1. The aforesaid appeals arise out of and are directed against the order dated 2-2-1985 passed by the competent authority, i.e., the IAC, directing the acquisition of a property, namely, 7-Court Road, Delhi under Section 269F of the Income-tax Act, 1961 ('the Act'). The first appeal (Acquisition Appeal No. 2 of 1985) is by the group of purchasers of the said property and the other two are by the transferors.
2. We have heard the learned counsel for the appellants and the learned departmental representative who was assisted by the learned Valuation Officer and have perused the material before us.
3. Property No. 7-Court Road, has been purchased by the aforesaid appellants in Acquisition Appeal No. 2 of 1985 through a sale deed executed on 1-11-1975 by Late Shri Hari Singh Mehra for self and in his capacity as karta of an HUF known as Hari Singh Mehra & Sons, Smt.
Kamlawati wife of the said Shri Hari Singh Mehra and Shri R.C. Mehra, Shri B.C. Mehra, Shri D.C. Mehra and Shri R.C. Mehra all sons of Late Shri Hari Singh Mehra. According to the appellants, there was an agreement to sell between the parties which was executed on 12-2-1975 by which the said property was agreed to be transferred for a consideration of Rs. 15,03,500. The sale deed executed on 1-11-1975 was presented for registration on 14-11-1975 before the Sub-Registrar, Delhi but it was ultimately registered on 15-12-1978.
4. The competent authority received intimation of the sale under Section 269B of the Act and as the order under appeal shows an inspector was deputed to enquire and, compute the fair market value.
The inspector reported the value of the property at Rs. 31,90,800 which exceeded the apparent consideration by more than 15 per cent. The competent authority also referred the matter to the valuation cell and the Valuation Officer reported the value of the property in question as in December 1978 at Rs. 26,37,000. Since both the officers estimated the fair market value of the property at a figure that exceeded the apparent consideration by more than 15 per cent the learned competent authority initiated proceedings for the acquisition of the property in question by publication of the relevant notice in the Gazette dated 1-9-1979. Thereafter, notices were issued as contemplated in Section 269D(2) of the Act. The transferees put in appearance and filed objections. The matter was again referred to the Valuation Officer for correction of certain errors in the earlier report and ultimately, the Valuation Officer reported the value of this property as on 15-12-1978, i.e., the date on which the sale deed was registered at Rs. 60,61,000.
5. The competent authority doubted the genuineness of the agreement to sell dated 12-2-1975, inter alia, on the ground that it was not registered and, therefore, in its view, for the application of Section 269C of the Act, the valuation as on the date on which the sale deed was ultimately registered, i.e., 15-12-1978 was relevant. The learned competent authority determined the value of the property in question as on 15-12-1978 at Rs. 60,67,226. The learned competent authority, however, determined the value of this property as on 12-2-1975 as well at Rs. 22,95,000. Since both these figures exceeded apparent consideration by more than 25 per cent, the learned competent authority felt satisfied that the consideration for transfer as agreed between the parties had not been truly stated in the instrument of transfer with the object of tax avoidance as referred to in Section 269C(1) and after obtaining the approval of the Commissioner ordered the acquisition of the property. That is how the transferors as well as the transferees have preferred the aforesaid appeals.
6. In the memorandum of appeal numerous grounds have been set up by the appellants. In Acquisition Appeal No. 2 of 1985 the grounds of appeal have been narrated in as many as 36 clauses, some of which are general in character while others overlap each other. Similarly, in the other appeals, the grounds are stated in 12 paragraphs with sub-paragraphs in some of them. It is unnecessary to refer all the clauses here and it would be sufficient to narrate the various points pressed before us.
7. On behalf of the transferors-appellants, the main stress was on the plea that no notice was served on the transferors as required under Section 269D(2)(a). The learned counsel for them, however, challenged the order under appeal on grounds urged by the learned counsel for the transferees as well which were as under : 1. that the notices having not been served on the transferorsthe proceedings are illegal; 2. the publication of the notice under Section 269C(1) was not made in the Official Gazette within the time prescribed; 3. initiation of proceedings under Section 269C(1) was void because (i) there was no material before the learned competent authority for believing that the fair market value of the property in question exceeded the apparent consideration by more than 15 per cent, and (ii) that there was no material before the competent authority to believe that the sale consideration has not been truly stated in the instrument of transfer with the object of facilitating reduction or evasion of liability of the transferors to pay a tax in respect of any income arising from the transfer or facilitating the concealment of income or any moneys or other assets which have not been or which ought to be disclosed by the transferees for the purposes of the Act ; and 4. that there was no cogent material before the competent authority to hold that the consideration as agreed between the parties had not been truly stated in the instrument of transfer.
8. We will now deal with the various contentions made on either side before us. We would first deal with the question of service of notice on the transferors. Section 269D(2)(a) requires that the competent authority shall cause a notice Under Sub-section (1) in respect of any property to be served on the transferor, the transferee, the person in occupation of the property and on every person whom the competent authority knows to be interested in a property. Sub-section (1) of Section 269D provides that the competent authority shall initiate proceedings for acquisition of any immovable property by notice to that effect published in the Official Gazette. The learned counsel for the transferors contended that no notice was ever sent to and served on the transferors. The learned departmental representative placed before us a photostat copy of the acknowledgement slip (page 21 of the paper book) which shows the same notice was sent by registered post to Late Shri Hari Singh Mehra, Smt. Kamlawati, Shri D.C. Mehra and Shri R.C. Mehra at 7-Court Road, and was received by one O.P. Arora on 15-2-1984.
According to the learned counsel for the transferors, O.P. Arora was not the authorised representative of the transferors and, therefore, service on him is no service on the transferors. The learned departmental representative pointed out that O.P. Arora was a person who was representing the transferees in these proceedings. He, however, conceded that there is no material on record to show that O.P. Arora had any authority to accept the notices addressed to the transferors.
According to the learned counsel for the transferors, the appellants having sold the property, they were no longer residing at 7-Court Road and this was evident from a copy of the sale deed itself in which at the time of registration the address of the transferors was mentioned as 13-Ali Pur Road, Exchange Stores Building, and that the transferors never received the notices. The learned departmental representative could not point out if any other attempt had been made earlier to serve the transferors or otherwise contact them for the purposes of these proceedings which had been initiated as far back as September 1979. He, however, referred to an inspector's report at page 19 of the paper book, which is in respect of affixation of a copy of the notice on a conspicuous property, i.e., 7-Court Road. This is about a notice Under Clause (b) of Section 269D(2) and does not serve the purpose of individual notices contemplated by Section 269D(2)(a) and, therefore, of no effect.
9. As regards the despatch of notice by registered post, firstly, it is of no effect because it did not reach the addressees and was received by an unauthorised person, namely, O.P. Arora.
Secondly, a single notice was sent. Notices kept in one envelope and sent by registered post addressed to several persons makes it impossible for the postman to deliver a single letter to several persons. He can deliver it only to one and there will be valid service only on that particular individual.
10. Although the learned competent authority has mentioned in the order under appeal that the notice was served on the transferors on 15-2-1984 the mode of service has not been specified and the state of the record as pointed to or by the learned departmental representative has already been narrated above. We, therefore, hold that no notice as required under Section 269D(2)(a) was served on the transferors who are the appellants in Acquisition Appeal Nos. 3 and 4 of 1985.
11. Now, the question arises as to the effect of the wrong service of the notice on the transferees. The learned departmental representative contended that publication of a notice under Section 269C(1) is sufficient service of the notice on the transferors under Section 269D(2)(a) as well. The learned counsel for the transferees, on the other hand, challenged this contention and contended further that the non-service of the notice renders the whole proceedings void ab initio and the matter cannot even be restored to the competent authority for disposal after removing the illegality.
12. On behalf of the appellants reliance was placed on a judgment of the Hon'ble Andhra Pradesh High Court in Mohammed Mahboob Ali Saheb v.IAC [1978] 113 ITR 167, wherein it was held that Section 269D(2)(a) being a mandatory provision any violation of the same vitiated the entire acquisition proceedings and rendered them illegal and void.
Reliance was also placed on a judgment of the Chandigarh Bench of this Tribunal in Major Tikka Khushwant Singh v. IAC [1983] 6 ITD 667 in which also a similar view was taken. However, there are contrary opinions as well. In CIT v. Smt. Vimlaben Bhagwandas Patel [1979] 118 ITR 134, the Hon'ble Gujarat High Court has held that individual notices are not mandatory. A Full Bench of the Punjab and Haryana High Court in CIT v. Amrit Sports Industries [1983] 144 ITR 113 has held that initiation of proceedings and assumption of jurisdiction by the competent authority is complete on the publication of a notice in the Official Gazette and default in service of individual notices on persons interested will not vitiate acquisition proceedings. It was further held in this case that a transferee who has been served cannot assail acquisition proceedings on the ground of non-service of notices on any other person or persons interested in the property. In the case of Guduthur Bros. v. ITO [1960] 40 ITR 298, the Hon'ble Supreme Court has held that proceedings which have validly been initiated do not become illegal ab initio if some illegality arises thereafter during the course of the proceedings. In that case, proceedings for penalty were validly initiated but no opportunity of hearing was given to the assessee. The Hon'ble Supreme Court held that the proceedings should be continued from the stage of notice. The learned departmental representative could not cite any specific ruling to show that after the notice under Section 269C(1) has been published in the Official Gazette proceedings can be legally concluded without service of notice on the transferors. From the above rulings, it is clear that it was necessary for the competent authority to serve individual notices on each of the transferees and the failure to do so renders the acquisition invalid. In the face of the other rulings the view of the Hon'ble Andhra Pradesh High Court and the Chandigarh Bench of this Tribunal cannot be followed and we hold that the non-service of a notice on the transferors-appellants in Acquisition Appeal Nos. 3 and 4 of 1985 has the effect only of invalidating the enquiry and the findings arrived at by the learned competent authority and not the initiation of proceedings. Therefore, in our view, if the appellants do not succeed on other grounds, the only relief that can be allowed to them will be to set aside the order under appeal and to direct the competent authority to continue the proceedings after duly serving the transferors with notices as required under the law. We also rule that in view of the Full Bench decision of the Hon'ble Punjab and Haryana High Court referred to above, the transferee-appellants cannot succeed on the ground of non-service of notice on the transferors.
13. Now we come to the second point regarding the publication of the notice under Section 269C(1) in the Official Gazette. The learned counsel for the transferee-appellants contended that the notice in question was not published in the Official Gazette within the period of 90 days in the sense that it was not made available to the public by being offered for sale within the time. In the present case, the sale deed was registered on 15-12-1978 and the notice could be published in the Official Gazette up to 30-9-1979, The notice was actually printed in the Gazette dated 10-9-1979 and, there was a period of 30 days left before the limitation for publication of notice would expire. The learned counsel for the transferor-appellants conceded that the appellants had not brought any material on record to show that the Gazette in question was not published before 30-9-1979 and contended that it was for the revenue to show on which date the Gazette was actually published. In our view, in the circumstances of the present case, the appellants cannot succeed in the absence of any proof in support of their contention. A presumption can reasonably be raised that the Gazette was published either on the very date on which it purports to have been published or at least soon thereafter. As already pointed out in this case there was a period of 30 days during which the Gazette could be made available for sale and, therefore, the presumption would work in favour of the revenue and if the appellants wanted to contend that the Gazette was not made public during this long period of 30 days the appellants should have produced the necessary evidence. In the two rulings relied upon by the learned counsel for the appellants, i.e., U.S. Awasthi v. IAC [1977] 107 ITR 796 (All.) and Kishan Lal v. IAC [1983] 142 ITR 312 (All.) in which it was held that the date of publication of a Gazette is the date on which the Gazette becomes available to the public and not the date of the Gazette, it was proved that the Gazettes had been made available to the public for the sale only after the expiry of the period of 90 days. No material to that effect is available in the instant case and, therefore, it is not possible to hold that the Gazette in question was not published within the required time. We may mention that no such plea was raised by the transferee-appellants before the competent authority. We, therefore, hold that it is not established that the Gazette dated 1-9-1979 was not published till 30-9-1979 and this plea must, therefore, fail.
14. The third contention raised on behalf of the appellants was that the initiation of the proceedings was invalid for two reasons : (i) that there wast no ground for the competent authority to believe that the fair marke value of the property in question exceeded the apparent consideration by more than 15 per cent, and (ii) that there was no material before the competent authority to believe that the consideration was understated with the objects mentioned in Section 269C. (1) Where the competent authority has reason to believe that any immovable property of a fair market value exceeding one hundred thousand rupees has been transferred by a person (hereafter in this Chapter referred to as the transferor) to another person (hereafter in this Chapter referred to as the transferee) for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of (a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer; or (b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-tax Act, 1922 (11 of 1922) or this Act or the Wealth-tax Act, 1957 (27 of 1957), the competent authority may, subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter: It was conceded on both sides that proceedings for acquisition of property under Section 269C cannot be initiated on suspicion or on the subjective satisfaction of the competent authority and that there has to be some material before him so as to have a reason to believe, as aforesaid. The learned counsel for the appellants pointed out that according to the order under appeal, the competent authority had only two things before it. One was the inspector's report and the other a report of the Valuation Officer. We have already pointed out that the inspector as well as the Valuation Officer estimated the fair market value of the property at an amount that exceeded the apparent consideration of Rs. 15,03,500 by more than 15 per cent. According to the learned counsel for the appellants, the competent authority could not initiate proceedings only on the basis of the aforesaid reports and that there should have been some more material to show that the fair market value of the property was more than the apparent consideration and the difference between the two was more than 15 per cent. They relied upon a ruling of the Hon'ble Bombay High Court in Unique Associates Co-operative Housing Society Ltd. v. Union of India [1985] 152 ITR 114. In that case, it was held that initiation of proceedings on the basis of the report of the departmental valuation was not valid when the valuer acted under the mis-conception that property was partly vacant and was available to the society for sale. The High Court found that the valuer had clearly misdirected himself while reaching the value of the property by assuming that a portion of the property was vacant and available to the society for sale. That was thus a case in which the Valuation Officer's report suffered from an error which was shown to be apparent. In the case, before us, however, no such error has been pointed out. There was an inspector's report, who described the location of the property and also mentioned that another property in the neighbourhood had been valu d at a higher rate. He also mentioned a circular of the Central Government under which land rates for the neighbouring areas had been fixed at Rs. 400 per sq. yd. The Valuation Officer, on the other hand, valued the property at Rs. 26,37,000 and for doing so he sub-divided the land into 20 plots measuring 537 sq. yds. each and valued them at the rate of Rs. 170 per sq. yd. as in February 1975. This brought the value of the land to Rs. 18,25,800 to which the scrap value of the existing structures was added at Rs. 25,000. A sum of Rs. 50,000 was deducted on account of filling of the compound and the net value as in February 1975 (the date of the agreement) was determined at Rs. 17,97,000. The Valuation Officer also calculated the value of this property as in December 1978 at Rs. 26,27,000. To the valuation report he appended an annexure giving sale instances of smaller plots of 367 to 682 sq. yds. during the period 26-7-1974 to 29-3-1975 and the rates ranged from Rs. 192 per sq. yd. to Rs. 307 per sq. yd. in respect of land situate at Rajpur Road and Alipur Road, a neighbouring locality. Thus, the inspector's report coupled with the Valuation Officer's report provided sufficient material to the competent authority to have a reason to believe that the apparent consideration was less than the fair market value of the property by more than 15 per cent and that the consideration as agreed to between the parties had not been truly stated in the instrument of transfer. In our view, therefore, the appellants cannot succeed on the first limb of their argument. The second limb of the argument regarding invalidity in the initiation of proceedings was that the competent authority had no reason to believe that the consideration was not truly stated in the instrument of transfer, with the object of evasion or avoidance of tax as stated above. According to the learned counsel for the appellants although the report of the inspector as well as the Valuation Officer did show that the fair market value of the property in question exceeded the apparent consideration by more than 15 per cent, there was no material, whatsoever, to show that the consideration that actually passed between the parties was more than what was stated in the sale deed and particularly that anything of the sort was done with the object of avoidance of tax. The learned counsel again relied upon the case of Unique Associates Co-operative Housing Society Ltd. (supra) in which it was held that the presumption that consideration for transfer has been untruly stated cannot be raised at the stage of initiation of proceedings. According to the learned counsel while in terms of Sub-section (2) of Section 269 it is permissible to the competent authority to raise such a presumption at the conclusion of the proceedings where the difference between the fair market value at the apparent consideration is more than 25 per cent, it is not possible to raise such a presumption in the beginning as held in the case of Unique Associates Co-operative Housing Society Ltd. (supra). According to him, in the present case, the transaction was a bona fide one and even the earnest money paid at the time of the execution of the agreement to sell was paid by two cheques of Rs. 2 lakhs and Rs. 25,000, respectively, and the vendors gave due intimation to the ITO assessing them and obtained tax clearance certificates from the ITO before the execution of the sale deed. He drew our attention to page 36 of the paper book which is a copy of a letter from the ITO which shows that even a copy of the sale deed had been furnished to the ITO somewhere before 26-9-1975. The letter dated 6-11-1975 (copy at page 37 of the paper book) shows that the ITO deputed his inspector to receive a demand draft of Rs. 4,50,000 from the vendees as the vendors had outstanding tax liabilities. It was also pointed out that the purchasers were 44 in number and it was quite difficult for them to so unite as to be able to pay some extra money under the table. It was also contended that so far as the vendors are concerned, they avoided payment of capital gains tax by investing the moneys in specified securities and if the sale consideration was more, they could have invested the same as well in such securities and, there was no reason for them to take any money under the table. The ruling in the case of Unique Associates Co-operative Housing Society Ltd. (supra) clearly shows that the competent authority must have some material before it to have a reason to believe that the consideration has been understated with the aforesaid objectives. The learned departmental representative did not bring to our notice any judicial opinion to the contrary. The order under appeal would show that the learned competent authority deputed the inspector merely to enquire and compute the fair market value. Neither the learned competent authority thought it proper to direct the inspector to perform his inspectorial functions properly by making enquiries about the real consideration that passed between the parties and if there had been an attempt to avoid taxes, nor did the inspector on his own work on those lines. The inspector, therefore, did not report that the property had been sold at some higher amount or that this was done with the objects as aforesaid. So far as the Valuation Officer is concerned, this is patently not his function and he naturally did not deal with the point. The learned departmental representative could not bring to our notice any material that could provide the learned competent authority any grounds to have a reason to believe that the apparent consideration was less than the real consideration or that the consideration was understated in order to avoid taxes. As already observed such a belief had necessarily to be formed by the competent authority before action for acquisition could be initiated under Section 269C and in our view, the learned competent authority had no such material before it. Therefore, the initiation of proceedings under Section 269C is invalid, for this reason as laid down by the Hon'ble Bombay High Court in the case of Unique Associates Co-operative Housing Society Ltd. (supra).
16. The learned departmental representative brought to our attention a note in [1985] 156 ITR (St.) 42 reported under the title 'From our reporter at the Supreme Court' : 9-9-1985 : Their Lordships V.D. Tulzapurkar and Sabyasachi Mukherji, JJ. dismissed a special leave petition by the assessee against the judgment dated July 29, 1983 of the Allahabad High Court in S.A.O. No. 28 of 1976, reported in [1984] 150 ITR 42, whereby the High Court had held that even when the difference between the fair market value of the immovable property and the apparent consideration stated on the sale deed was less than 25 per cent, the acquisition proceedings initiated Under Chapter XXA of the Income-tax Act, 1961, by the IAC were validly initiated, because no proof had been adduced by the assessee at all to rebut the report of the Valuation Officer : Smt. Pushpalata v. IAC : SLP (Civil) No. 15119 of 1983.
We have gone through the ruling in the case of Pushpalata v. IAC [1984] 150 ITR 42 (All.) and find that the question of the existence of any reasons for the relevant belief about the object of understatement was not raised at all in that case with reference to the initiation of proceedings under Section 269C(1). Therefore, the aforesaid note cannot be of any help to the revenue.
17. Having disposed of the above points, we now come to the last point about the determination of the fair market value of the property in question. The term has been defined in Section 269A(d) of the Act to mean the price that the immovable property would ordinarily fetch on sale in the open market on the date of execution of the instrument of transfer of such property. The date of execution of the instrument in the case before us is 1-11-1975 and the record shows that the document was actually presented for registration on 14-11-1975. Though the document was registered on 15-12-1978 after a lot of formalities, like clearance from the Land Acquisition Department and the Urban Ceiling Department and death in the meantime of one of the executants, namely, late Shri Hari Singh Mehra, it is settled law that registration relates back to the date of execution. The learned competent authority was, therefore, in error in deciding the case mainly on the basis of value in December 1978. Since the learned competent authority as well as the Valuation Officer had also determined the value of the property in February 1975 there would arise no invalidity on this account.
18. In Section 269C reference is made to the consideration for such transfer as agreed to between the parties. There is, thus, an apparent contradiction in the definition of fair market value and the provisions of Section 269F again provide that unless the agreement to sell is registered, no objection shall be entertained on the ground that although the apparent consideration for the properties is less than the fair market value of the property on the date of execution of the transfer, the consideration as agreed to between the parties has been truly stated in the instrument of transfer. In the present case the agreement to sell was unregistered and, therefore, taking all the three provisions together, in our view, it is the value of the property in question as on 1-11-1975 that would be relevant for these proceedings.
Strangely enough none of the authorities below had made an attempt to determine the fair market value of the property as on 1-11-1975. The competent authority determined the value in February 1975, i.e., on or about the date of the agreement and in December 1978 (when the sale deed was registered). However, it was not argued from either side before us that there was any material change between February and November 1975.
19. On behalf of the appellants, it was contended that the value as exchanged between the parties was the fair market value of the property and there was no material before the competent authority to hold otherwise. They contended that it was a large plot of 15,666 sq. yds.
and was patently sold for a very high price of Rs. 15,03,500 and that purchasers for such big and highly priced properties are rare and that is the reason why the price realised for such a big plot is not commensurate with prices of similar plots. As already observed the learned Valuation Officer had in his first report referred to certain sale instances of smaller plots of about 400 sq. yds. which were sold at prices about Rs. 200 per sq. yd. The learned competent authority has itself observed that such transactions cannot be accepted in view of the decision of the Hon'ble Orissa High Court in the case of Joseph Vallooran v. CIT [1977] 108 ITR 544. The assessee had also cited some sale instances of smaller plots which have rightly been ignored by the competent authority. A perusal of the last valuation report relied upon by the learned competent authority would show that the Valuation Officer acted solely on the basis of the Government Circulars dated 7-5-1974 and 21-6-1979 issued by the Ministry of Works and Housing by which land rates for the Rajpur Road area were fixed at Rs. 150 and Rs. 400 per sq. yd. respectively. Both sides agreed that these circulars were not issued under any statutory authority and they were intended to be applied in cases where the Government land leased out to others was sought to be transferred by the lessees and for recovery of a portion of the unearned increase in terms of the lease deeds. The learned counsel for the appellants contended that these circulars could not be a basis or at least a sound one for determining the fair market value of any particular piece of land. He also argued that in the Civil Lines, Delhi, where the property in question is situate, all properties are freehold and there was no occasion to apply this circular. The learned departmental representative and the Valuation Officer, on the other hand, contended that the circular is issued after proper enquiries and, therefore, the valuation mentioned therein being in respect of leasehold properties, the value of freehold property, like the present one should be more. They, however, could not point out whether there was any leased property in the neighbourhood of the property in question and whether transfers of those leasehold land were made at value as shown in the circulars. In our view, these circulars being general ones cannot form a sound basis for determining the value of any particular piece of land. Admittedly, there is no sale instance of such a big plot of land on record and, therefore, merely on the basis of the circular, it cannot be said that the fair market value of this property in November 1975 was substantially more than what is reflected in the sale deed. It is a case of a sale by an income-tax and wealth-tax assessee against whom huge tax liabilities were outstanding and who sold the property after submitting a copy of the proposed sale deed to the Income-tax Department and obtaining tax clearance. An inspector was even deputed to attend to the transaction of sale before the Sub-Registrar and received a demand draft of Rs. 4,50,000 out of the sale consideration towards payment of the tax liabilities of the vendors. On the other hand, there was a heterogenous group of several persons, who purchased this property having come together in the form of society (unregistered) known as Brotherhood Society. As already observed in circumstances like this, it was somewhat difficult to arrange for some money to be paid under the table.
The learned counsel for the appellants also pointed out that in the income-tax case of the vendors, the transaction has already been accepted as genuine and the consideration shown by the vendors has been accepted as true for purposes of calculation of the amount of capital gains. The learned departmental representative rightly contended that those orders are not binding on the competent authority but that does not mean that those orders have no evidenciary value at all. As is evident, the learned competent authority did not make any attempt to investigate into the more important part of the proceedings, i.e., whether there was an attempt to avoid taxes and he did not establish any rapport with the officers assessing the vendors or the vendees nor did he direct the inspector to make enquiries on this important aspect of the matter. In such circumstances and in the absence of any sale transaction mere arithmetical calculations based on certain Government circulars cannot determine the fair market value of a property. We do not know what were sizes of the plots leased out by the Government, what were their development conditions and what were the terms of the leases. Without such details and without evidence of actual transactions, in our view, the fair market value of the property in question could not be determined. We, therefore, hold that from the material on record it was not proved that the fair market value of the property in question as on the date of transfer was more than 15 per cent of the consideration shown in the instrument of transfer. The property in question, therefore, could not be acquired under Section 269F. We may mention that no other point was pressed before us from either side.
20. In the result, the appeals are allowed and the order under appeal is quashed.