TMI Blog1982 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... low : --------------------------------------------------------------------------------------------------------------------------------------------------- Assessee Retained lands Surplus lands Total acres --------------------------------------------------------------------------------------------------------------------------------------------------- Wet Dry Wet Dry Wet Dry lands lands lands lands lands lands --------------------------------------------------------------------------------------------------------------------------------------------------- K S. Ranganatha 14-82 28-19 102-89 ------ 117.71 28.19 Mudaliar K. S. Bakthavatsala 28-40 15-00 114-80 ------- 143-20 15-00 Mudaliar K. S Rajagopala 20-74 23-00 48-90 0-42 69-64 23-42 Mudaliar K. S. Srinivasan, Minor 21-67 3-93 59-59 ------ 81-26 3-93 K. S. Vasudava Mudaliar 22-82 4-35 105-38 27-45 128-20 31-80 --------------------------------------------------------------------------------------------------------------------------------------------------- The WTO valued all the lands within the holding of each of the assessees at the rate of Rs. 3,000 per acre for wet lands and at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and who alone will be able to purchase large areas of land as in this case and that, therefore, the market value in the case of retained lands cannot be equated to the market value of the lands in excess of the ceiling. In this view, the Tribunal upheld the orders of the AAC. Aggrieved by the decision of the Tribunal, the Revenue sought and obtained a reference to this court on the question set out above. According to the learned counsel for the Revenue, the WTO while valuing the lands has to proceed only on the basis of s. 7 of the W.T. Act without reference to the provisions of the Ceiling Act, that he is not bound to accept the compensation fixed by the Government for the excess lands as the basis for fixing the value of the lands under the W. T. Act and that, in this case, both the AAC and the Tribunal had erred in valuing the excess lands at the compensatory value fixed by the State Government. It is contended that, on behalf of the Revenue, relying on the decisions of the Supreme Court in Ahmed G. H. Ariff v. CWT [1970] 76 ITR 471 and Purushottam N. Amarsey v. CWT [1973] 88 ITR 417, that when the statute uses the words " if sold in open market" in s. 7(1) of the W.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e they will fetch in the market will have to be taken into account as per the provisions of s. 7 of the W.T. Act. But even as per that decision, the further question is whether the restrictions contained in the Ceiling Act will have to be taken note of for giving due allowance in the price of the lands in view of the depressing effect those restrictions will have on the market price. It cannot be disputed that the restrictions and prohibitions will have the effect of depressing the value which the lands would fetch if they were free from the said restrictions and prohibitions. Though we, have to assume a market for the lands, in determining the market value of the lands, the restrictions and prohibitions contained in the Ceiling Act have to be taken note of and the value of the lands with all these restrictions and prohibitions should have to, be determined. If we ignore the restrictions and prohibitions contained in the Ceiling Act in valuing the excess lands, then that would be valuing an asset differently in content and quality from that actually owned by the assessees. We are, therefore, of the view that all the lands have to be valued only after taking note of the restrictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point of enquiry how far these restrictions affect the value and the property cannot be valued as if it were " unrestricted in any way". In Khorshed Shapoor Chenai v. Asst. CED [1980] 122 ITR 21 (SC), which was a case arising under the E.D. Act, the Supreme Court held where the assessee's land has been acquired under the Land Acquisition Act, the assessing authority will have to estimate the value of the property acquired having regard to its peculiar nature, its marketability and the surrounding circumstances including the risk or hazard of litigation looming large at the relevant date. According to the learned counsel for the Revenue, the AAC as well as the Tribunal have fixed the value for the excess lands taking into account the compensation that would be awarded by the State Government under the provisions of Schedule III to the Act and not on the basis of the open market price after allowing a discount for the restrictions and prohibitions contained in the Ceiling Act. The value fixed by the Government for the lands can be taken as a replacement value for the asset in question which can be taken as the approximate market value of the lands as depressed in view of the restr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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