TMI Blog1987 (10) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... lude the reversionary value of the land up to the year 1994 and beyond. Since these premises had been leases out to tenant, it was not open to the CWT (A) to include the reversionary value particularly in view of the fact that the tenant would be fully protected from eviction under the Bombay Rent Act. 2. Certain facts may briefly be stated. Dr. A. Gomes and Mr. B. Gomes had equal share in certain properties situated at Versova, Mogra, Amboli, Andheri, Bandivali, Juhu, Oshivara, Kevnigaothan, Caesar Road, Goregaon and Kapasi. The details of the area, the valuation by the assessees as on 31-3-1980 and 31-3-1979, the valuation adopted by the WTO on the basis of D. V. O. and that adopted by the CWT(A) as on 31-3-1980 in brief are as under : ----------------------------------------------------------------------------------------------- Details of area Valuation by assessees Valuation by WTO on Valuation as adopted as on 31-3-1980 the basis of DVO by CWT(A) as on 31-3-3-1979 31-3-1980 ----------------------------------------------------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Mukherji argued that the CWT (A) had completely ignored the legal effect of the ULC Act. Under sec. 3 of the ULC Act, persons were to entitled to hold vacant land in excess of the ceiling limit. Under sec. 6 of the ULC Act, the holders of vacant property were required to file statements of their vacant lands and under sec. 8 the competent authority is required to prepare a draft statement setting out what vacant lands are in possession of each holder. A notification was made on 30-6-1977 under sec. 10(1) of the ULC Act. Section 10(1) of the Act reads as under : "10. Acquisition of vacant land in excess of ceiling limit. - (1) As soon as may be after the service of the statement under sec. 9 on the person concerned, the competent authority shall cause a notification giving the particulars of the vacant land held by such person in excess of the ceiling limit and stating that - (i) such vacant land is to be acquired by the concerned State Government; and (ii) the claim of all persons interests in such vacant land may be made by them personally or by their agents giving particulars of the nature of their interests in such land, to be published for information of the general pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lloyd Enterprises 2,00,000 Amboli 50/10 1-3-80 Lloyd Enterprises 75,000 " 76/1 23-2-81 S. S. Pol Others 3,00,000 " 55/4 2-8-81 Mr. S. S. Pol Others 29,000 " 55/1 12-8-81 -do- 9,000 " 44B/5 -do- -do- 15,000 " 39/7 -do- -do- 3,000 Amboli Andheri(W) 67A/1/3 -do- -do- 8,000 " 73/6 -do- -do- 6,000 Amboli Pardi Pardi 8/1 2 -do- -do- 9,000 Andheri (W) Caesar Rd. C.T.S. 578 -do- -do- 72,000 near Church Amboli, Andheri (W) Bombay - 58. Bandivali 41, 42 8/4B, 3 -do- -do- 27,000 (Jogeshwari) Rly. Station - -do- -d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds occupied by hutment dwellers had also gone down in value inasmuch as the right of such trespassers became absolute after 12 years in view of the provisions of the Limitation Act. He pointed out that a Valuation Officer's estimate of the time taken in the legal proceedings for evicting such hutment dwellers showed his complete ignorance of realities. 6. The third limb of Shri Mukherji's argument, concerned the property at Juhu bearing Survey No. 26, Hissa No. 1. In this regard, Shri Mukherji pointed out that this property was leased out to Burmah Shell and argued that the provisions of section 5(11) (b) of the Bombay Rent Act would apply and, therefore, the assessees would not be able to eject the present tenants from occupation of these plots even after the expiry of the present lease in the year 1994. He drew our attention to section 12(1) of the Bombay Rent Act which provided that a landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observe and perform the other conditions of tenancy. He also drew our attention to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in the case of Smt. Rubabbai Inayat Hussain v. WTO [1983] 5 ITD 526. The same argument was advanced by Shri Mukherji in respect of the valuation of the property at S. V. Road bearing CTS No. 23. Here also, he argued that the Valuation Officer.was not justified in making a separate addition on account of the deferred value of the land. He further argued that the valuation should be done by capitalising the net return at 10 to 11 per cent. He admitted that this property was sold on 20-11-1980 for Rs. 4,50,000 but this date was much later than the relevant valuation date. In respect of properties at Caesar Road (CTS No. 578) and Kevnigaothan, Shri Mukheriji argued that rule 1BB should be applied. 7. We have now to consider the CWT (Appeals)'s orders for the years under appeal in the light of the various submissions made in respect of the different properties. It would appear from the details of immovable properties given by Shri Mukherji that there are nearly 14 different properties (inclusive of properties at Amboli village) and we have to classify them according to their characteristics. Some of these properties undoubtedly are affected by the provisions of the ULC Act. Some o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry value of land cannot be separately added. In this regard, the contentions raised by the Sr. Departmental Representative in the departmental appeals are rejected. The valuation of such properties for earlier years will have to be fixed with reference to the sale price realised by the assessee at a later date. Sixthly, we would hold that the rate of capitalisation in respect of rented properties should be adopted at 8 per cent and of leasehold land at 6 1/2 per cent which is the rate mentioned in rule 1BB and which can be considered having regard to all the circumstances of the case as a reasonable rate of yield in such cases. In the light of the principles laid down above, we have to decide how the valuation of different lands should have been done by the authorities below. We find that the assessees themselves have declared this value for the assessment year 1979-80. So far as assessment years 1977-78 and 1978-79 are concerned, we would take into account the total area of the land which is 11,625 sq. meters. We find that under section 11 of the ULC Act, the maximum price that the State Government could pay is Rs. 10 per sq. meter in the case of vacant land situated in an urban a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty at Rs. 3,98,000 for assessment year 1977-78 and Rs. 4,68,000 for assessment year 1978-79. The assessees themselves have declared the value of the property at Rs. 1,16,200 as on 31-3-1980 and 31-3-1981, whereas the D. V. O. has valued the property at Rs. 5,47,000 for the year ended 31-3-1981. The CWT (Appeals) have valued the property at Rs. 1,60,000 as on 31-3-1980 and at Rs. 1,50,000 for earlier years. Although it was argued before us that it is an agricultural land which qualifies for exemption under section 5(1) and that it is a surplus land notified as such under section 10 of the ULC Act and further that it consisted of land-locked marshy land which had no access, we find that the land was sold with the occupants on 'as is where is' basis to M/s. Kopotra Builders for Rs. 1,60,200 in terms of agreement for development dated 31-3-1979. The collective effect of these factors has to be taken into account. Under section 11 of the ULC Act, the maximum price that the State Government could pay in the case of a vacant land situated in urban agglomeration is Rs. 10 per sq. metre. Having regard to this rate of compensation, the assessee could expect to get at least Rs. 1,16,254 in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his property is in possession of tenants and the tenants cannot either be evicted or rent payable by them enhanced except in accordance with the provisions of the Rent Control Act or the Bombay Tenancy Act. We do not agree with the D. V. O. that the tenants who are occupying this land can be evicted in a period of 5 years and the deferred value that he has arrived on these two plots of land at Rs. 3,47,290 and Rs. 2,78,201 for the first plot and Rs. 3,000 and Rs. 3,375 for the second plot is without regard to the realities. Normally, rent capitalisation would provide the best guide for valuing these lands for the earlier two years if it is established that the tenants occupying these lands are governed by the Bombay Rent Control Act. But that is not the case here. The property is governed by the Bombay Tenancy and Agricultural Land Act. The sale instances quoted by the D. V. O. are of properties which are not hit by the provisions of the ULC Act and therefore not comparable. Taking all these factors into account, we would confirm the valuation put by the CWT (Appeals) on these properties at Rs. 1,50,000 for the assessment years 1977-78 and 1978-79. 9.3 As regards the plot No. 22/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,979 for the assessment year 1977-78 and Rs. 82,800 for the assessment year 1978-79 by the assessees' valuer and at Rs. 2,19,000 and Rs. 2,99,000 by the Departmental Valuation Officer It has fetched as much as Rs. 4,50,000 along with another property situated at Caesar Road, Andheri. CWT (Appeals) has valued this property at Rs. 2,19,000 for the assessment year 1978-79 and Rs. 4,25,000 for the assessment year 1980-81. There are 8 tenants on this property. The D. V. O. has valued this property at Rs. 3,83,000 as on 31-3-1979 and Rs. 4,11,000 as on 31-3-1980. CWT (A) has dealt with this issue at pages 18-20 of his order. All the arguments that have been raised before us were raised before the CWT (A) and he has summarized them in his order and rejected them. We agree with the CWT (A) that the Valuation Officer has been very reasonable in valuing this property at Rs. 2,19,000 as on 31-3-1977. The total built up area of this property is just 680 sq. metres and unutilized balance of 1,240 sq. metres was available for the assessees' use. CWT (A) found that the instance of sale cited by the Valuation Officer in Annexure 1 and in particular instance No. 3 of his report of sale of plot No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the further argument that the period of lease being long (98 years), there was security of return in respect of lease rent and therefore the rate of capitalisation of 6 1/2 per cent was reasonable. CWT (A) also has given a proper discount on account of joint ownership. Therefore, the valuation put by the CWT (A) at Rs. 3,92,697 on this land for all the years is also confirmed. 9.7 The next property for consideration is the one situated at Juhu Village, Juhu Tara Road, Santa Cruz. This property is indicated by Survey No. 26 and admeasures 8,551 sq. yds. This property has been leased out to Bharat Petroleum, a Govt. of India Undertaking, from 20-8-1957. Its value was shown at Rs. 1,39,770 for assessment year 1977-78 and at Rs. 1,02,600 for assessment year 1978-79. The D. V. O. valued this property at Rs. 16,02,000 for assessment year 1977-78 and Rs. 18,94,000 for assessment year 1978-79. CWT (A) valued it at Rs. 8,55,000 for all the four years. In respect of this property, Shri Mukherji argued that 70 per cent of the total area was declared as surplus land in the hands of the assessees by a notification under section 10 of the ULC Act. He pleaded that the whole of the property has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e terms and conditions. This is therefore a leased out property of which valuation has to be made. The lease was taken as far back as in 1957 and the lessee even now continues to be in possession of the property. As we have already indicated in the preceding paragraphs, one cannot determine reversionary value of land in properties of this type in view of the decision of the Calcutta High Court in Smt. Ashima Sinha's case. The concept of land value in reversion will have no place in Bombay where the Rent Control Act prevails. In the case of Sudesh Chandra Talwar, the Calcutta High Court observed that in order to arrive at a valuation in respect of the property there must certainly be a certain element of guess but the guess must be based on certain facts and according to certain principles which would be on the facts and circumstances of the case as fair to the revenue as to the assessee. The High Court took note of its earlier decision in the case of Smt. Ashima Sinha and made the following observations at page 492 : "Under the WT Act, section 7, it is the duty of the WTO to form his opinion as to what be the market value of the property on the relevant date. The submission of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e principle of valuation in a property of this type. The revaluation of the Juhu property will be carried out by the WTO for all the years under appeal as per the directions given above. 9.9 The last property is the property at Oshiwara Village, Jogeshwari. This property admeasures 32,381 sq. yds. It consists of 11 different plots of land which, according to the assessees' counsel, have been declared surplus and notified under section 10 of the ULC Act. Here also, the land situated at Sr. No. 17/1A is adversely possessed. All other lands are reserved for Maharashtra Housing Board. It would appear that this property was sold to Mr. Pol for Rs. 2 lakhs on 'as is where is' basis in terms of agreement dated 19-2-1981. The DVO has valued this land at Rs. 2,89,000 and Rs. 2,99,000 for the assessment years 1977-78 and 1978-79 and the CWT (A) has valued it at Rs. 2,89,000 for assessment years 1977-78, 1978-79 and 1979-80 and at Rs. 3,08,000 for 1980-81. It was Shri Mukherji's contention that, in any case, the land should not be valued at anything more than what it actually fetched. The CWT (A) confirmed the rate of Rs. 9 per sq. yard in respect of this land as taken by the Valuation Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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