Law:

Section:

Section 269C of the income-tax act, 1961-Acquisition of immovable property-transferor sold to two transferees fully developed and tenanted property for Rs. 1,80,000-Departmental valuation officer valued it at Rs. 2,73,000 by applying rental method for estimated life of buildings and adding reversionary value of land-Competent authority passed acquisition order on basis of valuation report-Tribunal held valuation method adopted was bad in law and set aside acquisition order-Whether tribunal justified in law-Held, on facts, yes Facts By a conveyance deed, dated 4-4-1973, the transferor sold to the transferees for Rs. 1,80,000 a certain premises in Calcutta, having a approximate total area of 1 bigha 5 cottahs. On 3-8-1973, the competent authority referred the matter under section 269L(1)(a) to the Valuation Officer to determine the fair market value of the said property. In his report, the Valuation Officer submitted (i) that the buildings were more than 100 years old and their estimated future life was 25 years; (ii) that the buildings were let out to 14 tenants at an aggregate rent of Rs. 1,176 per month; (iii) that the property was ideal for construction of a multi-storied building and must have been purchased by the transferees for that purpose; (iv ) that the appropriate value of the said property would be the value of the land plus the break-up value of the buildingminus the amount of compensation payable to tenants on their removal; and (v) that as there was no approved rate for such compensation and in view of the restrictions under the Rent Control Act, the property had been valued by applying the rental method for the expected future life of the building and adding thereto the reversionary value of the land. The value of the property was, thus, determined at Rs. 2,73,000. In determining the market value of the land for the purpose of determining its reversionary value, the Valuation Officer took into consideration the sale price of a vacant plot of land in another locality on 29-8-1964. On the basis of this report, the competent authority initiated proceedings under section 269C on 29-9-1973 for acquisition of the said property and notices under section…

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