K.C. Agrawal, J. - (1.) THESE two appeals under Section 269H of the I.T. Act have been preferred by the Commissioner of Income-tax, Kanpur, against the judgment of the Income-tax Appellate Tribunal, dated 20th January, 1975, setting aside the acquisition of house No 112/331-332, Swarupnagar, Kanpur, and the plot measuring 347 sq. yards. This property, which belonged to one Om Prakash Gupta, was sold under two sale deeds dated 23rd July, 1973, to Asharfi Lal Gupta and his wife, Smt. Phoolmati, for Rs. 30,000 each. It consisted of a double storeyed building and a plot measuring 347 sq. yds.
(2.) THE Sub-Registrar sent an information in Form No. 37G of the I.T. Rules in respect of this property to the departmental authorities Upon the receipt of this report by the competent authority, the ITO was asked to make an enquiry on the spot. After making enquiry, he estimated the market value of this property as on the date of transfer to be Rs. 48,000. THE competent authority, thereafter, referred the matter under Section 269L of the Act to the Valuation Officer at Kanpur. THE Valuation Officer estimated the value at Rs. 50,050 on the basis of the land and building method and at Rs. 49,000 on yield and rental method. For the other portion, which was sold to Smt. Phoolmati, the valuation estimated was at Rs. 49,800. Upon being satisfied and after recording reasons under Section 296G of the I.T. Act, the competent authority initiated proceedings for acquisition. THE reasons given by the competent authority were : (i) that the fair market value of the property was between Rs. 49,000 and Rs. 49,800 ; (ii) that the fair market value exceeded the apparent consideration by more than 15% ; (iii) that the consideration for the property had not been truly stated in the transfer deed with the object of facilitating the reduction or evasion of tax including capital gains. Consequently, a notice under Section 269D(1) of the I.T. Act was issued to the transferor and the transferees. The transferor, Om Prakash Gupta, did not file any objection. Asharfi Lal Gupta and Smt. Phoolmati filed two separate objections along with their affidavits stating that the consideration paid was equal to the fair market value and, as such, the proceedings taken under Section 269C(I) were liable to be set aside. The competent authority held that the consideration for which each one of the two properties had been sold had not been truly stated and that both the portions of the said property were liable to be acquired. According to his finding, the fair market value exceeded the apparent consideration by 63.3% in one case and 66% in the other. Holding that all the conditions prescribed under Section 269F(6) of the I.T. Act were fulfilled, the competent authority made an order for acquisition under Chap. XX-A of the I.T. Act. The acquisition proposed was in respect of both the portions of the aforesaid house.
(3.) AGGRIEVED against the aforesaid two judgments, Asharfi Lal Gupta filed Appeal No. 1 of 1974 before the Income-tax Appellate Tribunal whereas Appeal No. 2 of 1974 was filed by his wife, Smt. Phoolmati. Both these appeals were decided by the common judgment dated 20th January, 1975, and the acquisition order by the competent authority was set aside. The first question that arises for consideration in the instant case is about the valuation of the two portions of the house in question regarding which the notice under Section 269D(1) of the I.T. Act had been issued. We have found above that the two portions of the house in dispute were sold separately to Asharfi Lal Gupta and his wife, Smt. Phoolmati Gupta. The Income-tax Appellate Tribunal found that Asharfi Lal Gupta's portion had been let out at a monthly rent of Rs. 455 whereas the portion sold to Smt. Phoolmati could be let out at Rs. 415 per month. Applying the multiple of 11.635 and allowing the deductions, the Income-tax Appellate Tribunal held that the valuation of the house sold to Ashar6 Lal Gupta was Rs. 37,616 whereas the value of the portion sold to Smt. Phoolmati was Rs. 34,276. The valuation of the aforesaid two portions is given below : JUDGEMENT_765_ITR142_1983Html1.htm ;