COMMISSIONER OF INCOME-TAX Vs. MOHAN SINGH

JUDGEMENT

(1.) THIS judgment will dispose of two Income-tax Appeals Nos. 3a (Commissioner of Income-tax v. Mohan Singh) and 4a of 1975 (Commissioner of Income-tax v. Inderjit Singh) brought from the judgment of the Income-tax Appellate Tribunal dated November 21, 1974, reversing the judgment of the competent authority, as both the appeals arise out of the same transaction of sale.

(2.) INDERJIT Singh, respondent in Appeal No. 4 of 1975, transferred to Mohan Singh, respondent in Appeal No. 3 of 1975, two commercial plots bearing Nos. 1020-1021 measuring 287. 5 square yards situate in sector 22b, Chandigarh, for an apparent consideration of Rs. 1,25,000, vide registered sale deed dated March 2,1974. The competent authority initiated proceedings for the acquisition of the said plots by publishing a notice under Section 269d (1) of the Income-tax Act (hereinafter called the Act) and issued notices under Section 269d (2) in respect of the said plots to the respondents. Both the respondents filed objections but the proceedings against the transferor were taken ex parte. The competent authority, after considering the objections and making enquiries under Section 269f (4) of the Act as to the fair market value of the said plots, overruled the objections and ordered the acquisition of the said plots under Chapter XXA of the Act.

(3.) THE two plots whose areas were known, were 1070-1071 and 1010-1011, the area of the former plot being 33 5'42 square yards and of the latter 287. 5 square yards. Plots Nos. 1010-1011 were sold in auction in February, 1970, for Rs. 1,10,000 and the other plots in the month of May, 1971, for Rs. 2,03,000. Taking into consideration the appreciation in the market price at the rate of 7 per cent, their value in the month of March, 1973, was fixed at Rs. 1,33,100 and Rs. 2,28,375, respectively, the per square yard value of each of the plots being Rs. 463 and Rs. 684 respectively. The Tribunal refused to strike a mean between the two rates on two grounds, namely, that the plots in different areas are not sold at the same rate and that the difference between the rates of the two plots was very large. They, however, calculated the fair market price of the plots in dispute at the rate of Rs. 463 per square yard and rejected the other rate without recording any reason.