HOLDING THE POST OF THE CHIEF ENGINEER OR, ANY EQUIVALENT OR HIGHER POS T. THE TRANSFEROR AND TRANSFEREE ARE TO BE GIVEN THE OPPOR TUNITY AND A REASONED ORDER HAS TO BE PASSED. THE RESPONDENTS HA VE TO MAKE THE VALUATION OF THE PROPERTY BY TAKING INTO CONSID ERATION ALL ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 40 - : RELEVANT FACTS AND THEREAFTER A DECISION HAS TO BE TAKEN BY THE APPROPRIATE AUTHORITY. VISCOUNT SIMON J., IN GOLD C OAST SELECTION TRUST LTD. V. HUMPHREY [1949] 17 ITR (SUPPL) 19 (HL ) OBSERVED THAT, 'VALUATION IS AN ART, NOT AN EXACT SCIENCE, M ATHEMATICAL 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 V ARIOUS FACTORS ARE THERE ON THE BASIS OF WHICH OUT OF THE VARIOUS METHODS BY WHICH THE VALUATION OF THE IMMOVABLE PROPERTY CAN B E 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 VALUA TION, THEREFORE, HAS TO BE DONE BY A METHOD WHICH IS MORE OBJECTIVE AND COULD FURNISH RELIABLE DATA TO ARRIVE AT A JUST CONCLUSIO N. IN RESPECT OF LAND, COMPARABLE CASES PROVIDE THE BE TTER GUIDE. THE COMPARABLE CASES COULD BE WHICH ARE IN RESPECT OF T HE LAND HAVING SIMILAR CHARACTER AND IS IN THE PROXIMITY OF THE LA ND UNDER AGREEMENT HAVING SIMILAR ADVANTAGES AND AMENITIES. THE PROXIMITY IN TIME IS ALSO AN IMPORTANT FACTOR IN SU CH A CASE. THE LOCATION, FRONTAGE, TRANSPORT FACILITIES AND OTHER AMENITIES BESIDES THE SIZE OF THE PLOT ARE RELEVANT CONSIDERATIONS. T HE METHOD OF BELTING IS ALSO APPLIED IN RESPECT OF AND HAVING A LARGE AREA AS THE FRONT OF THE LAND ON THE MAIN SIDE FETCHES A HIGHER PRICE THAN THE NEXT BELT AND SO ON. IN THIS METHOD, THE PLOT IS DI VIDED INTO BELTS ON THE BASIS OF DISTANCE FROM THE MAIN ROAD AND THE VALUE OF SUCH BELTS HAS TO BE DETERMINED SEPARATELY. IN RAGHUBANS NARAIN SINGH V. U. P. GOVT., AIR 1967 SC 465, IT WAS OBSERVED BY THE APEX COURT THAT THE VALUE TO BE ASCERTAINED IS THE PRICE TO BE PAID FOR THE LAND WITH ALL ITS POTE NTIALITIES AND WITH ALL THE USE THAT CAN BE MADE OF IT BY THE VENDOR. S IMILARLY, IN U. P. GOVT. V. H. S. GUPTA , AIR 1957 SC 202, THE MARKET PRICE WAS CONSIDERED THE HIGHEST VALUE THE PROPERTY COULD FET CH WHEN LAID ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 41 - : OUT IN THE MOST ADVANTAGEOUS MANNER. THE POTENTIALI TIES OR THE CAPACITY TO USE THEREFORE IS ALSO AN ANOTHER RELEVA NT FACTOR. THE INSTANCES OF COMPARABLE CASES WHICH ARE TAKEN INTO CONSIDERATION MUST BE OF GENUINE CASES. THERE MAY BE DIFFERENT METHODS FOR VALUATION OF THE PROPERTY, I.E., LAND AND BUILDING, WHICH DEPENDS ON MULTIPLICITY OF SITUATIONS AND ONE OF SUCH PRINCIPLES IS COMPARABLE TRANSACTION WH ICH IS MAINLY APPLICABLE TO VALUATION OF LAND ONLY, THE OTHERS US E : (I) RETURN BASIS : UNDER THIS SYSTEM THE VALUE IS DETERMINED ON THE BA SIS OF THE AMOUNT OF RENT WHICH A TENANT IS READY TO PAY AND T HAT RENT IS CONSIDERED A RETURN ON THE INVESTMENT OF CAPITAL WH ICH IS APPLICABLE ON THE PROPERTIES WHICH ARE ON LEASE/REN T/EASEMENT. (II) DIRECT CAPITAL COMPARISON : THIS METHOD IS RARELY APPLIED FOR VALUING THE PROPE RTY, AS UNDER THIS METHOD THE TWO OBJECTS, NAMELY, THE PROPERTY A ND OTHER SIMILAR OBJECT LIKE SHARES, ETC., ARE TAKEN INTO CO NSIDERATION AND THE PRICE WHICH COULD BE OBTAINED THEREFOR IS TAKEN INTO CONSIDERATION. THE IDENTIFICATION OF THE OBJECT ITS ELF IS PROBLEMATIC AND THE PROPERTY IS RARELY IDENTICAL WITH OTHER OBJ ECT AND, THEREFORE, THIS METHOD IS RARELY USED. (III) RESIDUAL METHOD : UNDER THIS METHOD, THE VALUATION OF LANDS OR BUILDI NGS IS TAKEN IF THEY ARE DEVELOPED OR REDEVELOPED. IT IS ON THE BAS IS 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 P ROPERTY WHICH IS DEVELOPED IN A SIMILAR MANNER IS TAKEN INTO CONSIDE RATION. THIS METHOD IS ALSO KNOWN AS THE DEVELOPMENT METHOD OF V ALUATION. THE METHOD IS APPLIED MAINLY IN RESPECT OF OLD BUIL DINGS WHICH ARE DEMOLISHED AND NEW CONSTRUCTION IS RAISED THEREON. (IV) PROFIT BASIS : ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 42 - : WHERE THE COMPARISON OF ONE WITH ANOTHER IS DIFFERE NT SINCE EACH PROPERTY IS SUSCEPTIBLE TO DIFFERENT FACTORS WHICH MAY HAVE A DRAMATIC EFFECT ON THE FIGURE OF SALE ACHIEVED. EVE N IN THE SAME MARKET, THE VALUE OF SHOPS MAY DIFFER ON ACCOUNT OF LOCATION. THE PROFIT WHICH IS DERIVED ON ACCOUNT OF SITUATION, LO CATION OR SPECIAL CIRCUMSTANCES OF THE PROPERTY IS TAKEN AS BASIS FOR VALUING THE PROPERTY. IT IS CONSIDERED APPROPRIATE IN RESPECT O F HOTELS, CINEMAS, SHOPS, PETROL PUMPS AND OTHER COMMERCIAL P ROPERTIES. (V) COST OF REPLACEMENT : THIS METHOD IS APPLICABLE IN RESPECT OF PROPERTY WH ICH IS TO BE DESIGNED OR USED FOR A SPECIAL PURPOSE TO MEET SPEC IFIC REQUIREMENT AND THE VALUATION OF SUCH PROPERTY IS D ERIVED FROM THE VALUE OF ALTERNATIVE SITES PLUS COST OF BUILDING. T HE PROPERTY IN SUCH CASES HAVE NO SALE INSTANCES IN THE MARKET AND THUS NO COMPARABLE CASES COULD BE FOUND. THE PRICE OF AN AL TERNATIVE SITE AND COST OF ERECTION OF THE BUILDING IS TAKEN INTO CONSIDERATION. THIS COST OF REPLACEMENT IS ALSO REFERRED AS CONTRA CTORS METHOD. (VI) BREAK-UP METHOD : THE BREAK-UP METHOD OR ASSET BREAKING METHOD IS ADO PTED FOR LOSS INCURRING CONCERNS WHICH HAVE NO CHANCE OF REVIVAL. (VII) MUNICIPAL VALUATION : UNDER THIS SYSTEM TAXES WHICH ARE CALCULATED BY MUN ICIPAL AUTHORITIES AS A PERCENTAGE OF RENT REALISED OR REA LISABLE ARE TAKEN INTO CONSIDERATION AND ON THAT BASIS THE ANNUAL VAL UE OF THE PROPERTY IS DETERMINED. (VIII) LAND AND BUILDING METHOD : UNDER THIS METHOD, THE VALUATION OF THE LAND IS DON E SEPARATELY ON THE BASIS OF COMPARABLE INSTANCES OF SALE OF OTHER PLOTS AND THE COST OF CONSTRUCTION AS PREVAILING IS TAKEN FROM WH ICH THE DEPRECIATION LOOKING TO THE YEAR OF CONSTRUCTION IS REDUCED. THIS METHOD IS NORMALLY APPLIED IN CASES OF COMPULSORY A CQUISITION. THE OBJECTION THAT SOLITARY INSTANCE RATE CANNOT BE ADOPTED FOR THE PURPOSE OF COMPARISON CANNOT BE CONSIDERED TO BE AN ABSOLUTE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 43 - : PROPOSITION OF LAW. IT DEPENDS ON THE FACTS AND CIR CUMSTANCES OF THE CASE AND EVEN WHERE THERE IS NO OTHER COMPARABL E CASE AVAILABLE A SINGLE SOLITARY INSTANCE CAN BE TAKEN I NTO CONSIDERATION. THE OBJECTION THAT THE LAND SHOULD BE CONSIDERED TO BE AGRICULTURAL LAND OR THAT THE RATE OF INDUSTRIAL LAND SHOULD BE MADE APPLICABLE OR THAT SINCE THE VALUE OF THE BUILDING HAS BEEN TA KEN THEN THE COST OF LAND SHOULD BE TAKEN AS NIL CANNOT BE ACCEP TED, AS FACTUALLY IT COULD NEITHER BE CONSIDERED AS AGRICULTURAL LAND NOR A INDUSTRIAL LAND AND THE POTENTIALITY OF THE LAND HAS TO BE TAK EN INTO CONSIDERATION AS OBSERVED BY THE APEX COURT IN THE CASE OF RAGHUBANS NARAIN SINGHS CASE, AIR 1967 SC 465. THE VARIOUS PROPOSITIONS WITH REGARD TO THE COSTING OF LAND OR RESTRICTING THE SALEABLE AREA ON THE BASIS OF THE A LREADY APPROVED MAP CAN ALSO NOT BE TAKEN INTO CONSIDERATION AS IN ACCORDANCE WITH THE APPROVED MAP THE SELLER HAS NOT TAKEN ANY ACTION AND LEARNED COUNSEL FOR THE JAIPUR DEVELOPMENT AUTHORIT Y 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 CONCERN ED, IT IS NOT PROVED BY ANY EVIDENCE ON RECORD THAT THE VALUATION HAS INCORRECTLY BEEN ARRIVED AT. THE ONLY THING WHICH H AS BEEN SAID IS THAT THE VALUATION WAS NOT DEPICTED IN THE NOTICE S O THAT THE PETITIONERS COULD HAVE SUBMITTED THEIR REPLY. EVEN IF FOR THE SAKE OF ARGUMENT, THE CONTENTION IS ACCEPTED, NOTHING IS ST ATED BY THE PETITIONER IN THE PETITION ITSELF AS TO HOW THE VAL UATION HAS NOT CORRECTLY BEEN ARRIVED AT OR THERE IS ANY MISTAKE A PPARENT, SO THAT THE ORDER OF VALUING THE COST OF BUILT-UP AREA AT R S. 42 LAKHS WOULD BE CONSIDERED TO BE ILLEGAL OR A MISTAKE APPARENT F ROM RECORD OR AN ARBITRARY FIGURE. THE CONTENTION OF THE PETITION ER THAT THE SAID GODOWN IS TO BE DEMOLISHED IS CONTRARY TO HIS OWN A VERMENT IN THE PETITION THAT THE GODOWNS ARE USED FOR STORING THE GOODS AND IT WILL TAKE A NUMBER OF MONTHS IN TRANSPORTING THE GOODS A ND THAT THE PETITIONER IS CARRYING ON HIS BUSINESS THERE, WHICH IS NEAR TO THE AIRPORT AS WELL. IN AN AREA WHICH IS ALREADY CONSTR UCTED LONG-BACK AND THE BUSINESS IS BEING CARRIED ON NEITHER THERE IS ANY POSSIBILITY ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 44 - : OF ANY AUTHORITY DEMOLISHING THE STRUCTURE OR RESTR AINING THE PURCHASER FROM CARRYING ON THE ACTIVITIES. THE CONT ENTION THAT THE BUILDING IS TO BE DEMOLISHED CANNOT BE TAKEN INTO C ONSIDERATION AT THIS STAGE, EVEN IF THE CONSTRUCTION IS FINALLY DEM OLISHED AFTER A NUMBER OF YEARS. THE VALUATION WHICH HAS BEEN ARRIV ED AT BY THE APPROPRIATE AUTHORITY OF THE CONSTRUCTED AREA, THER EFORE, CANNOT BE SAID TO BE UNREASONABLE OR REQUIRING ANY INTERFEREN CE BY THIS COURT AS THERE IS NO EVIDENCE ON RECORD BY WHICH IT COULD BE CONCLUDED THAT THE PETITIONER HAS NO INTENTION TO CARRY ON TH E BUSINESS IN THE SAID PREMISES WHERE IT IS BEING CARRIED ON BY HIM U NDER THE AGREEMENT. THE METHOD OF VALUATION OF THE GODOWN HA S RIGHTLY BEEN TAKEN ON THE BASIS OF LAND AND BUILDING METHOD . IN CWT V. MRS. SARA VARGHESE [1991] 187 ITR 450, TH E KERALA HIGH COURT HAS OBSERVED THAT FOR VALUATION A HYPOTH ETICAL MARKET IS CONTEMPLATED. IMPONDERABLES ARE INVOLVED IN THE MATTER OF VALUATION. THE MARKET VALUE OF THE PROPERTY IS THE PRICE WHICH A WILLING BUYER WILL PAY TO A WILLING SELLER. IT WILL VARY FROM CASE TO CASE. VALUATION IS NOT AN EXACT SCIENCE. MATHEMATIC AL CALCULATION IS NOT POSSIBLE. THE MONEY VALUE ATTRIBUTABLE TO THE A SSET SHOULD BE DECIDED AND ESTIMATED BY THE CONCERNED STATUTORY AU THORITY IN A REASONABLE AND JUDICIAL MANNER ON THE BASIS OF THE FACTS AND CIRCUMSTANCES AVAILABLE. THE VALUATION SHOULD BE MA DE OBJECTIVELY AND SHOULD BE BASED ON SOME MATERIAL. THE QUALITATI VE AND QUANTITATIVE ANALYSIS IN THE MATTER OF VALUATION WI LL DIFFER FROM ASSET TO ASSET, FROM PLACE TO PLACE, AND ALSO CONSI DERING THE PARTICULAR STATUTE FOR WHICH THE VALUATION AND PRIC E OF THE PROPERTY HAVE TO BE DETERMINED. IT COULD BE A WOODEN RULE. D IFFERENT METHODS AND APPROACHES, NECESSARY IN THE CONTEXT OF DIFFERENT STATUTES UNDER WHICH THE MARKET VALUE OF AN ASSET H AS GOT TO BE DETERMINED, POSE DIFFICULT PROBLEMS. THE MARKET VAL UE HAS GOT TO BE FIXED WITH REFERENCE TO THE PARTICULAR STATUTE. THE APPROACH WILL DIFFER, ACCORDING TO THE NATURE OF THE STATUTE, BET WEEN FISCAL STATUTES OR NON-FISCAL STATUTES. AMONG THE NON-FISC AL STATUTES, THE LAND ACQUISITION ACT IS AN IMPORTANT LEGISLATION. AMONG THE FISCAL STATUTES, THE INCOME-TAX ACT , THE WEALTH-TAX ACT , THE GIFT-TAX ACT , THE MUNICIPALITIES ACT , ETC., ARE IMPORTANT. IN FIXING THE MARKET ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 45 - : VALUE OF A PARTICULAR ASSET OR PROPERTY, THE APPROA CH AND ANALYSIS ARE LIKELY TO VARY ACCORDING TO THE SUBJECT-MATTER OF LEGISLATION. THE PRINCIPLES THAT ARE ORDINARILY APPLIED IN THE C ASE OF NON-FISCAL STATUTES LIKE THE LAND ACQUISITION ACT CANNOT BE APPLIED MECHANICALLY TO CASES ARISING UNDER THE FISCAL STAT UTES. 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 CANNO T 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 (CA L), THE FOLLOWING PRINCIPLES WERE LAID DOWN FOR THE VALUATI ON OF IMMOVABLE PROPERTY UNDER THE WEALTH-TAX ACT (AT PAGE 773) : '(I) ATTEMPT MUST BE MADE TO FIND OUT THE PRICE WHI CH THE IMMOVABLE PROPERTY WOULD FETCH ON THE VALUATION DAT E IMAGINING A WILLING BUYER TO PURCHASE THE PROPERTY FROM A WILLI NG 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, CLOTH, ETC. IN ORDER TO ARRIVE AT A VALUATION IN RE SPECT OF THE PROPERTY, THERE MUST NECESSARILY BE CERTAIN ELEMENT OF GUESS. BUT THE GUESS MUST BE BASED ON CERTAIN FACTS AND ACCORD ING TO CERTAIN PRINCIPLES WHICH WOULD BE, IN THE FACTS AND CIRCUMS TANCES OF EACH CASE, AS FAIR AS POSSIBLE TO THE REVENUE AS WELL AS TO THE ASSESSEE IN TRYING TO IMAGINE REASONABLY AND INTELLIGENTLY T HE PRICE WHICH WAS EXPECTED TO BE FETCHED IF IT WAS POSSIBLE TO SE LL THE PROPERTY IN QUESTION ON THE RELEVANT VALUATION DATE. (III) SUCH A DETERMINATION, THEREFORE, INVOLVES ADO PTING CERTAIN METHODS IN DETERMINING THE VALUATION AND THERE ARE DIFFERENT KINDS OF METHODS, AS MENTIONED IN THE CIRCULARS OF THE BO ARD AND THE PRINCIPLES ENUNCIATED IN THE SEVERAL DECISIONS OF T HE COURT AS NOTICED BEFORE. (IV) WHICH ONE OF THE VARIOUS METHODS WOULD BE SUIT ABLE FOR A PARTICULAR CASE MUST DEPEND UPON THE NATURE OF THE PROPERTY, THE LOCATION OF THE PROPERTY, THE PURPOSE FOR WHICH THE PROPERTY IS ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 46 - : USED AND SEVERAL OTHER OBJECTIVE FACTORS, VIZ., THE TIME WHEN THE VALUATION IS MADE, THE PROSPECT OF BUYING AND SELLI NG IN RESPECT OF THE PROPERTY AT THE RELEVANT TIME AND ALSO SPECIAL FEATURES IN RESPECT OF THE PROPERTY, IF THERE BE ANY. TAKING AL L THESE FACTORS INTO CONSIDERATION IT IS, THEREFORE, NECESSARY TO D ETERMINE WHICH ONE OF THE VARIOUS METHODS WILL BE MOST SUITABLE TO REACH AS ACCURATE AS POSSIBLE A GUESS AS TO THE VALUATION ON THE VALUATION DATE. (V) ANOTHER FACTOR THAT HAS TO BE BORNE IN MIND IS THAT SUCH A METHOD SHOULD BE PREFERRED WHICH HAS MORE OBJECTIVE AND RELIABLE DATA TO RELY UPON THAN MERE SUBJECTIVE OPINIONS. FO R INSTANCE, IF THERE ARE MORE OBJECTIVE DATA TO WORK OUT IN RESPEC T OF ONE METHOD MORE RELIABLE THAN ANOTHER, THEN THAT METHOD FOR A PARTICULAR LAND SHOULD BE PREFERRED. IF, HOWEVER, T HERE IS ANY OBJECTIVE AND RELIABLE EVIDENCE OF ANY TRANSACTION OF SALE OF THE LAND OR PROPERTY SIMILAR IN QUALITY OR OF THE SAME TYPE AND IN APPROXIMATELY SAME TIME THEN THAT WOULD, HOWEVER, P ROVIDE MORE RELIABLE METHOD TO FOLLOW.' IN TRIBENI DEVI V. COLLECTOR OF RANCHI , AIR 1972 SC 1417; [1972] 3 SCR 208, IT WAS OBSERVED BY THE APEX COURT THAT (AT PAGE 1419) : 'THE GENERAL PRINCIPLES FOR DETERMINING COMPENSATIO N HAVE BEEN SET OUT IN SECTIONS 23 AND 24 OF THE ACT. THE COMPENSATION PAYABLE TO THE OWNER OF THE LAND IS THE MARKET VALU E WHICH IS DETERMINED BY REFERENCE TO THE PRICE WHICH A SELLER MIGHT REASONABLY EXPECT TO OBTAIN FROM A WILLING PURCHASE R, BUT AS THIS MAY NOT BE POSSIBLE TO ASCERTAIN WITH ANY AMOUNT OF PRECISION, THE AUTHORITY CHARGED WITH THE DUTY TO WARD COMPENSATIO N IS BOUND TO MAKE AN ESTIMATE JUDGED BY AN OBJECTIVE STANDARD. T HE 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 ACC OUNT. 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, H OWEVER, IS NOT THE ONLY METHOD. THE RENT WHICH AN OWNER WAS AC TUALLY ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 47 - : RECEIVING AT THE RELEVANT POINT OF TIME OR THE RENT WHICH THE NEIGHBOURING LANDS OF SIMILAR NATURE ARE FETCHING C AN BE TAKEN INTO ACCOUNT BY CAPITALISING THE RENT WHICH, ACCORDING T O 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 VALUATION TO BE ADOPTED IN ASCERTAINING THE MARKET VALUE OF T HE LAND ON THE DATE OF THE NOTIFICATION UNDER SECTION 4(1) WHICH ARE : (I) OPINION OF EXPERTS; (II) THE PRICE PAID WITHIN A REASONABLE TIME IN BONA FIDE TRANSACTIONS OF PURCHASE OF THE LANDS ACQUIRED OR T HE LANDS ADJACENT TO THE LANDS ACQUIRED AND POSSESSING SIMIL AR ADVANTAGES; AND (III) A NUMBER OF YEARS PURCHASE OF THE ACTUAL OR IMMEDIATELY PROSPECTIVE PROFITS OF THE LANDS ACQUIRED. THESE ME THODS, HOWEVER, DO NOT PRECLUDE THE COURT FROM TAKING ANY OTHER SPECIAL CIRCUMSTANCES INTO CONSIDERATION, THE REQUIREMENT B EING ALWAYS TO ARRIVE AS NEAR AS POSSIBLE AT AN ESTIMATE OF THE MA RKET VALUE. IN ARRIVING AT A REASONABLY CORRECT MARKET VALUE, IT M AY BE NECESSARY TO TAKE EVEN TWO OR ALL OF THOSE METHODS INTO ACCOUNT INASMUCH AS THE EXACT VALUATION IS NOT ALWA YS POSSIBLE AS NO TWO LANDS MAY BE THE SAME EITHER IN RESPECT OF THE SITUATION OR THE EXTENT OR THE POTENTIALITY NOR IS IT POSSIBLE IN ALL CASES TO HAVE RELIABLE MATERIAL FRO M WHICH THAT VALUATION CAN BE ACCURATELY DETERMINED.' SO FAR AS THE QUESTION OF VALUATION OF LAND IS CONC ERNED; RELIANCE HAS BEEN PLACED ON THE DECISION OF MATHURA PROSAD RAJGHARIA V. STATE OF WEST BENGAL , AIR 1971 SC 465, WHEREIN IT WAS OBSERVED THAT (AT PAGE 469) : 'THE MARKET VALUE ACCORDING TO THE DISPOSITION OF THE LAND APPARENTLY MEANS THE VALUE OF THE LAND IN A HYPOTHETICAL MARKET WHICH WILLING PURCHASER MAY IN THE PREVAILING CONDITIONS PAY FOR THE LAND TO A WILLING VENDOR, TA KING INTO CONSIDERATION ITS SITUATION AND ADVANTAGES. IN DETE RMINING THE DISPOSITION THE HYPOTHETICAL PURCHASER WOULD NORMAL LY TAKE INTO CONSIDERATION THE ADVANTAGES OF THE SITUATION AND T HE POTENTIALITIES OF THE LAND, FOR THE MARKET VALUE OF LAND, ESPECIAL LY IN URBAN AREAS, DEPENDS UPON ITS SITUATION, SPECIAL ADAPTABILITY, A DVANTAGES AND ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 48 - : INHERENT POTENTIALITY IN THE LIGHT OF THE DEMAND FO R LAND. WHERE A LARGE AREA OF LAND IN AN URBAN LOCALITY IS SOUGHT T O BE ACQUIRED IN DETERMINING THE MARKET VALUE THE METHOD OF BELTING IS APPROPRIATE. IT IS COMMON KNOWLEDGE THAT LANDS HAVING FRONTAGE O N THE MAIN ROADS IN URBAN AREAS ARE ALWAYS MORE ATTRACTIVE THA N THE LANDS WHICH HAVE NO SUCH FRONTAGE.' IN SAHIB SINGH KALHA V. AMRITSAR IMPROVEMENT TRUST [1992] SUPP. AILACC 593, IT WAS HELD BY THE APEX COURT THAT WHER E THERE IS A LARGE AREA OF UNDEVELOPED LAND UNDER ACQUISITION, P ROVISION HAS TO BE MADE FOR PROVIDING THE MINIMUM AMENITIES OF TOWN LIFE SUCH AS WATER CONNECTIONS, WELL LAID-OUT ROADS, DRAINAGE FA CILITY, ELECTRIC CONNECTIONS, ETC. THE PROCESS NECESSARILY INVOLVES DEDUCTION OF THE COST OF FACTORS REQUIRED TO BRING THE UNDEVELOPED L ANDS ON PAR WITH THE DEVELOPED LANDS. AN EXTENT OF 20 PER CENT. OF THE TOTAL LAND ACQUIRED WAS TAKEN AS A REASONABLE DEDUCTION F OR THE SPACE REQUIRED FOR ROAD. APART FROM IT, THE COST OF LAYIN G ROADS AND OTHER AMENITIES LIKE ELECTRICITY, WATER, UNDERGROUND DRAI NAGE, 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 O F AN EXTENSIVE PLOT OF LAND IN A CITY, THE STRIP THAT ADJOINS AN I MPORTANT ROAD WILL HAVE A HIGHER VALUE THAN WHAT IS IN THE REAR, FOR O BVIOUS 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 ASC ERTAINING THE VALUE OF THE LAND AND THE BREAK-UP VALUE OF THE BUI LDINGS SEPARATELY. THE LAND AND THE BUILDING CONSTITUTE ON E UNIT AND THE VALUE OF THE ENTIRE UNIT MUST BE DETERMINED WITH AL L ITS ADVANTAGES AND ITS POTENTIALITIES.' THE METHOD OF CAPITALISATI ON OF RETURN ACTUALLY RECEIVED OR WHICH MIGHT REASONABLY BE RECE IVED FROM THE LAND AND THE BUILDINGS IN RESPECT OF A PROPERTY WHI CH IS USED FOR BUSINESS PURPOSES WAS APPROVED. IN CWT V. RAGHUBAR NARAIN SINGH [1984] 146 ITR 228, IT WAS HELD BY THE APEX COURT THAT THE MARKET VALUE OF AN ASSET WOULD BE A QUESTION OF FACT, ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 49 - : BUT IF THE TRIBUNAL HAS ARRIVED AT ITS CONCLUSION B Y TAKING WRONG PRINCIPLES INTO CONSIDERATION, THEN SUCH A FI NDING WOULD NOT BE BINDING ON THE HIGH COURT. THE CONTENTION THAT THE AREA IS IN THE VICINITY OF A FACTORY WHICH IS EMITTING A FOUL SMELL AND CHEMICALS CANNOT BE CONSI DERED BECAUSE IT IS MENTIONED IN THE ORDER THAT A NUMBER OF OTHER COLONIES HAVE ALSO BEEN DEVELOPED AND HAD IT BEEN THE POSITION TH E RESIDENTS OF THE COLONIES WOULD HAVE APPROACHED THE ENVIRONMENTA L AUTHORITIES OF THE STATE OF RAJASTHAN FOR TAKING NECESSARY ACTI ON. THE CONTENTION THAT THE ENTIRE LAND CANNOT BE USED FOR RESIDENTIAL PURPOSES AS PART OF IT IS TO BE LEFT OUT FOR FACILI TIES AND ROADS ARE TO BE DEVELOPED MAY AFFECT THE MARKET VALUE. THE QUESTION WHETHER THE INSTANCE OF SALE SHOULD BE RELIED UPON IS ALSO A QUESTION OF FACT. IT MAY BE THE CORRECT DEPICTION OF THE MARKET VALUE (RATE) OR MAY NOT BE SO AND, THEREFORE , THE MARKET VALUE IS TO BE ADOPTED LOOKING TO THE RATES PREVAILING IN THE LOCALITY, SITUATION OF THE PLOT, THE POTENTIALITY AND USE OF IT. THE VALUATION OF THE LAND COULD BE ON THE BASIS OF COMPARABLE CASES OF WHICH ONE EXAMPLE HAS BEEN GIVE N BY THE RESPONDENT WHILE THE OTHER HAS BEEN GIVEN BY TH E PETITIONER. T HE TOTAL VALUE FOR WHICH THE AGREEMENT WAS ENTERED INTO WAS OF RS. 99,84,500. IF THE VALUE OF THE GODO WN OF RS. 42 LAKHS IS REDUCED THEREFROM, THE VALUE OF THE LAND R EMAINS ONLY AT RS. 57,84,500 IN RESPECT OF 9,500 SQ. YARDS. THE VA LUE COMES APPROXIMATELY TO RS. 600 PER SQ. YARD. IT MAY BE OB SERVED THAT IN THE CASE OF RAJENDRA GIRIRAJ PRASAD TIWARI V. UNION OF INDIA [1995] 212 ITR 158-S. B. CIVIL WRIT PETITION NO. 3492 OF 1 993 DECIDED ON APRIL 18, 1994, IT WAS OBSERVED THAT JUDICIAL REVIE W IS LIMITED ONLY TO THE EXTENT OF EXAMINING AS TO WHETHER ANY FINDIN G IS PERVERSE OR THERE IS NON-APPLICATION OF MIND OR THE ORDER IS CO NTRARY TO THE ESTABLISHED PRINCIPLES OF LAW. IT WAS FURTHER OBSER VED THAT THIS COURT IS NOT SITTING IN APPEAL OVER THE ORDER PASSE D BY THE APPROPRIATE AUTHORITY AND THE SATISFACTION HAS TO B E ARRIVED AT BY ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 50 - : THE APPROPRIATE AUTHORITY ON THE BASIS OF THE VALUA TION REPORT AND THE RELEVANT DOCUMENTS WHICH HAVE BEEN TAKEN INTO C ONSIDERATION. 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 D ECEMBER 7, 1992. THE SAID COLONY IS SITUATED IN THE INFERIOR T HAN THE PRESENT LAND AND NECESSARY DEDUCTIONS HAVE ALREADY BEEN GIV EN TO THE PETITIONER. THE LAND IS SAID TO BE IN THE VICINITY OF THE MAIN ROAD. THE VARIOUS ARGUMENTS WHICH HAVE BEEN RAISED BY LEA RNED COUNSEL FOR THE PETITIONER TO ARRIVE AT THE VALUE OF THE LA ND ARE ONLY HYPOTHETICAL. THE DEDUCTION AS CONTEMPLATED IN THE CASE OF SAHIB SINGH [1992] SUPP. AILACC 593 (SC) REFERRED TO ABOV E IS GIVEN, STILL THE VALUE EXCEEDS MORE THAN 15 PER CENT OF TH E APPARENT CONSIDERATION. IN THESE CIRCUMSTANCES, I AM OF THE VIEW THAT THE A CTION OF THE APPROPRIATE AUTHORITY IN MAKING THE ORDER OF THE PR E-EMPTIVE PURCHASE IS NOT CONTRARY TO LAW. THE RELIANCE ON THE LETTER DATED NOVEMBER 4, 1992, WITH REGARD TO THE RESERVE RICE IS OF NO AVAIL BECAUSE IT IS NOT T HE MARKET VALUE BUT IS ONLY THE RESERVE PRICE BELOW WHICH THE JAIPU R DEVELOPMENT AUTHORITY CANNOT SELL OR ALLOT A PLOT TO ANY PERSON EVEN OF A RESERVED CATEGORY AND SUCH PRICE CANNOT BE TAKEN IN TO CONSIDERATION WHILE DETERMINING THE MARKET VALUE FO R PRE-EMPTIVE PURCHASE UNDER CHAPTER XX-C. THE MARKET RATES FOR THE PURPOSE OF REGISTRATION OF AN IMMOVABLE PROPERTY AS NOTIFIED BY THE SUB-REGISTRAR CAN ALSO HAVE NO APPLICATION FOR DETERMINING THE MARKET VALUE UNDER CHAPTER XX-C OF THE ACT. IT IS LIMITED ONLY F OR PAYMENT OF THE STAMP DUTY. THE SAID NOTIFICATION AL SO DOES NOT TAKE INTO CONSIDERATION THE DIFFERENCE OF VALUE , EVEN OF THE PLOTS IN THE SAME LOCALITY HAVING DIFFERENT SIT UATION. AS SUCH THE VALUE NOTIFIED FOR THE PURPOSE OF REGISTRA TION ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 51 - : CANNOT BE A PROPER GUIDE FOR VALUATION IN RESPECT O F PRE- EMPTIVE PURCHASE. AN OBJECTION WAS ALSO TAKEN THAT THE LAND IS NOT AN IDENTIFIABLE SEPARATE PIECE OF LAND AS THE OTHER CO-OWNERS MAY O BJECT OR GIVE ANOTHER LAND IN LIEU OF THE LAND SHOWN IN THE MAP. THIS ARGUMENT IS ALSO OF NO AVAIL TO THE PETITIONER, BECAUSE THE OTHER CO-OWNERS HAVE NOT RAISED ANY OBJECTION WHEN THE POSSESSION W AS TAKEN OVER BY THE PETITIONER FROM THE VENDOR AND A NUMBER OF V EHICLES MUST HAVE COME TO UNLOAD HIS GOODS AND, THEREFORE, IT CO ULD BE A CASE OF IMPLIED CONSENT. EVEN IF IT IS NOT A CASE OF IMP LIED CONSENT, THE RESPONSIBILITY HAS BEEN TAKEN BY THE SELLER THAT TH E CONVERSION CHARGES OF THE LAND HAVE BEEN DEPOSITED AND THE LAN D AS SHOWN IN THE MAP IS TO BE SOLD BY THE VENDOR. THE AGREEMENT RECITING THE OBLIGATION OF THE SELLER IS THE COMPLETE ANSWER TO THE ARGUMENT RAISED BY LEARNED COUNSEL FOR THE PETITIONER. SHRI B. L. SHARMA, APPEARING ON BEHALF OF THE VENDO R, HAS SUBMITTED THAT ON ACCOUNT OF THE STAY ORDER THE SEL LER COULD NOT GET THE REMAINING SALE CONSIDERATION AND THUS IN VI EW OF THE DECISION IN C. DASS V. APPROPRIATE AUTHORITY [1993] 199 ITR 9 (SC), AT LEAST DIRECTION FOR INTEREST SHOULD BE GIV EN. THIS MATTER HAS ALSO BEEN CONSIDERED BY ME. THE SELLER HAS ALRE ADY RECEIVED A SUM OF RS. 40,00,000 AS AN ADVANCE UNDER THE CONTRA CT ITSELF, AND EVEN AFTER THE CLEARANCE BY THE APPROPRIATE AUTHORI TY CERTAIN OBLIGATIONS ARE TO BE FULFILLED BY THE SELLER. DIRE CTIONS FOR PAYMENT OF INTEREST COULD BE GIVEN IN AN APPROPRIATE CASE B UT I DO NOT CONSIDER THAT THE PRESENT ONE IS AN APPROPRIATE CAS E FOR GIVING DIRECTIONS TO THE CENTRAL GOVERNMENT FOR MAKING PAY MENT 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 SAI D TO BE WITHOUT APPLICATION OF MIND OR PERVERSE NOR COULD T HE ORDER BE SAID TO BE CONTRARY TO THE ESTABLISHED PRINCIPLES O F LAW. THE WRIT PETITION HAVING NO SUBSTANCE IS HEREBY REJ ECTED. THE RESPONDENT-CENTRAL GOVERNMENT SHALL MAKE THE PAYMEN T TO THE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 52 - : 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 PE RUSED THE MATERIAL AVAILABLE ON RECORD. IN THE LIGHT OF T HE ABOVE CASES, NOW WE SHALL EXAMINE THE FACTS OF THE PRESENT APPEA L BEFORE US. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDI VIDUAL, FILED HIS RETURN ON 27.07.2009, WHICH WAS PROCESSED U/S.143(1 ) OF THE INCOME TAX ACT,1961. THE CASE OF THE ASSESSEE WAS S ELECTED FOR SCRUTINY UNDER CASS, THEREFORE, NOTICES U/S.143(2) AND 142(1) WERE ISSUED ON 25.08.2010 AND 28.07.2011 RESPECTIVE LY. THE ASSESSEE IN HIS RETURN OFFERED LONG TERM CAPITAL GA INS OF ` .4,53,983/-. AS PER THE REVENUE/AIR INFORMATION, TH E ASSESSEE SOLD THE PROPERTY, JOINTLY HELD WITH HIS BROTHERS, FOR A CONSIDERATION OF ` .6,50,00,000/-, THE COPY OF THE SALE DEED WAS OBTAINED FROM THE OFFICE OF THE SUB-REGISTRAR. IT WAS OBSERVED THAT THE PROPERTY TO THE EXTENT OF 5903 SQ. FT., OUT OF 13,058 SQ.FT WAS SOLD DURING THE ASSESSMENT YEAR 2008- 09. WHILE WORKING OUT THE LONG TERM CAPITAL GAINS, THE FAIR MARKET VALUE AS ON 01.04.1981 FOR THE PROPERTY MEASURING 5 903 SQ.FT. , AT NEW DOOR NO.160, (OLD NO.937), POONAMALEE HIGH R OAD, ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 53 - : PURASAWAKAM, CHENNAI WAS TAKEN AT ` .2,29,792/- (I.E RS. 5 LACKS PER GROUND). TO VERIFY THE CLAIM, A LETTER WAS ADDR ESSED TO THE SUB-REGISTRAR TO VERIFY THE VALUE OF THE CLAIMED PR OPERTY AS ON 01.04.1981. AS PER THE SUB-REGISTRAR, VIDE LETTER D T.10.11.2011 THE PROPERTY WAS OPINED TO BE ` .50,000/-PER SQUARE GROUND. AS PER THE REVENUE, THE VALUE WAS ONLY CONSIDERED FOR THE LAND AND NOT FOR THE BUILDING, THEREFORE, THE VALUE OF THE B UILDING WAS NOT CONSIDERED. ON APPEAL, BEFORE THE LD.CIT(A), THE L D. FIRST APPELLATE AUTHORITY AFFIRMED THE STAND OF THE LD. A SSESSING OFFICER. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE T HIS TRIBUNAL. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, CO NCLUSION DRAWN IN THE IMPUGNED ORDER, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL AND MATERIAL AVAILABLE ON RECORD , IF KEPT IN JUXTAPOSITION, AND ANALYZED DURING OPEN HEARING WE SOUGHT THE OPINION WITH RESPECT TO VALUATION, FROM BOTH SIDES, WHEREIN THE LD.DR OPINED THAT IN ANY CASE THAT THE VALUATION MA Y NOT BE MORE THAN ` .2,50,000/- HOWEVER, THE LD.COUNSEL FOR THE ASSESSE E ASSERTED THAT THE FAIR MARKET VALUE AS ON 01.04.198 1 WAS NOT LESS THAN ` .5 LAKHS. SO FAR AS THE OTHER FACTS ARE CONCERNED, THESE ARE ON RECORD. NOW THE QUESTION FOR OUR CONSIDERATION I S ADOPTION OF ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 54 - : VALUE OF THE IMPUGNED PROPERTY AS ON 01.04.1981. H ONBLE APEX COURT 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 VALUATION TO BE ADOPTED IN ASCERTAINING THE MARKET VALUE OF THE LAND ON THE DATE OF THE NOT IFICATION UNDER SECTION 4(1) WHICH ARE AS UNDER :- (I) OPINION OF EXPERTS; (II) THE PRICE PAID WITHIN A REASONABLE TIME IN BON A FIDE TRANSACTIONS OF PURCHASE OF THE LANDS ACQUIRED OR T HE LANDS ADJACENT TO THE LANDS ACQUIRED AND POSSESSING SIMIL AR ADVANTAGES; (III) A NUMBER OF YEARS PURCHASE OF THE ACTUAL OR I MMEDIATELY PROSPECTIVE PROFITS OF THE LANDS ACQUIRED. THE HONBLE APEX COURT FURTHER OBSERVED THAT THE AB OVE METHODS, HOWEVER, DO NOT PRECLUDE THE COURT FROM TA KING ANY OTHER SPECIAL CIRCUMSTANCES INTO CONSIDERATION, THE REQUIREMENT BEING ALWAYS TO ARRIVE AS NEAR AS POSSI BLE AT AN ESTIMATE OF THE MARKET VALUE. IT WAS SPECIFICALLY O BSERVED THAT IN ARRIVING AT A REASONABLY CORRECT MARKET VALUE, I T MAY BE NECESSARY TO TAKE EVEN TWO OR ALL OF THOSE METHO DS INTO ACCOUNT INASMUCH AS THE EXACT VALUATION IS NOT ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 55 - : ALWAYS POSSIBLE AS NO TWO LANDS MAY BE THE SAME EITHER IN RESPECT OF THE SITUATION OR THE EXTENT OR THE POTENTIALITY NOR IS IT POSSIBLE IN ALL CASES TO HAV E RELIABLE MATERIAL FROM WHICH THAT VALUATION CAN BE ACCURATELY DETERMINED. LIKEWISE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. J.CHELLADURAI (SUPRA) OBSERVED THAT NO USEFUL PURPOSE WOULD BE SERVED TO REMAND TH E MATTER AND FURTHER OBSERVED IT WOULD BE REASONABLE TO FIX MARKET VALUE OF THE LAND BY AVERAGING VALUE GIVEN BY THE A SSESSEE AND THE ASSESSING OFFICER AS ON 01.04.1981. UNDER T HESE OBSERVATIONS FROM HONBLE HIGH COURTS INCLUDING FRO M HONBLE APEX COURT, WE DEEM IT APPROPRIATE TO ADOPT THE VAL UE AS SUGGESTED FROM BOTH SIDES. THEREFORE, CONSIDERING T HE TOTALITY OF THE FACTS AND THE ASSERTIONS MADE FROM BOTH SIDE S, WE ARE OF THE VIEW THAT IT WILL MEET THE ENDS OF JUSTICE, IF THE FAIR MARKET VALUE OF THE PROPERTY IS ADOPTED AT ` `` ` .3,50,000/- AS AGAINST ` .5,00,000/-, PER GROUND, AS ON 01.04.1981, SUGGESTED BY THE LD.COUNSEL FOR THE ASSESSEE AND ` .50,000/-, PER GROUND, ADOPTED BY THE LD.CIT(A). THUS, THE APP EAL OF THE ITA NO.1602/CHNY/2018 MR.MOHAN ALAGAPPAN :- 56 - : ASSESSEE IS PARTLY ALLOWED. THE LD. ASSESSING OFFIC ER IS DIRECTED TO ADOPT THE VALUE OF THE PROPERTY AS INDICATED HER EIN ABOVE. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT, AT THE CONCLUSION OF THE HEARING, IN THE PRESENCE OF LEARNED COUNSEL FRO M BOTH SIDES ON 05 TH DECEMBER, 2018. SD/ - SD/ - ! ' # $ % & $ % ' (A.MOHAN ALANKAMONY) & ' / ACCOUNTANT MEMBER ( ) (JOGINDER SINGH) / VICE PRESIDENT () / CHENNAI *+ / DATED: 05 TH DECEMBER, 2018. K S SUNDARAM +,$$ -.$/. / COPY TO: $ 1 . / APPELLANT 3. $ 0$!' / CIT(A) 5. .12$ 3 / DR 2. / RESPONDENT 4. $ 0 / CIT 6. 24$5 / GF