INSPECTING ASSISTANT COMMISSIONER OF INCOME TAX Vs. NAND KISHORE SINGH

JUDGEMENT

(1.) THIS is an appeal by the IAC, Acquisition Range, Patna, the Competent Authority under Section 269H (Chap. XX-A) of the LT. Act, 1961.

(2.) LAND measuring more or less 0.53 acres, equivalent to 171/2 kathas, with a double storeyed building (plinth area 8,670 sq. ft.) and outhouses (plinth area 1,350 sq. ft.), situated on the crossing of Dak Bungalow Road and Sinha Library Road, one of the most important areas in the town of Patna, was sold by Kumar Tara Nand Sinha and his four brothers to Shri Nand Kishore Singh and seven others for an apparent consideration of Rs. 2,75,000 under a sale deed No. 11372 which was registered at Patna on August 16, 1973. An information to this effect was received by the Competent Authority in Form No. 37G in Januany, 1974, from the registering authority. The Competent Authority directed his inspector to make a local enquiry and report about the fair market value of the property. The inspector submitted his report on January 16, 1974. According to the inspector, the fair market value of the property in question was Rs. 8,70,000 approximately which was very much higher than the apparent consideration, shown in the transfer document. The Competent Authority, therefore, initiated a proceeding for acquisition of this property under Chap. XX-A of the I.T. Act, 1961, on January 16, 1974. On January 31, 1974, notices under Section 269D(1) in English and in Hindi were issued for publication in the Official Gazette of India, Pt. III, Section 1, which was published in the Official Weekly Gazette of India, dated May 18, 1974. Notice was also served upon Kumar Tara Nand Sinha, one of the transferors and Shri Nand Kishore Singh and seven other transferors, in accordance with the manner prescribed in the Act. The matter was referred to the Valuation Officer of the Valuation Cell, I.T. Department, Patna, under Section 269D(1)(a) of the Act, requiring him to determine the fair market value of the property. On April 26, 1974, separate written objections were received from each of the transferees. The main objection was that there was no under-valuation in the transfer of land and there was no difference between the fair market value and the sale price shown in the transfer document. They objected to the valuation made by the Valuation Officer as being arbitrary, wrong and without any basis and asserted that the average price of land could not exceed Rs. 13 to 14 thousand per katha. The objectors also filed a valuation report from a private valuer, namely, Shri Brajbans Prasad, according to which the value of the property could not exceed Rs. 2,96,000. After considering the objections raised by the transferees and other materials on record, the Competent Authority overruled those objections and found that on a rough estimate the average rate of Rs. 40,000 per katha for the land was quite fair. Except the question regarding valuation, no other objection was raised on behalf of the transferees. The Competent Authority was satisfied that the fair market value of the property exceeded the apparent consideration therefor by more than 15 per cent. of such apparent consideration and the real consideration for transfer as agreed to between the parties had not been truly stated in the instrument of transfer. After obtaining the approval of the Commissioner of Income-tax I, Bihar, Patna, as required by Section 269F(6) of the Act, the Competent Authority passed an order for acquisition of the above-mentioned immovable property under Chap. XX-A of the Act, by his order dated October 8, 1974.

(3.) THE present appeal has been filed as mentioned above by the IAC, Acquisition Range, Patna, Competent Authority, under Section 269H of the Act, against the order of the Appellate Tribunal, dated March 7, 1975.