SORABJI D MEDORA Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) IN this reference made under section 64(1) of the Estate Duty Act, 1953, the Income -tax Appellate Tribunal has referred the following four questions to this court for its opinion :

(2.) SORABJI D. Medora owned properties. The properties with which we are concerned in this reference are Jamsie Villa situated on the Ashram Road, Ahmedabad, and lands bearing Survey Nos. 39, 72, 74, 75, 76 and 77 of Ghodasar village. He had a one -fifth share in Jamsie Villa. He died on August 8, 1968. It appears that the accountable persons filed a statement and in that statement, the value of the entire bungalow known as Jamsie Villa was shown at Rs. 5,29,800. The value of the deceased's one -fifth share was shown at Rs. 1,06,000. The value of the lands bearing Survey Nos. 74, 75 and 76 was shown at Rs. 18,000 and the value of the lands bearing Survey Nos. 72 and 77 situated at Paldi and Shahwadi was shown at Rs. 15,000. The value of the land bearing Survey No. 39 was shown at Rs. 3,000. The Assistant Controller did not accept the valuation put upon the bungalow and these lands by the accountable persons and considering the proximity of the railway line and Ahmedabad Municipal Corporation limits and also the building potentiality of the lands valued the lands at Rs. 3 per sq. yard. He did not accept the accountable person' valuation in respect of Jamsie Villa on the ground that similarly situated properties were sold at higher rates and that the valuation report submitted by the Department's Valuation Officer disclosed the real value of the said bungalow at Rs. 17,47,900 which was arrived at at the rate of Rs. 2.15 per sq. yard. The Assistant controller computed the principal value of the estate of the deceased accordingly. As the accountable persons were not satisfied with the order passed by the Assistant Controller, they preferred an appeal to the Appellate Controller of Estate Duty. The order was also challenged on some other grounds with which we are not concerned in this reference. The Appellate Controller found that the view taken by the Assistant Controller was quite proper and, therefore, he dismissed the appeal. The accountable persons then approached the Tribunal by way of a second appeal which came to be partly allowed. The Tribunal held that the two sale instances out of four in respect of agricultural lands were not comparable and, therefore, valuation of these lands at Rs. 3 was not proper and that the lands should have been valued at the rate of Rs. 1.50 per sq. yard. As regards Jamsie Villa, the Tribunal, on consideration on the four sale instances relating to IA Chambers, Bhavani chambers, Jadav Chambers and National Chambers, held that the property Jamsie Villa should be valued at Rs. 1.50 per sq. yard as that was the highest rate at which one of those properties was sold and as there was no material to show that the lands covered by those comparable sales were in any way inferior to the property in question.

(3.) WHAT is contended by learned counsel for the accountable persons is that while fixing the valuation of Survey Nos. 39, 72, 74, 75, 76 and 77, the Tribunal has taken into consideration the sale in respect of a small plot of land admeasuring 1,000 sq. yards. As against that, the total area of Survey Nos. 72, 74, 75, 76 and 77, which is a compact block, is about 56,628 sq. yards. survey No. 39, though separated by a railway line is almost opposite to the said block of lands and the area of that plot also was about 2,200 sq. yards. He also submitted that bigger plots do not fetch the same price as are fetched by small plots and, therefore, some deduction on that count ought to have been made by the Tribunal while fixing valuation of the lands in question. The fact that Survey Nos. 72, 74, 75, 76 and 77 formed a compact block is not in dispute and is amply borne out by the material on record. Compared to the area of 1,000 sq. yards of Survey No. 50 which was sold on October 14, 1968, at Rs. 1.50 per sq. yard, the area of lands in question is about 50 times more. Obviously, such a big plot of land could not have fetched the same price as was fetched by Survey No. 50. The Tribunal having found that that was the only comparable instance of sale ought to have, therefore, made appropriate deduction from the sale price thereof while fixing the value of lands in question. The Tribunal was certainly wrong in adopting the same value and in our opinion, it ought to have made deduction of 30 per cent. from the rate at which 1,000 sq. yards of Survey No. 50 were sold while fixing the value of Survey Nos. 72, 74, 75, 76 and 77.