TMI Blog1980 (4) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... tuated at 18, Tilak Marg (earlier known as 18, Harding Avenue), New Delhi, and the other at C-Block, Connaught Place, New Delhi. The value of these properties was shown as Rs. 4,56,906. In these writ petitions, we are concerned only with the property situated at 18, Tilak Marg, New Delhi, the value of which was indicated at Rs. 1,19,406 in the return. This value was duly supported by the report of an approved valuer dated 25th February, 1969. The WTO completed the assessment for 1968-69 on 20th November, 1969, and accepted the value of the said property, as above indicated. Sometime in April, 1975, the petitioner applied for a tax clearance certificate under s. 230A(1) of the I.T. Act, 1961, with a view to effecting sale of the said property. A certificate was issued on 25th June, 1975, by the ITO after directing the petitioner to furnish a bank guarantee to the tune of Rs. 1,50,000 to cover the tax in respect of capital gains that might arise on the proposed sale of the property. On 2nd September, 1975, the petitioner received notices issued by the WTO under s. 17 of the Act dated 25th August, 1975, proposing to start reassessment proceedings. A request was also made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. As a result, it was felt that the petitioner would surely be getting net value of Rs. 5,00,000 for the property. As the petitioner was contesting the demand of the Land and Development Officer, it was submitted that the amount might even be larger. If the value of the property on or about 2nd April, 1975, was at least Rs. 5,00,000, then it could not be so low as Rs. 1,25,000 or Rs. 1,19,406 as declared or finally determined for the assessment years 1968-69 to 1974-75. It was also stated in the said affidavit that the property was located opposite the Supreme Court Building and could not have had such an extremely low market value. Further, the adjoining property at 6, Tilak Marg, New Delhi, had been sold for Rs. 14,42,895 on 18th December, 1970. In the course of the proceedings under s. 230A(1) of the I.T. Act, 1961, the assessee had claimed the market value of the property to be Rs. 2,00,000 as on 1st January, 1954, for the purpose of working out the estimated capital gains. He had estimated the capital gains at Rs. 1,00,000 as, according to the sale deed, he was to get Rs. 5,00,000 if property was vacant or Rs. 3,00,000 otherwise, if the property was tenanted. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000. For the assessment year 1962-63, the WTO adopted the value of the property at Rs. 1,50,000 as against the declared value of Rs. 1,25,000. Once again, on appeal, the AAC reduced it to Rs. 1,25,000, i.e., the value as declared in the return. Thereafter, for the assessment years 1964-65 to 1967-68, the value declared in the return, i.e., Rs. 1,25,000, was duly accepted by the WTO. It is clear from the reasons recorded by respondent No. 1, before issuing the notice, that the main reason for issuing the notice was because of the agreement to sell the property to the Iranian Embassy at Rs. 27,65,825. This fact, though material, came into existence some time in early 1975. It was an agreement for a proposed sale and was not fact known or contemplated by the petitioner at the time of the original assessments. At the relevant time, it did not exist. That there cannot be omission or failure to disclose a non-existent fact is a proposition too obvious to be stated. The question next posed is whether the fact of the agreement to sell to the Iranian Embassy amounts to an information which would come within the ambit of s. 17(1)(b) of the Act. It would appear that the agreement to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be issued. Since s. 17(1)(b) requires the notices to be served within four years of the end of the assessment year, we hold that the notices for the assessment years 1971-72 to 1974-75 can be treated as notices under s. 17(1)(b) of the Act. It was next contended by learned counsel for the petitioner, that no net wealth chargeable to tax has escaped assessment. He submits that the land and building method was adopted by the valuer whose report was placed before the WTO in the particular years. It was stated therein that the land under the master plan fell within the institutional area and as such had a lower value than that of residential or commercial areas. The market price of the land was, therefore, valued at Rs. 1,50,000 per acre and the amount of Rs. 3,75,000 was indicated for 2.5 acres. As 75 per cent. of the difference in the present price of the land over the original premium paid of Rs. 875 would have to be given to the Government, this was estimated at Rs. 2,80,594 and a net balance of Rs. 94,406 resulted. With regard to the value of the building on the said land, it was indicated that this was in a very dilapidated condition due to lack of maintenance and it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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