Mcd vs Delhi Brass And Metal Works Pvt. ...
2008 Latest Caselaw 67 Del

JUDGMENT

Pradeep Nandrajog, J.

1. By a common order dated 27.3.1997 HTA. No. 139/97 to HTA. No. 141/97 have been disposed of.

2. Three petitions have been filed challenging the same order for the reason each appeal related to a different assessment order. I note that the 3 appeals challenged the assessment order dated 31.1.1989 disposing of the two pending proposals finalizing rateable value of the said property at Rs. 55,190/- w.e.f. 1.4.1986 and Rs. 8,62,780/- w.e.f. 2.2.1987.

3. Rateable value fixed at Rs. 55,190/- was accepted by the assessed. Challenge in the appeal was to the rateable value fixed w.e.f. 1.4.1986 at Rs. 8,12,780/-.

4. The plot in question is B-17, Okhla Industrial Area, Phase-I. It is held by the assessed under a leasehold tenure which states that in case of sale 50% of the unearned increase would be paid to the assessed.

5. The learned assessing officer has therefore depressed the value of the property in relation to land value by 50%. Learned Additional District Judge has done likewise.

6. Parties are not at variance on the said issue.

7. The question which needs consideration is as to what was the market value to be adopted when construction commenced.

8. Needless to state, the rateable value required to be fixed with relation to the annual value of the property. This exercise required the standard rent to be determined under the provisions of Delhi Rent Control Act,1957. In turn, the twin component of the market value of the land when construction commenced and cost of construction had to be the basis for the reason during the relevant period, being a commercial property, 8.625% of the market value of the land at the commencement of construction plus reasonable cost of construction would become the standard rent. Deducting 10% there from would have yielded the rateable value.

9. Since construction commenced in the year 1985 learned assessing officer has determined the market value of the land in relation to sale instances of certain plots auctioned in August,1985. Land value has been determined at Rs. 1100/- per sq.mtr.

10. Giving benefit of the unearned increase which had to go to the Government, land value has been determined at Rs. 28,42,647/-

11. The cost of construction furnished by the assessed with reference to valuation report of an approved valuer has not been accepted. The Assessing Officer has determined the cost of construction at Rs. 82,72,100/-.

12. Rateable value of Rs. 8,62,780/- has been determined.

13. Learned Appellate Judge has found fault with the Assessing Officer on both counts. With reference to the market value of land learned Additional District Judge has noted that the sale instances noted by the learned Assessing Officer pertained to plots in phase-II, Okhla Industrial Area and that the plot in question was in phase-I.

14. Learned Judge has also noted that land in phase-II was more expensive than in phase-I. Learned Judge has also noted that the instant plot admeasures 4347.3 sq.mtrs. and that smaller plots fetch a higher value.

15. Learned Additional District Judge has opined that land value could not be more than Rs. 710/- per sq.mtr.

16. I note the sale instances noted by the learned Assessing Officer. The same are as under :-

         Plot No.               Date of                 Plot Size                 Sale rate
                                auction                 in sq.mtr.                Per q.mtr.
        ----------             ----------              -----------              -------------
        F-24/5, OIA-II           1988-85                 1066.90                  Rs. 1,115/-
        D-65, OIA-I             05.08.85    382.52                  Rs. 1,450/-
        D-150,OIA-I             05.08.85                  302.22                  Rs. 1,637/-
        A-40, OIA-I,            05.08.85                  542.22                  Rs. 1,101/-
        F-11/A, OIA-I               1985                  257.52                  Rs. 1,320/-
        A-84, OIA-II            07.08.85                  523.50                  Rs. 1,771/-

 

17. A perusal of the sale instances show that 4 out of 6 sale instances relate to plots in Okhla Industrial Area, Phase-I. All were auctioned in 1985. Land rate vary from Rs. 1101/- to a maximum of Rs. 1637/- per sq.mtr. 2 plots were auctioned in Okhla Industrial Area, Phase-II. Smaller plot admeasuring 523.50 sq.mtrs. fetched a price of Rs. 1,771/- per sq.mtrs. A larger plot admeasuring 1066.90 sq.mtrs. fetched a sale price of Rs. 1115/- per sq.mtr.

18. Instant plot is in phase-I. Prima facie, the determination of the land value by the learned assessing officer as also by the learned Additional District Judge is not based on sound reasoning.

19. As noted above, the learned assessing officer has fixed the land value at Rs. 1100/- per sq.mtr. Learned assessing officer ignored that a plot at Okhla Industrial Area, Phase-II admeasuring 1066.90 sq.mtr. fetched a sale price of Rs. 1115/- per sq.mtr. The instant plot is four times the said plot. The sale instances noted in the assessment order themselves show that the larger plots get lesser price.

20. Thus, market price of the said land had to be less than Rs. 1100/- per sq.mtr.

21. The learned Additional District Judge from no where has noted that plots at Phase-I were more valuable than the plots at Phase-II.

22. But, the only data available is the one recorded by the Assessing Officer and as noted above. It shows smaller plots yielding a higher rate per sq.mtr.

23. With reference to plot No. H-24/5, Okhla Industrial Area, Phase-II admeasuring 1066.90 sq.mtrs. which fetched sale price of Rs. 1115/- per sq.mtr., value of the instant plot admeasuring 4347.30 sq.mtrs. adopted by the learned Additional District Judge at Rs. 710/- per sq.mtr. cannot be faulted with.

24. Thus, not for the reasons noted by the learned Additional District Judge but for the reasons noted hereinabove, I affirm the decision of the learned Additional District Judge insofar as land value has been determined at Rs. 710/- per sq.mtr.

25. Pertaining to the cost of construction suffice would it be to note that the assessing officer has given reasons but not cogent to reject the report of the valuer submitted by the assessed.

26. The learned Additional District Judge has taken the mean figure i.e. the value assessed by MCD provided by the government approved valuer. I find no infirmity in the approach of the learned Additional District Judge.

27. Before concluding I may note that the rateable value determined by the learned Additional District Judge is Rs. 7,02,968/-.

28. Thus, the differential in the rateable value comes to approximately Rs. 1.6 lacs.

29. Revenue effect is about Rs. 30,000/- per annum. This issue becomes a non-issue w.e.f. 1994 when Assessment Bye Laws were changed and cost of land paid by the assessed had to be taken as land cost.

30. The instant petitions thus relate to only a period of 6 years for the reason rateable value determined by the learned Additional District Judge stands adopted only till the year 1993.

31. I note that the current law pertaining to fixation of rateable value relates to a unit area method and requires pending asessments to be finalized on unit area method.

32. If, as urged by the learned Counsel for the petitioner, matter stands remitted to the assessing officer to redetermine the rateable value, by revaluing the property through a government approved valuer, right would accrue to the assessed to have the rateable value determined on unit area method meaning thereby the rateable value fixed would be less than half of what has been fixed by the learned Additional District Judge.

33. I note that the contention urged by learned Counsel for the petitioner is that if the learned Additional District Judge did not agree with the cost of construction determined by the assessing officer matter ought to be remanded to the assessing officer to enable him to obtain a counter valuation.

34. These are the petitions under Article 227 of the Constitution of India. The fairness of the impugned order is a relevant consideration while deciding the issue.

35. I accordingly dismiss the petitions.

36. No costs.