COMMISSIONER OF INCOME TAX Vs. GANESH BUILDERS

JUDGEMENT

(1.) THESE two appeals arise out of the proceedings under Chap. XX -A of the I.T. Act, 1961. As both of them arise out of the same proceedings, we have heard them together and this judgment will dispose of both these appeals.

(2.) THE property in dispute is S. No. 164/2A CTS No. 104 on Lalbahadur Shastri Marg (Agra Road) at Ghatkopar. The total area of this plot is 4,550 sq. yards, which is equal to 3,804 sq. metres. On October 9, 1972, Ganesh Builders agreed to sell this plot to one Mr. Maru or his nominee at the price of Rs. 65 per sq. yard. Actual conveyance was executed on May 10, 1973, by Ganesh Builders in favour of Paras Builders as the nominee of Mr. Maru. At the rate of Rs. 65 per sq. yard the total price paid under the conveyance was Rs. 2,95,750. The conveyance was registered on June 29, 1973. Under the provisions of added Chap. XX -A of the I.T. Act the registering authority made a report of the requisite particulars to the competent authority, viz., the IAC of Income -tax.

(3.) BOTH of them showed cause to the notice under their separate representations. Considerable correspondence ensued between the IAC and the present respondents. During the course of this correspondence, Paras Builders relied upon the report of their valuer, on Jayant Tipnis. In his report Mr. Tipnis pointed out some of the instances of sales and purchases of comparable lands in the locality and observed that the market price of raw lands at about that time was even below Rs. 65 per Sq. yard. When the department pointed out that the plot lay in a fairly developed locality and the price of a developed plot would be much more than that of raw land, Jayant Tipnis has clarified the matter by pointing out that the fair market value would be Rs. 140 per sq. yard on the footing of the plot being a developed one. However, certain outgoings will have to be taken into account and adding those to Rs. 65 per sq. yard and the price of Rs. 140 per sq. yard would be a proper price.