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Issues Involved:
1. Fair market value of the disputed property. 2. Validity of the acquisition proceedings initiated by the Competent Authority. 3. Consideration stated in the sale deed and its implications on tax liability. Issue-wise Detailed Analysis: 1. Fair Market Value of the Disputed Property: The primary issue in both appeals is determining the fair market value of the building in dispute. The Assistant Valuation Officer estimated the fair market value using the Rent Capitalisation Method, concluding that the property was worth Rs. 56,160 based on a monthly rent of Rs. 390 and a year's purchase factor of 16. The Competent Authority relied on this estimation to initiate acquisition proceedings, asserting that the fair market value exceeded the stated consideration of Rs. 25,000 by more than 15 percent. The transferee contested this valuation, presenting a report from a Registered Valuer, Shri S.C. Vermani, who certified the fair market value at Rs. 25,000, using a year's purchase factor of 8. The Competent Authority rejected this report, questioning the rationale behind the lower year's purchase factor and suggesting that the valuer was biased towards the transferee. The Tribunal found the Competent Authority's reliance on a year's purchase factor of 16 to be flawed, noting that the factor varied between 17 and 33 in other cases but was never accepted by the Amritsar Bench of the Tribunal. The Tribunal emphasized that the building was governed by the Rent Restriction Act, 1949, and occupied by protected tenants, making eviction difficult and reducing the property's market value. The Tribunal concluded that the Competent Authority failed to consider the implications of the Rent Restriction Act and the non-delivery of unobstructed possession, which significantly depreciated the property's value. 2. Validity of the Acquisition Proceedings Initiated by the Competent Authority: The Competent Authority initiated acquisition proceedings based on the belief that the fair market value exceeded the apparent consideration by more than 15 percent and that the consideration was not truly stated to facilitate tax evasion. Notices were served to the transferor, transferee, and tenants, and objections were invited. The Tribunal found that the Competent Authority did not adequately consider the objections raised by the transferor and transferee. The objections highlighted the building's age, maintenance requirements, and the difficulty of evicting tenants under the Rent Restriction Act. The Tribunal criticized the Competent Authority for estimating the fair market value as if the property were free from encumbrances and not considering the significant discount needed for properties occupied by protected tenants. 3. Consideration Stated in the Sale Deed and Its Implications on Tax Liability: The transferor and transferee argued that the sale consideration of Rs. 25,000 was truly stated in the sale deed. They contended that the property was sold under compelling circumstances, as the owner, Smt. Chanan Wati, was an ailing lady who needed funds for her treatment. The transferor first approached the tenants, who offered only Rs. 22,000, leading her to sell to the transferee who made a higher offer. The Tribunal accepted the transferor's version, noting that the tenants' claim of offering Rs. 45,000 was not credible. The Competent Authority's disbelief in the tenants' version supported this conclusion. The Tribunal emphasized that the sale was made under pressing circumstances, and there was no evidence to suggest that the consideration was suppressed to evade tax liability. Conclusion: The Tribunal concluded that the fair market value of the property, considering the Rent Restriction Act and the non-delivery of unobstructed possession, did not exceed the stated consideration of Rs. 25,000. The acquisition proceedings initiated by the Competent Authority were found to be flawed, and the objections raised by the transferor and transferee were valid. The Tribunal allowed both appeals, affirming that the consideration was truly stated in the sale deed and there was no intention to evade tax liability.
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