COMMISSIONER OF INCOME TAX Vs. TRILOKINATH

JUDGEMENT

(1.) ONE Rai Bahadur Mathuradas, who was an assessee under the Indian I.T. Act, 1922, owned a building known as Moti Building which is situated in Sadar Bazar, Jabalpur. The building was attached in 1948 for recovery of arrears of income-tax dues of Rai Bahadur Mathuradas in execution of a certificate issued by the ITO, Bombay, where he was assessed. After the death of Rai Bahadur Mathuradas, the building was inherited by his son, Kasturilal. The building was purchased by Trilokinath Dubey, Khemchand Golecha, Rajendra Prasad Dubey and Nemichand Golecha in July, 1977, with the consent of the TRO for an apparent consideration of Rs. 1,05,000. The IAC (Acquisition Range), Bhopal, who is the competent authority under Section 269C of the I.T. Act, 1961, initiated proceedings under that section for acquisition. On January 22, 1980, the competent authority passed an order under Section 269F of the Act directing acquisition of the building. Against this order there were five appeals, four by the purchasers and the fifth by Kasturilai, which were all allowed by the Tribunal by a common order dated May 7, 1980, and the order of the competent authority was set aside. It is against this order that the Department has filed Miscellaneous (First) Appeals Nos. 220, 248, 254, 256 and 263, all of 1980, under Section 269H of the Act to this court which are being disposed of by this common order.

(2.) MOTI Building is an old building. It was constructed some time in 1886. The future life of the building was estimated to be fifteen years in 1977. The building has two wings, one is double storeyed and the other is partly double storeyed and partly three storeyed. The ground floor, except a few portions in the rear, is used as shops, whereas the rest is residential. The built up area is 3,155 sq.m. There are temporary country tiled huts measuring 142.00 sq.m. in open land. The open land left out is 65.00 sq.m. The condition of the building in 1977 was very poor and the same was out of maintenance since long. Certain portions in the rear fell down, affecting the adjacent portions. The building is entirely tenanted. The tenants are protected and the rent is controlled under the. M.P. Accommodation Control Act, 1961. The gross monthly income from rent is Rs. 1,359. The land over which the building stands is within the jurisdiction of the Cantonment Board. The land is held under a lease granted by the Secretary of State. The lessee, Rai Bahadur Mathuradas, was permitted to erect the building subject to terms and conditions of the lease. A perusal of these terms and conditions goes to show that the lessee was not given any interest in the land. The lessee was the owner of the superstructure only. The lease in accordance with condition No. 9 is resumable, on a month's notice in writing, by the Local Govt. on payment of compensation for the superstructure. Further, in case of destruction of the building by any cause whatsoever if the building is not reconstructed, the Local Govt. can resume the lease by giving one month's notice.

(3.) KASTURILAL and the purchasers raised before the competent authority the following objections: