TMI Blog1995 (9) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... le of the property and the balance of Rs. 50,000 at the time of registration of the sale deed. The agreement also required the petitioner to obtain the requisite permission from the appropriate authority under Chapter XX-C of the Income-tax Act, 1961, and that of the L and DO within a period of nine months of the signing of the agreement to sell. It further stipulated that the parties shall complete the sale of the property within thirty days of the receipt of all the necessary permissions and clearances from the Income-tax Department and the L and DO. The agreement to sell also postulated handing over of the physical possession of the property, except a room on the ground floor, allegedly let out to one, Anand Goswami, at a monthly rental of Rs. 225, with effect from July 1, 1986, to the petitioner at the time of the registration of the sale deed. The deed further recited that the property was free from all encumbrances. On April 19, 1993. the petitioner filed a statement in Form No. 37-I under rule 48L of the Income-tax Rules, 1962, together with a copy of the agreement to sell dated April 7, 1993, before the appropriate authority. The statement was signed by the third responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in A block were allotted to the junior officers of the armed forces : that C and D blocks abut on the Ring Road and Lal Bahadur Shastri Marg, facing Lajpat Nagar, but A block faces slums of Kotla Mubarkpur and quarters of fourth class employees of Sewa Nagar, that in the circumstances the sale instance of C-538, Defence Colony, was not comparable and that the price fetched by property No. A-20, Defence Colony, in the auction does not indicate the real market rate. Besides the petitioner relied upon sale instances of immovable properties located at A-2, Defence Colony, A-175, Defence Colony, D-364, Defence Colony, and D-319, Defence Colony. After the receipt of the replies to the show-cause notices, the appropriate authority gave the petitioner an opportunity to make oral submissions before it, pursuant to which the petitioner appeared and made submissions through counsel and also requested the appropriate authority to summon Anand Goswami, who was said to be the tenant of a room in the property in question. The appropriate authority inspected the property and also recorded the statement of Anand Goswami. On consideration of the matter, the appropriate authority by its order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission of the petitioner that the show-cause notice was not signed by the competent authority, it noted that the show-cause notice was issued under its authority as was apparent from the opening sentence of the notice which stated as follows : " Under the instructions of the Appropriate Authority, Delhi, I am to state. . . ." The petitioner's plea that one room of the premises was given to one Anand Goswami on rent did not find favour with the appropriate authority. It was of the opinion that the rent receipts produced by Anand Goswami were freshly prepared at one go and the dates on receipt Nos. 19 and 24 were changed. It also noted that at the time of inspection of the property it was found that the alleged tenanted portion of the property was not a room as mentioned in the agreement to sell but was a temporary tin/asbestos sheet structure covering the open backyard alongside the boundary wall. Before the appropriate authority, Anand Goswami admitted that the shop was lying closed since May, 1989. Having regard to the above facts, the appropriate authority came to the conclusion that the alleged lease of a room was no longer in existence and the premises were fully in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition. I have heard learned counsel for the parties. Before dealing with the submissions of learned counsel, it will be advantageous to mention the object and purpose of Chapter XX-C of the Income-tax Act, 1961, and the procedure to be followed by the appropriate authority for passing an order for pre-emptive purchase by the Central Government of immovable properties as culled from the decision of the Supreme Court in C. B. Gautam v. Union of India [1993] 199 ITR 530. Chapter XX-C was inserted in the Income-tax Act, 1961, by the Finance Act, 1986. The provisions were brought into effect from October 1, 1986, by a notification dated August 7, 1986. In real estate transactions there was need to check the passing of black money from the vendee to vendor. In order to prevent the tax dodgers from suppressing the correct value of the property, Chapter XX-C was introduced. Where the value of the property exceeds Rs. 5 lakhs the parties in the Metropolitan city of Delhi are required to first enter into an agreement to sell before concluding the sale. Within 15 days of entering into the agreement to sell, they are required to file a statement in, Form No. 37-I together with the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suring 271.73 sq. mts. was agreed to be sold under an agreement to sell dated February 2, 1992, for an amount of Rs. 88 lakhs. Though the agreement to sell in the instant case was executed five months after the aforesaid instance of sale, yet there was a substantial difference in their valuation. On adjustment of the time and the location factors the land value of C-538, Defence Colony, has been determined by the appropriate authority as Rs. 36,969 per sq. mt., which is well above 15 per cent. as compared to the apparent sale consideration of the instant property. These calculations have not been controverted by the petitioner. The only argument advanced by the petitioner before the appropriate authority in regard to the sale instance of C-538, Defence Colony, New Delhi, was that the value of the property in C and D blocks in Defence Colony cannot be compared to the value of the property in " A " block. But this argument of the petitioner did not find favour with the appropriate authority. The appropriate authority in coming to the conclusion that the apparent sale consideration of the subject property was less as compared to the fair market price thereof by 15 per cent., another s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 648 of 1985 was filed by Bisham Dev Jaidka for partition claiming 1/4th share in the properties left behind by Shri H. R. Jaidka. In the suit, Smt. Durga Rani, widow of Shri H. R. Jaidka, Rameshwar Rai Jaidka, Brij Bhushan Jaidka, Rajinder Kumar Jaidka, all sons of H. R. Jaidka as also Smt. Shakuntala Bhalla, daughter of Shri H. R. Jaidka, were arrayed as defendants. Apart from A-2, Defence Colony, there were two other properties which were also the subject-matter of the partition suit. While proceedings were pending all the four brothers including the plaintiff executed two agreements to sell dated July 31, 1992, in respect of A-2, Defence Colony, one in favour of Shri J. D. Gulati and the other in favour of Smt. Sunita Gulati. In the suit, the parties entered into a compromise on October 1, 1992. According to the terms of the compromise, to which Bhisham Dev Jaidka (plaintiff), Rameshwar Rai Jaidka, Brij Bhushan Jaidka, Rajinder Kumar Jaidka and Smt. Shakuntala Bhalla, defendants were parties, A-2, Defence Colony, fell to the share of four brothers. The appropriate authority while giving no objection to the sale of A-2, Defence Colony, compared with A-20, Defence Colony, having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. lower than the fair market price. Even if disadvantage due to joint sharing is ignored, the value of A-2, Defence Colony, would work out to be 13.50 per cent. (8.50 per cent. + 5 per cent.) which again being below the fair market price would still qualify for being cleared as the apparent value would not be lower than the fair market value by 15 per cent. Learned counsel for the petitioner also found fault with discounting the value of the property by two per cent. being in close proximity of the railway line. One per cent. for being near a gas depot and two per cent. for being near a taxi stand. A perusal of the writ petition further shows that the petitioner did not specifically raise any objection with regard to the discounting of the value of the property by five per cent. on account of being in joint ownership and two per cent. being near a taxi stand and two per cent. being near a gas depot. The appropriate authority does not appear to be wrong in considering the property to be at a disadvantage while considering its value for it being near a railway line, taxi stand and gas depot. It is a matter of common knowledge that the building near a railway line causes lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority. It is well-settled that judicial review under article 226 is not of the decision rendered by an authority but is of the decision-making process. In H. B. Gandhi, Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath and Sons [1990] 77 STC 1 ; [1992] Suppl. 2 SCC 312, at page 317. The Supreme Court defining the scope of judicial review held as follows (page 6 of 77 STC) : " 8. But here what was assailed was the correctness of findings as if before an appellate forum. Judicial review, it is trite, is not directed against the decision but is confined to the decision-making process. Judicial review cannot extend to the examination of the correctness or reasonableness of a decision as a matter of fact. The purpose of judicial review is to ensure that the individual receives fair treatment and not to ensure that the authority after according fair treatment reaches, on a matter which it is authorised by law to decide, a conclusion which is correct in the eyes of the court. Judicial review is not an appeal from a decision but a review of the manner in which the decision is made. It will be erroneous to think that the court sits in judgment not only on the correctne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the relevance of the factors. . . ." In State of West Bengal v. Atul Krishna Shaw, AIR 1990 SC 2205, the Supreme Court held that judicial review is not an appeal from a decision but a review of the manner in which the decision was arrived at. It was further held that the High Court by a process of judicial review cannot appreciate the evidence and record its own findings of fact. In this regard, it was observed (at page 2208) : " 7. Admittedly the High Court did not go into any of the questions raised by the appellant in the writ petition. It summarily dismissed the writ petition. Therefore, what we have to read is only the orders of the Appellate Tribunal and the Asstt. Settlement Officer---the primary authority together with the record of evidence. Counsel took us through the evidence to show that the findings recorded by the appellate judge are based on either no evidence or surmises and conjectures. We have given our anxious consideration to the respective contentions and considered the evidence on record once again. It is indisputably true that it is a quasi-judicial proceeding. If the appellate authority had appreciated the evidence on record and recorded the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the Government comparable instances of sale, which provide an index of its market value, can be taken into consideration, subject, of course, to certain adjustments, dependent upon the various factors, namely, the time factor, that is to say, the point of time when the land was sold, and the situation factor, that is to say, the location of the land, etc. The balance-sheet of plus and minus factors can be drawn up for this purpose and the relevant factors evaluated to determine the fair market price of the land. In Chimanlal Hargovinddas v. Special Land Acquisition Officer, AIR 1988 SC 1652, the Supreme Court laid down the broad guidelines for determining the market value of the land under acquisition. In this regard, it was held as follows (at page 1656) : " 3. Before tackling the problem of valuation of the land under acquisition it is necessary to make some general observations. The compulsion to do so has arisen as the trial court has virtually treated the award rendered by the Land Acquisition Officer as a judgment under appeal and has evinced unawareness of the methodology for valuation to some extent. The true position therefore requires to be capsulized. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if they are very proximate, (2) genuine, and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects. (10) The most comparable instances out of the genuine instances have to be identified on the following considerations : (i) proximity from time angle ; (ii) proximity from situation angle. (11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis-a-vis, land under acquisition by placing the two in juxtaposition. (12) A balance-sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do. (13) The market value of the land under acquisition has thereafter to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors. (14) The exercise indicated in clauses (11) to (13) has to be undertaken in a common sense manner as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale of the immovable property in the locality. The price at which such sales were effected can be taken as the standard or measure of the market value subject to suitable adjustment of plus and minus factors. A chart of plus, minus factors as laid down by the Supreme Court can be drawn up for this purpose and adjustments can be made accordingly. Therefore, having regard to the decision of the Supreme Court in Chimanlal's case, AIR 1988 SC 1652, the appropriate authority was right in taking plus, minus factors for arriving at the market value of the property in question. Mr. Rajendra, learned counsel for the respondents, drew my attention to the method of pricing of the plots by various builders. He also invited my attention to the advertisements issued by them. These advertisements show that the builders are taking into consideration the situation of the plot for fixing its price. For a corner plot or plot facing a part or plot having three sides open or a plot having other advantages, the price is higher in comparison to the plots not having such facilities. Therefore, evaluating the price of a plot by taking into consideration the aforesaid plus minus factors is an acceptab ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
