TMI Blog2001 (8) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... by S. RAJENDRA BABU J.-The property comprised in No. G-4 (Old No. C-62), Maharani Bagh, New Delhi, on a plot measuring about 800 sq. yards was agreed to be sold pursuant to an agreement dated July 1, 1993, for a sale consideration of Rs. 79 lakhs. The property consists of two floors-ground and the first-and is in occupation of the tenants. The agreement provided for symbolic delivery of the possession while it was open to the purchaser to make use of the portion over the roof on the first floor. An application in Form No. 37-1 was filed on July 9, 1993. The appropriate authority worked out the fair market value of the property and the apparent consideration fell short by 24 per cent. of the fair market value. The appropriate authority compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rth by the appropriate authority are as follows,: Subject property Ist sale instance Sale agreement 97-93 Apparent sale consideration Declared land rate works out at Rs. 21,821 per sq. mt. Value to be increased at 1 per cent. per month for 24 months 24 per cent. Sale deed dated 25.6.91, 24 months earlier sale agreement. Has no basement 10 per cent. to be deducted Thus value to be added is 14 per cent. (24 per cent.10 per cent.) If 14 per cent. is added the land rate of subject property would come to Rs. 21,821 x 14 per cent. Rs. 24,875 or Rs. 25,000 per sq. mt. Value of land Rs. 1.30 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (140-100) 28 per cent. Side open (not available/which is available in 2nd instance) 5 per cent. Has no basement potential 10 + 7 per cent. 43 per cent. 36 per cent. Declared land rate deducting 36 per cent. 29,587 x .64 = Rs. 18,950 per sq. mt. Value of the land of the subject property 52 x 18,950 Rs. 98,54,000 Depreciated value of the structure Rs. 9,33,758 Rs. 1,07,87,758 Tenanted Depreciated value at the rate of 8 per cent. Rs. 67,96,287 (Rs. 1,07,87,758 x .63) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. and 6 years rent was added to the value arrived at by the above process. The High Court disapproved this process of arriving at the figures and that the apparent consideration fell short of the fair market value by more than 15 per cent. and, therefore, the High Court held that the action is incorrect. The Department contends that the learned judges of the High Court could not have sat in judgment over the manner of calculations made by the appropriate authority. If any of the factors set out therein had been ignored in the matter of arrival of the fair market value, the same would have affected the consideration made by the appropriate authority. There are several methods of arriving at fair market value such as comparative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered into in June, 1991, the agreement for the property in question was entered into on July 1, 1993. Therefore, there is no basis for adding 24 per cent. on the hypothetical basis that there would be increase of 1 per cent. every month. In respect of tenancy, the plea taken before the High Court is that the purchaser had mutual terms to get the property vacated from the tenant. While the ground floor tenancy was from the year 1979 and the first floor tenancy was from the year 1967, there is hardly any justification to presume that the tenants would vacate in 5/6 years. The sale instance in respect of property comprised in S-39-A. Panchsheel Park, which was substantially tenanted without any justification, was not taken into considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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