TMI Blog1979 (2) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... deed of conveyance in respect of the said property and obtained possession from the vendors. On the 23rd April, 1973, the respondent No. 1 issued notice under s. 269D(1) of the I.T. Act, 1961, for the purpose of acquisition of the said property. Thereupon, the petitioners on 12th June, 1973, had filed objection to the said notice and the respondent No. 1 issued notice on the 9th/10th April, 1974, fixing the date of hearing of the objection on the 25th April, 1974. Thereafter, on the 19th/20th August, 1974, the respondent No. 1 issued a letter enclosing a copy of the valuation report made by the Valuation Officer for the department and fixing the date of hearing of the objection of the petitioner on the 29th August, 1974. The said valuation report is undated. The property was inspected, it appears, from the report by the said Valuation Officer on the 22nd May 1974. In this application, under art. 226 of the Constitution, moved on the 6th September, 1974, the petitioners challenge the said proceedings and the initiation of the said proceedings. There are various grounds taken in this petition. It was contended that Chap. XX-A containing ss. 269A to 269S was unconstitutional as thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or Any monies or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-tax Act, 1922 (XI of 1922), or this Act or the Wealth-tax Act, 1957 (XXVII of 1957), the competent authority may, subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter : Provided that before initiating such proceedings, the competent authority shall record his reasons for doing so : Provided further that no such proceedings shall be initiated unless the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration therefor by more than fifteen per cent. of such apparent consideration. (2) In any proceedings under this Chapter in respect of any immovable property,-- (a) where the fair market value of such property exceeds the apparent consideration therefor by more than twenty five per cent. of such apparent consideration, it shall be conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer ; (b) where the property has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for such transfer, as agreed to between the parties, had not been truly stated in the instrument of transfer with the object of either facilitating the reduction or evasion of liability of the transferor to pay tax under this Act in respect of any income arising from the transfer or for facilitating the concealment of any income or any money or other asset which had not been or which ought to have been disclosed by the transferee for the purpose of the Indian I.T. Act, 1922, or this Act or the W.T. Act, 1957. It is also necessary that no proceedings shall be initiated unless the anthority has reason to believe and there are materials for such belief to be formed that the market value of the property exceeded the apparent consideration therefor by more than fifteen per cent. of such apparent consideration. Now, in this case, according to the petitioners, there was no material for the fulfilment of the conditions precedent required. The recorded reasons have been annexed to the petition which only comply with the terms of the section. But the reasons have really been explained in the affidavit filed on behalf of the respondents by one Sailesh Kumar Chakraborty, the IAC. In para. 10 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o business houses and has used the expression " partly used for dwelling house purpose ". He has not stated whether it is partly used for dwelling house purpose by the tenants as such or by the transferor as such. The IAC has recorded that there was a report that cost of land in Burrabazar area was between Rs. 60,000 and Rs. 80,000 per cottah. But since the land in question was situated inside a lane, he estimated the value of the land at the rate of Rs. 30,000 per cottah. On this basis, he estimated the total value of land only at Rs. 2 lakhs. But the apparent consideration, that is to say, the consideration indicated in the document, was Rs. 1,35,000. He, therefore, came to the conclusion that the real consideration exceeded more than 25%. On this basis, and on this basis alone, he had initiated proceedings. According to the valuation report of the petitioners, the value of the premises in question, which he has valued on the rental basis, because the entirety of the premises in question was let out to tenants, was Rs. 1,32,000. According to the valuation report of the Valuation Officer, appointed by the income-tax department, who inspected the premises in question, the value cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a particular purchaser or to a particular person is not the fair market value of the property. A particular purchaser or a particular tenant may have a particular value for the property. But, in respect of the entirety of the tenanted premises, that value to the particular tenant may be different from the fair market value and for the purpose of this section one has to proceed on the basis of fair market value, that is to say, the value which a tenanted premises would fetch in open market and on that basis the fact that the entirety of the premises was tenanted was a factor relevant in determining whether there has been under-valuation and that factor does not seem to have entered into the consideration of the IAC before initiation of the proceeding. Apart from this, the IAC must have before him material that the fair market value had not been stated either in order to facilitate the reduction or evasion of liability of the transferor to pay tax under the Act or for facilitating the concealment of any income or any moneys or other assets as contemplated under cl. (b) of s. 269C(1). The evidentiary value of presumptions which sub-s. (2) of s. 269 postulates are not attracted at th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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