TMI Blog1996 (9) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... ia wrote a letter to M/s. Hindustan Petroleum Limited that he had sold the said land to Shri Bhanuprasad Jaiswal and also delivered the possession of the said land to him in terms of the agreement for sale dated 12-6-1970 and for delivering the possession dated 13-6-1970. He requested M/s. Hindustan Petroleum Limited to enter into further agreement with Shri Bhanuprasad Jaiswal. On the receipt of this letter, M/s. Hindustan Petroleum Ltd. wrote to Shri Bhanuprasad Jaiswal for certified copies of the sale deed for drawing up of a fresh lease deed as the new lessor. He further insisted and requested to Shri Bhanuprasad Jaiswal to make a formal request to stop the payment of rental to Shri P.B. Chawrasia and to start the payment to Shri Jaiswal. Two months after this, on 17-8-1970, Shri Purushottam Chawrasia wrote another letter to M/s. Hindustan Petroleum Limited cancelling his earlier letter, as according to him, those agreements dated 12-6-1970 and 13-6-1970 did not materialise and, therefore, he continued to be a lessor and as per that letter, the rent was to be paid to him in future along-with the rent of July and August 1970. There is another letter dated 8-12-1994 written by Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al entered into a compromise on 13-1-1988 for settling the disputes in the Suit No. 164 of 1978 filed by Shri Jaiswal. Under this compromise, the land is to be sold by Shri Purushottam Chawrasia to Shri Bhanuprasad Jaiswal for a consideration of Rs. 61,000. This compromise petition was filed on 19-1-1988 before the Civil Judge, Sr. Division, Nagpur, who on that date, accepted the petition and ordered that decree be drawn in terms of compromise petition. The actual decree was passed on 1-2-1988. However, on 15-1-1988, i.e. before filing the compromise petition, Shri Chawrasia and Shri Jaiswal executed a sale deed and registered it on that very date, that is to say, on 15-1-1988. In this sale deed, there is mention that Shri Chawrasia executed the registered agreements of sale and possession on 12-6-1970 and 13-6-1970 and there is a civil suit for specific performance and the parties to civil suit had arrived at settlement. It is, however, notable that there is no mention in the sale deed that it is in pursuance of the compromise decree because of the fact that the compromise petition was filed and accepted only on 19-1-1988 and the formal decree, of course, was passed on 1-2-1988 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 was a binding contract and enforceable. Thus, the sale deed registered on 20-1-1988 could not result in a deemed gift. (6) It was submitted that when the deemed gift is also a gift and the provisions of deemed gift would apply, it was submitted that it should be proved that the inadequacy on consideration is voluntary. 6. The Department was represented before the CGT(A). It was submitted that the agreement dated 13-6-1970 was never intended to be acted upon. Shri Chawrasia himself had written to Hindustan Petroleum Limited whose agents were running a Petrol Pump on the property that the agreement dated 13-6-1970 is not to be acted upon. It was also submitted by him that the property in question is for sale of a plot of land. The superstructure is not sold. It was submitted before the CGT(A) that the compromise decree between the assessee and the vendee is a colourable exercise, and the Valuation Officer has no jurisdiction to value the property since the apparent consideration exceeded Rs. 5 lakhs. 7. The Valuation Officer was also present before the CGT(A) and he submitted that the valuation made by the earlier Valuation Officer was proper but the value determined by the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deed of compromise and the purchaser shall have the right to enforce it by executing through court. " According to the CGT(A), the above shows that at the time of the registration of deed, there was no court decree. He held that the case of the assessee that they were executing the agreement in pursuance to a court decree fails. He held that it cannot be presumed that the compromise will be sanctified by the court before decree was actually pronounced by the court. He held that the court decree closes the litigation. According to him, it does not give in any way a finding as to the adequacy of the consideration. He held that the sale deed is to be treated as one executed on 15-1-1988 and its effects will have to be considered depending on the market consideration prevailing on that date. He noted the fact that there was an agreement dated 12-6-1970 for transfer of the property for a consideration of Rs. 32,500. At the same time, he went through the document which was filed by the Assessing Officer before him which is said to have been issued by Shri P.B. Chawrasia to M/s. Hindustan Petroleum Limited., which reads as under : " This is to inform you that I cancel the notice da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been a subject-matter of dispute. The CGT(A) held that if the Asstt. Valuation Officer has jurisdiction to value the property, then a higher officer, namely, the Valuation Officer has jurisdiction to value the property and he had valued the same at Rs. 82,500. Since the jurisdiction of the Valuation Officer and his valuation was in dispute, the matter was enquired into further and the Valuation Officer informed him that the reversionary value of the land was not taken into consideration and should have been taken into consideration. After going through the case cited by the assessee reported in M.C. Khunnah v. Union of India [1979] 118 ITR 414 (All.), where it was held that : " When the Valuation Officer gives his report in accordance with section 16A(5) of the Act on a particular date, he ceases to have any jurisdiction after that date to review that report. There is no provision empowering the WTO to make a second reference to the Valuation Officer which might necessitate the Valuation Officer reopening the proceedings before him and reviewing his report already submitted. " He held that in this case the Valuation Officer stated, that the earlier Valuation Officer had committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property, he found that the lease which was supposed to have been renewed has not been renewed and the dispute is going on between the parties including Hindustan Petroleum Limited who have filed a suit of pre-emption on 12-1-1989. It is on the basis of the above facts that the Assessing Officer has given a discount of Rs. 20 per sq. ft. Instead of valuing the land at Rs. 100 per sq. ft., he has valued the land at Rs. 80 per sq. ft. He held that the gift is to be valued on the date of sale, ie. 15-1-1988. On the date of sale, the lease is to run for another three years, on considering the values given by both the Valuation Officer and Assessing Officer, he held that it should be fair and reasonable to fix the market value of the property at Rs. 11 lakhs, before considering the discount for the purpose of lease as well as the right of pre-emptive purchase. He, therefore, allowed the discount at 33 1/3 % from the market value so determined. He, therefore, held that the fair market value of the property for the purpose of assessment will be 66.67% of Rs. 11 lakhs, i.e. Rs. 7,33,370. After deducting the consideration shown in the document, he valued the taxable gift at Rs. 6,72,370. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plot No. 3 and house property thereon covered under the agreement dated 1-6-1970 and agreed to transfer tenanted property, fetching very small rent to Shri Bhanuprasad for a compromised amount of Rs. 61,000 as against consideration of Rs. 32,500 stated in the agreement. It was submitted that the compromise was a lesser evil for him. Jaiswals are not related to the assessee and there was no reason as to why the assessee would voluntarily transfer the property to him on a lower consideration. It was also submitted that the court decree was binding on both the parties and if the assessee had not executed the sale deed, the court would have executed the sale deed in pursuance of its decree. It was submitted that the observation of the CGT(A) that the agreement dated 12-6-1970 was not in pursuance of the court decree, was not correct and was wrong. It was submitted that the CGT(A) was not justified in ignoring the long list of events of legal battles for 18 years starting from agreement of June 1970 and culminating into a court's decree of 1988 and consequent sale deed registered on 20-1-1988. It was submitted that the decree clearly says that the case was decided on 19-1-1988 and the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 107 (Guj.) Page 106 14. The Departmental Representative, however, strongly relied on the orders of the lower authorities to submit that, as submitted by the assessee himself, he was in two minds regarding carrying out the terms and conditions of agreement to sale dated 12-6-1970 and 13-6-1970. The prices of the land had increased several times and the assessee was trying to avoid the sale. It was, therefore, submitted, there is no dispute that the value of the land as on the date of decree itself was definitely much higher than what was shown in the agreement to sale and in the compromise decree. It was submitted that the agreements to sale dated 12-6-1970 and 13-6-1970 were valid only for a period of three years under the provisions of the Limitation Act and there is no provision under the Limitation Act which authorises the parties to extend the time limit. It was submitted that when the assessee realised that he would be under difficult circumstances under civil suits, he, for the reason best known to him, agreed to transfer the property in question at a very low value. It was, therefore, submitted that right from the beginning, the intention of this assessee was to avoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty Act, dealing with the part performance, Shri Chawrasia is barred from enforcing any right in respect of the land even though there is no registered sale deed within the meaning of section 17 of the Registration Act. In our opinion, in that case, there is an alienation of the property in violation of the High Court's injunction dated 10-3-1970 and as such is void. 16. On 17-8-1970, Shri Chawrasia informed M/s. Hindustan Petroleum Limited that the agreement dated 12-6-1970 and 13-6-1970 did not materialise and he was the owner of the land and the rent should be paid to him. Therefore, on that date, he committed a breach of contract by backing out from the agreement. Shri Jaiswal had been informed the said breach. In that case, the right to file civil suit in terms of Article 54 of the Limitation Act expired on 17-8-1973, that is to say, three years from the breach of the agreement. As per Article 54 of the Limitation Act, for the specific performance of a contract, the time limit is of 3 years or the date fixed for the performance or if no such date is fixed a plaintiff has noticed that the performance has been refused. The Civil Suit of 1978, in our opinion, is barred by li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much after the registration. We are, therefore, of the opinion that it cannot be said that the sale deed is registered on 20-1-1988. The sale deed is not in pursuance to the compromise decree in view of the fact that the assessee himself had accepted that he did not want to carry out the agreements to sale dated 12-6-1970 and 13-6-1970 because the price of the property in the market had gone up tremendously in land in last several years. It is obvious that the compromise decree which is a got-up act and was an attempt to avoid the stamp duty payable at the market value of the land. 17. The High Court on 8-1-1973 had considered the agreements to sale and possession dated 12-6-1970 and 13-6-1970. The High Court clearly stated that "we are not satisfied about the bona fide of the sale and the manner in which it was sought to be brought about". It was obvious that the High Court had come to the conclusion that the agreement was not bona fide. Therefore, the sale deed cannot be in pursuance to the agreement. In contempt petition, the High Court was concerned with the fact whether the assessee had committed a contempt of the Court. The High Court held that unless there is a contemptab ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
