Allahabad H.C : Whether on the relevant valuation dates, i.e., 31st March, 1990 and 31st March, 1991, this land ceased to be agricultural land and became an asset as held by the AO and the CWT.

High Court Of Allahabad

Davendra Pal Singh vs. Commissioner Of Wealth Tax & Anr.

Sections WT 2(e), WT 7, WT 18(1)(c), ART. 226

Asst. Year 1990-91, 1991-92

M.C. Agarwal, J.

Civil Misc. Writ Petn. Nos. 329 & 330 of 1995

16th August, 1999

Counsel Appeared

Ajit Kumar, for the Petitioner : A.N. Mahajan, for the Respondent

ORDER

M.C. AGARWAL, J. :

These two petitions under Art. 226 of the Constitution have been preferred by Davendra Pal Singh, an assessee under the WT Act, 1957 (hereinafter referred to as ‘the Act’) and pertain to the asst. yrs. 1990-91 and 1991-92, respectively. The petitioner challenges orders dt. 31st Jan., 1995, whereby penalty under s. 18(1)(c) of the Act has been levied for the two years, a common order dt. 10th Oct., 1994 passed by the CWT, Meerut, whereby the petitioner’s revision petitions against the assessment orders moved under s. 25 of the Act have been partly allowed, under the assessment orders dt. 29th March, 1994 for the two years, respectively. The petitioner further prayed that a writ of mandamus be issued to the CWT to declare the land as agricultural land and directing the AO, i.e., the Asstt. CWT, Bulandshahar, not to proceed with the recovery of the demands created.

2. Counter and rejoinder affidavits, etc., have been exchanged. I have heard Shri Ajit Kumar, the learned counsel for the petitioner and Shri A.N. Mahajan, the learned counsel for the respondents.

3. The petitioner is a wealth-tax assessee and was the owner of agricultural lands bearing Khasra Nos. 509, 510, 513, 514, 515, 538 and 540 situate in village Bhoor, District Bulandshahar, and measuring 23 bighas, 16 biswas pucca, i.e., 71,968 square yards or 60,650 square meters. Up to the asst. yr. 1988-89, this land was treated as agricultural land and was treated to be exempt from wealth-tax having been excluded from the definition of ‘asset’ by ss. 2(e) and 2(i)(a) of the Act and the dispute in these writ petitions is whether on the relevant valuation dates, i.e., 31st March, 1990 and 31st March, 1991, this land ceased to be agricultural land and became an asset as held by the AO and the CWT.

4. On 19th May, 1989, the petitioner entered into an agreement to sell its land to a partnership firm named Konarka Builders constituted by six persons including the petitioner’s wife Smt. Sarla Rani. A copy of this agreement is Annexure 9 to Writ Petn. No. 330 of 1995 which describes the petitioner as party of the first part. The agreement describes the prospective purchaser as colonizers who were purchasing the land having potential for residential and commercial purposes and who were to sell the same after carving out plots, a corollary colony in accordance with law of the day and selling them for profits. The consideration agreed was Rs. 1,04,28,000 and a period of three years was agreed for the completion of the terms of the agreement. It was agreed that the party of the first part would provide all assistance to the party of the second part so that they may get approved the lay-out plan for the establishment of the colony. The party of the first part was to continue to be the owner of the land till the sale deeds were executed but the party of the second part was entitled to get executed the sale deeds plotwise, as approved or to be approved by the Development Authority, or pocketwise, or khata numberwise. The party of the second part was also entitled to enter upon the land for the purposes of making measurements, marking the roads, parks and plots according to the approved lay-out plan, showing to their potential purchasers and developing roads, parks or plots, etc. The entire expenses for the approval of the lay-out plan, of the development of the site and other ancillary expenses were to be borne by the party of the second part and the party of the second part was at liberty to get cut the entire grove at their own expenses and sell the wood to meet out the expenses of the development work for this purpose. The property was described in Schedule as under : “Grove land is situated in village Bhoor Pargana, Baran District, Bulandshahar. Khasra No. Area in Bigha (Pukhta) Khata No. 509 2-12-0 510 2-12-0 513 0-18-0 514 2-8-0 515 3-14-0 538 6-3-0 539 3-5-0 540 2-4-0 Twenty-three Bigha & sixteen Biswas Pukhta.” It was because of this agreement and the subsequent events that the AO while making the assessments held that on the relevant valuation dates, i.e., 31st March, 1990 and 1st March, 1991, the land had lost its character as agricultural land and was, therefore, not excluded from the definition of ‘asset’ in s. 2(e) of the Act. The circumstances relied upon by the AO for holding that the land in question was no longer agricultural land were : (i) the Bulandshahr Khurja Development Authority (BKDA) was requested for approval of the colony in the month of June 1989, (ii) on 29th Sept., 1989, a sum of Rs. 3 lakhs was paid by the assessee to BKDA, (iii) the firm Konarka Builders had paid an instalment of Rs. 2,84,407 on 30th Dec., 1989 to BKDA, (iv) the assessee sold plot No. 119 measuring 176 square meters of this colony on 19th March, 1990, and (v) in the income-tax return for the asst. yr. 1990-91, the builders Konarka Builders had shown a sum of Rs. 3,18,451 as sale proceeds of the plots of Hari Enclave, the name that was given to the colony to be developed on the disputed land. In the assessment order for the asst. yr. 1991-92 (valuation dt. 31st March, 1991), the AO mentioned that up to the valuation date plots measuring 3846.73 square yards had been sold. For the asst. yr. 1990-91, the AO valued this land at Rs. 2,11,52,750. This value was arrived at by applying a rate of 350 per square meters to the land measuring 60,650 square meters and adjusting therefrom the value already received in respect of plot No. 119. For the asst. yr. 1991-92, the value of the land was assessed at Rs. 1,98,68,894 by applying a rate of 350 square meter to the unsold land measuring 56,768.27 square meters. Against the assessment orders the petitioner preferred appeals to the CWT(A) bur for reasons best known to him the petitioner withdrew the appeals which were dismissed as such by the CWT(A) vide order dt. 28th Sept., 1994, copy of which is Annexure 13 in Writ Petn. No.

330 of 1995. Though this order does not state the reasons for the withdrawal of the appeals, in petition it is stated that the petitioner withdrew these appeals as the petitioner preferred to file revision petitions before the CWT (see para 18). By the impugned order dt. 10th Oct., 1994, the CWT dismissed the revision petitions insofar as the character of the land and its valuation was concerned.

5. In the writ petition, it is contended that no development work had been undertaken on the land in question up to the relevant valuation dates, i.e., 31st March, 1990 and 31st March, 1991 and it was only thereafter that actual development work started. The following grounds have been set up in Writ Petn. No. 330 of 1995 and similar grounds have been set up in other writ petition : “I. Because the respondent No. 1 has given a totally perverse finding and has gone on irrelevant and extraneous consideration. The CWT was of the opinion that since the documents on which the agreement to sale was executed was purchased on 19th May, 1989 the land had lost its character by agricultural land. It was also mentioned that the petitioner was not the owner of the land. Both these findings are perverse in nature. The petitioner had already filed relevant documents to show that the land retained its character as agricultural land till the year 1991, when the commission to develop the land was accorded by the Development Authority and a separate agreement dt. 26th Feb., 1991 was entered into between the petitioner and the said Development Authority. It has also been shown by necessary documents annexed earlier to the writ petition that the petitioner continued to remain as the owner of the land and in any view of the matter this was hardly the relevant consideration for the domain whether the land was agricultural or non-agricultural. The law is also clear on this ground that mere agreement to sale does not get absolute right and title in the property in question. II. Because the CWT has also not taken into consideration the Circular No. 2 (WT) of 1968 issued by the CBDT in which certain guidelines have been laid down for treating the land as agricultural or non-agricultural. The CWT has merely said that the third condition of the said circular that it has not been put to use as non- agricultural land has not been satisfied. The petitioner has already shown that the land retained its character as agricultural land for the relevant assessment years in question. Thus, it is clear that the CWT has not taken into consideration the relevant factors which go to determine the nature of the land as to whether it is agricultural or non-agricultural. He had merely been influenced by the fact that the agreement to sale was entered into between the petitioner and private builders. III. Because as already stated above, the CWT, Meerut, had not applied the necessary tax as laid down by various Courts to determine whether the land in question is agricultural or non- agricultural in nature. The CWT has not taken into consideration the relevant factors on facts and on law which were presented before both the authorities, i.e., respondent Nos. 1 and 2. It was pointed out before both the authorities below that for the relevant assessment year and on the relevant valuation date, the land in question was agricultural in nature and no operations were carried out on the said land, so as to change the character of the land. Although it is true that an agreement to sale was entered into, but the land remained untouched and even for the asst. yr. 1991-92 as pointed out again that the agricultural income to the tune of Rs. 55,000 was shown and it was accepted, as such, under the heading ‘Income from agricultural sources’ and the addition made on the income from ‘undisclosed sources’ was deleted by the CWT(A). IV. Because the CWT also did not take into consideration the fact that the development work was started only when the second agreement was entered into between the petitioner and the relevant Development Authority on 26th Feb., 1991. Even then, the actual development work did not start and the correspondence was being carried out between the two parties right up to September, 1991 regarding the deposit of supervision charges, etc. V. Because the CWT also did not take into consideration the land revenue receipt as well as the copy of Khasra and Khatauni which were filed before the various authorities below as well as before the CWT to show that the land was agricultural. VI. Because the CWT also did not take into consideration the Board’s circular dt. 16th March, 1968 which was categorical to the effect that any land even if it comes within the town planning scheme may be treated as agricultural land provided land revenue is being paid, agricultural operations being carried out and it is being put to non-agricultural purpose of the relevant valuation date. All the three said conditions were satisfied in the petitioner’s case, therefore, the land should have been accepted as agricultural. It is settled law that circular of the Board is binding on all IT authorities including the CWT under s. 119 of the IT Act. The order passed by the CWT is perverse and based on irrelevant and extraneous consideration and as such is liable to be quashed by this Hon’ble Court. VII. Because it may be relevant to mention here that after passing for these orders a heavy demand has been created against the petitioner by the respondent No. 2 to the present writ petition. VIII. Because the bare perusal of the order passed under s. 18(1)(c) of the WT Act would show that the AO had not at all applied his mind as to whether penalty would have been levied in this case or not. He has also not discussed anything as to whether any concealment was there on the part of the assessee. The entire order is arbitrary and based on conjectures and surmises. It would not be wrong to say that the AO is simply following the order passed by the higher authorities. No application of mind independently in this issue has been done and no efforts have been made to say whether the ingredients of s. 18(1)(c) of the WT Act are present or not.”

So far as the orders levying penalty under s. 18(1)(c) are concerned, though first and second appeals are provided under ss. 23 and 24 of the Act, a provision for reference of a question of law is contained in s. 27 of the Act. The petitioner did not avail these statutory remedies and has sought to challenge the same in these writ petitions. In the counter-affidavit the circumstances referred to above have been relied upon in support of the decision of the authorities below that the land in question had lost its character as agricultural land. In Sarifabibi Mohmed Ibrahim vs. CIT (1993) 114 CTR (SC) 467 : (1993) 204 ITR 631 (SC) : TC 20R.660, the Hon’ble Supreme Court held that whether a piece of land is agricultural land or not is essentially a question of fact and though several tests have been evolved in decisions of the Supreme Court and the High Courts, but all of them are more in nature of guidelines and the question has to be answered in each case, having regard to the facts and circumstances of that case. It was further observed that there may be factors both for or against a particular point of view, the Court has to answer the question on a consideration of all of them—a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts. Thus, the question involved being one of fact, a further question arises as to whether in exercise of jurisdiction under Art. 226 of the Constitution of India this Court can upset a finding of fact arrived at by a statutory authority. In Pioneer Traders vs. Chief Controller of Imports & Exports AIR 1963 SC 734, the Hon’ble Supreme Court held that a writ cannot be issued even if a finding of fact is erroneous. In State of Orissa vs. Murlidhar Jena AIR 1963 SC 404, it was held that in proceedings under Arts. 226 and 227 of the Constitution, the High Court cannot sit in appeal over the findings recorded by a competent Tribunal in a departmental enquiry so that if the High Court has purported to reappreciate the evidence itself, that would be outside its jurisdiction. However, if it is shown that impugned findings recorded by the Tribunal are not supported by any evidence, the High Court would be justified in setting aside the findings. Similarly, in State of U.P. vs. Maharaja Dharmander Prasad Singh AIR 1989 SC 997, it was held that judicial review under Art. 226 cannot be converted into appeal and judicial review is directed not against the decision but is confined to examination of decision-making process. Therefore, jurisdiction under Art. 226 is very limited and this Court can only interfere with the order if it is found that the finding of fact recorded by the authorities below is based on no evidence or is based on an irrelevant consideration.

In CIT vs. Siddharth J. Desai (1982) 28 CTR (Guj) 148 : (1983) 139 ITR 628 (Guj) : TC 20R.670, a Division Bench of the Gujarat High Court considered the matter and held that the following factors are useful for deciding whether a particular land was agricultural land or not : “(1) Whether the land was classified in the revenue records as agricultural and whether it was subject to the payment of land revenue? (2) Whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time? (3) Whether such use of the land was for a long period or whether it was of a temporary character or by way of a stop-gap arrangement? (4) Whether the income derived from the agricultural operations carried on in the land bore any rational proportion to the investment made in purchasing the land? (5) Whether, the permission under s. 65 of the Bombay Land Revenue Code was obtained for the non-agricultural use of the land? If so, when and by whom (the vendor or the vendee)? Whether such permission was in respect of the whole or a portion of land? If the permission was in respect of a portion of the land and if it was obtained in the past, what was the nature of the user of the said portion of the land on the material date? (6) Whether the land, on the relevant date, had ceased to be put to agricultural use? If so, whether it was put to an alternative use? Whether such cesser and/or alternative user was of a permanent or temporary nature? (7) Whether the land, though entered in revenue records, had never been actually used for agriculture, that is, it had never been ploughed or tilled? Whether the owner meant or intended to use it for agricultural purposes? (8) Whether the land was situate in a developed area? Whether its physical characteristics, surrounding situation and use of the lands in the adjoining area were such as would indicate that the land was agricultural? (9) Whether the land itself was developed by plotting and providing roads and other facilities? (10) Whether there were any previous sales of portions of the land for non-agricultural use? (11) Whether permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intended sale was in favour of a non-agriculturist? If so, whether the sale or intended sale to such non-agriculturist was for non-agricultural or agricultural user? (12) Whether the land was sold on yardage or no acreage basis? (13) Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield?”

8. In Sarifabibi Mohmed Ibrahim’s case (supra), the Supreme Court held that the land had ceased to be agricultural land. The circumstances for and against the conclusions were discussed as under: “Now, we may consider the various circumstances appearing for and against the appellant’s case. The facts in their favour are : the land being registered as agricultural land in the Revenue records; payment of land revenue in respect thereof till the year 1968-69; absence of any evidence that it was put to any non-agricultural use by the appellants; that the land was actually cultivated till and including the agricultural year 1964-65; that there were agricultural lands abutting the said land and that the appellants had no other source of income except the income from the said land. As against the above facts, the facts appearing against their case are; the land was situated within the municipal limits—it was situated at a distance of one kilometer from the Surat railway station; the land was not being cultivated from the year 1965-66, until it was sold in 1969; the appellants had entered into an agreement with a housing co-operative society to sell the said land for avowed non-agricultural purposes, namely, construction of houses; they had applied in June, 1968, and March, 1969, for permission to sell the said land for non-agricultural purposes, under s. 63 of the Bombay Tenancy and Agricultural Lands Act and obtained the same on 22nd April, 1969; soon after obtaining the said permission they executed sale deeds in the following month, i.e., in May, 1969, the land was sold at the rate of Rs. 23 per square yard and the purchaser-society commenced construction operations within three days of the purchase. What is the inference that flows from a cumulative consideration of all the aforesaid contending facts? This question has to be answered keeping in mind the criteria evolved in the Begumpet Palace’s case 1976 CTR (SC) 404 : (1976) 105 ITR 133 (SC) : TC 64R.378 set out hereinbefore. In our opinion, the entering into the agreement to sell the land for housing purposes, the applying and obtaining the permission to sell the land for non-agricultural purposes under s. 63 of the Bombay Tenancy and Agricultural Lands Act and its sale soon thereafter and the fact that the land was not cultivated for a period of four years prior to its sale coupled with its location, and the price at which it was sold, do outweigh the circumstances appearing in favour of the appellant’s case. The aforesaid facts do establish that the land was not an agricultural land when it was sold. The appellants had no intention to bring it under cultivation at any time after 1965-66 certainly not after they entered into the agreement to sell the same to a housing co-operative society. Though formal permission under s. 65 of the Land Revenue Code was not obtained by the appellants, yet their intention is clear from the fact of their application for permission to sell it for a non-agricultural purpose under s. 63 of the Bombay Tenancy and Agricultural Lands Act.

We are, therefore, of the opinion that the High Court was right in holding that the said land was not an agricultural land at the time of its sale and that the income arising from its sale was not exempt from capital gains tax. The appeals, accordingly, fail and are dismissed. No costs.”

In CWT vs. Officer-in-charge (Court of Wards) 1976 CTR (SC) 404 : (1976) 105 ITR 133 (SC) : TC 64R.378, the Supreme Court observed that it is not the mere potentiality, which will affect its valuation as part of “assets” but its actual condition and intended user which have to be seen for the purposes of exemption from wealth-tax. One of the objects of the exemption is to encourage cultivation or actual utilisation of land for agricultural purposes and if there is neither anything in its condition, nor anything in the evidence to indicate the intention of its owners or possessors so as to connect it with an agricultural purpose, the land could not be ‘agricultural land’ for the purposes of earning an exemption under the Act and that entries in revenue records are, however, good prima facie evidence. The learned counsel for the petitioner also made reference to CIT vs. Gemini Pictures Circuit (P) Ltd. (1996) 132 CTR (SC) 256 : AIR 1996 SC 1522 in which a piece of land situated on busiest road within the limits of Municipal Corporation and was registered as urban land in Municipal records and surrounded by commercial buildings and neither seller nor purchaser thereof considering it as agricultural land, could not be treated as agricultural land merely because vegetables were being raised therein at the time of sale. As is evident from a perusal of various authorities cited above, there are various considerations which affect the nature of land and every case depends on its own facts. Further, the jurisdiction of the High Court under Art. 226 of the Constitution of India with regard to a finding of fact is extremely limited and subordinate authorities finding cannot be disturbed unless it is based on no evidence or is based on an irrelevant consideration. In this case, the various circumstances that have been taken into account by the authorities below have been narrated above and they were certainly relevant to the issue.

The learned counsel for the petitioner contended that the land in question was, admittedly, agricultural and was so assessed up to the immediately preceding year that the land user was not changed in terms of s. 143A of the U.P. Zamindari Abolition & Land Reforms Act and land revenue was also paid even in the year in question and that the land was recorded in the revenue papers as grove land and that these matters have not been given due consideration by the AO as well as by the CWT. Since the land in question was admittedly agricultural land in the preceding year and till some time during the period 1990-91 these circumstances alone could not have clinched the issue in favour of the petitioner and it is not shown that much stress was laid on them. A copy of the revision petition has been placed as Annexure 14 in Writ Petn. No. 330 of 1995 which reads as under : “Sir, I had filed my return of wealth for the asst. yr. 1991-92 on 31st March, 1993, declaring net wealth at Rs. 2,50,700. Computation of net wealth is being enclosed herewith for your kind perusal. The same has been assessed by the learned Asstt. CWT, Circle Bulandshahr, at Rs. 2,07,06,219 by treating the agricultural land as commercial land and its value taken arbitrarily. The value of the residential house has also been valued contrary to the WT Rules.

The learned AO has wrongly taken the character of the land and its valuation has wrongly been adopted.

Similarly, the residential house, which has been acquired by me through succession, constructed on or before financial year 1981-82, has also been valued excessively and contrary to the method of valuation provided in the rules. Under the circumstances enumerated above, I would request your honour that the character of the land be taken as of ‘agricultural land’ and the value of the residential house be adopted as per the WT Rules. Counter-foil of the challan for the payment of the filing fee of the revision of Rs. 25 is being enclosed herewith. Thanking you.” Thus, the point that the petitioner agitates now does not seem to have been pressed and placed before the CWT and it seems that the petitioner acted in a very perfunctory manner in preferring and placing the revision petition before the CWT. An agreement to sell this property for development as house sites, roads, parks, etc., had been executed on 19th May, 1989, i.e., much before the valuation date, i.e., 31st March, 1990. Application for approval of a lay-out plan had been moved on 9th Aug., 1989 before the Development Authority. Sums of Rs. 3 lakhs and Rs. 3,18,451 had also been paid to the Development Authority and even one plot No. 119 measuring

176 meters had been sold. During the next year, land to the extent of 3,846.73 meters had also been sold. As held in Officer-in-Charge (Court of Wards)’s case (supra), if there is neither anything in its condition nor anything in the evidence to indicate the intention of its owners or possessors so as to connect it with an agricultural purpose, the land could not be agricultural land for the purposes of earning an exemption under the Act. Similarly, in Sarifabibi Mohmed Ibrahim’s case (supra) where an appellant had no intention to bring it under cultivation at any time after 1965-66 and certainly not after he entered into the agreement to sell the land to the housing co-operative society, it was held that the land did not remain agricultural land.

In this case, there was an agreement on 19th May, 1989 to sell this land for non-agricultural purposes and efforts in that direction had started in right earnest and several acts, as narrated above, were done towards that end and even a plot of land bearing plot No. 119 was sold to a prospective house builder. Apparently, therefore, the petitioner as well as the builder ceases to have an intention to hold the land for agricultural purposes after 19th May, 1989. Payment of land revenue and absence of an order under s. 143 of the U.P. Zamindari Abolition & Land Reforms Act authorising the change of user were, therefore, not of much importance.

The learned counsel for the petitioner also contended that the CWT has not taken into account a Circular No. 385, dt. 3rd July, 1984 issued by the CBDT. A copy of the circular has been placed as Annexure 15 to Writ Petn. No.

330 of 1995 and it says that for the purposes of the Act a land used for agricultural purposes is to be treated as agricultural land even though it may not be assessed to land revenue. This circular is not of any consequence because the essential question is whether the land was being used and held for agricultural purposes. In the present case, this was to be seen on the valuation dates, i.e., 31st March, 1990 and 31st March, 1991 and this question had to be examined in the light of the circumstances mentioned above and in view of those circumstances, the finding by the AO as well as by the CWT that the land ceased to be used for agricultural purposes on the valuation dates cannot be said to be without any evidence or to be based on an irrelevant consideration.

It has been alleged in the writ petition that for the asst. yr. 1991-92, the Tribunal has accepted the petitioner’s contention that he had earned Rs. 55,000 as agricultural income. The Tribunal’s judgment is dt. 28th Nov., 1997 which has been filed along with a supplementary affidavit and is, therefore, a subsequent event in different proceedings and, therefore, does not affect the validity of the orders. By diverting the legal route, by withdrawing first appeal and by choosing a restricted remedy in the form of a revision petition, the petitioner denied himself the benefit of the wider appellate jurisdiction and a finding by the Tribunal on the question under consideration. Further, the petitioner, admittedly, had some other lands as well and, lastly, as stated above, a writ petition cannot be heard like an appeal and evidence that was not before the authorities below cannot be allowed to be put in.

The learned counsel for the petitioner also referred to the definition of ‘urban land’ as contained in s. 2(o) of the Urban Land (Ceiling and Regulation) Act, 1976. This has no relevance because it is admitted by the Revenue that till 19th May, 1989 the land was agricultural land and it changed its character only thereafter. As is mentioned in the agreement, it was a grove land and the buyer had been authorised to cut the trees. The cutting of the trees was a material circumstance and the petitioner does not even seem to allege that not a single tree was felled in pursuance of the agreement before 31st March, 1990 and 31st March, 1991 and explain how plot No. 119 could be sold without any development whatsoever.

As is evident from the circumstances of the case, in view of the circumstances mentioned above and the relevant facts being in the personal knowledge of the petitioner, the burden lay heavily on him to show that on the two valuation dates in spite of the aforesaid circumstances which are not disputed, the land did not lose its character as an agricultural land. This burden is not shown to have been discharged and mere reliance on the facts that the plots in question were recorded in the Revenue papers as agricultural land and land revenue was paid, could not be sufficient to displace the conclusion of the authorities below in the face of the circumstances mentioned above.

The learned counsel for the petitioner also contended that the CWT did not apply his mind to the facts of the case. For this reference was made on an observation in the impugned order that after the agreement the assessee did not remain the owner of the land. This is an erroneous observation but it does not mean that the CWT did not apply his mind to the facts of the case. The order mentions the various facts that the authorities have cited before him and this contention, therefore, cannot prevail.

The result of the above discussion is that the petitioner has failed to show that the conclusions arrived at by the AO or by the CWT are legally erroneous being based on no evidence or being based on an irrelevant circumstances so that this Court in exercise of jurisdiction under Art. 226 of the Constitution of India could set aside those findings and direct the authorities to reconsider the matter.

The other point that was raised before the CWT was about the valuation of the land in question. As stated above, the authorities below have valued the land by applying the rate at which plot No. 119 was sold. The CWT has dealt with this issue in the following manner : “The total area of the land as on 31st March, 1990 is 60,615 square meter (23-10-0) Pukhta Bigha.

The assessee sold plot No. 119 for Rs. 62,500 @ 350 per square meter. Thus, the value of land converted into plots is Rs. 2,11,50,750. However, the assessee was required to pay Rs. 3,68,302 to B.K.D.A. towards development charges for external development and Rs. 1,77,805 towards supervision charges. Therefore, it would be reasonable to reduce the said amount of development and supervision charges from the value as calculated above. The net wealth would be Rs. 2,06,06,563 and the assessee would get a relief of Rs. 5,46,107 (3,68,302 +

1,77,805) in the asst. yr. 1990-91. Similarly, the assessee has 56,768 square meter of land as on 31st March, 1991. Taking the said circle rate, the value would be Rs. 1,98,68,044. Deducting therefrom the development charges and supervision charges, payable by the assessee amounting to Rs. 5,46,107, the net value would come to Rs.

1,93,22,707 and the assessee would get a relief of Rs. 5,46,107.

The contention of the assessee that its value be taken at which it sold land to Konarka Builders is not acceptable as the assessee’s wife Smt. Sarla Rani is a partner in Konarka Builders and price fixed is a mutual adjustment.” As is evident the petitioner had agreed to sell the land to Konarka Builders for Rs. 1,04,28,000. This was the total consideration that he was to receive in respect of this land in respect of which he was obliged to execute sale deed as and when required by Konarka Builders in favour of any person whatsoever. It was the right of the builders to prepare a plan and to sell the plots to persons of their choice and at a consideration agreed between them and the buyer. The petitioner had no say in the matter and was obliged to execute the sale deed by getting some amount as agreed between him and Konarka Builders subject to overall limit of Rs. 1,04,28,000. No doubt, the petitioner continued to be the owner of the land [See Nawab Sir Mir Osman Ali Khan vs. CWT (1986) 57 CTR (SC) 89 : (1986) 162 ITR 888 (SC) : TC 17R.789] but any purchaser of land from the petitioner would be bound by the terms of the agreement which could be enforced against any buyer from the petitioner. Therefore, the fair market value of land in the hands of the petitioner on the two valuation dates, could not be more than the aforesaid sum of Rs. 1,04,28,000 as reduced by amount already received up to the valuation date. In valuing the property, the authorities below have acted arbitrarily and have not even made adjustment for the land that would have been left for common use in the shape of parks, roads, etc. Therefore, only to this extent the assessment order suffered from a legal error and should have been set aside for arriving at the proper fair market value of the asset in question.

As regards the orders under s. 18(1)(c), as stated above, the petitioner had efficacious and adequate statutory remedy by way of appeal. Therefore, they could not be challenged in a writ petition and the writ petitions in relation to them will have to be dismissed.

In the result, the writ petitions are partly allowed and the assessment orders for the asst. yrs. 1990-91 and 1991-92 are partly set aside insofar as the determination of the fair market value of the asset, i.e., land is concerned and it is directed that the said asset shall be valued at Rs. 1,04,28,000 as reduced by the amounts already received by the petitioner from Konarka Builders towards the sale consideration. The AO will redetermine the value after making such enquiries as may be necessary and after giving the petitioner a proper opportunity of hearing. In other respects the writ petitions are dismissed. The interim orders are vacated.

The parties will bear their own costs.

[Citation : 243 ITR 127]

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