JUDGMENT
Sanjay Kishan Kaul, J.
Rule.
1. With the consent of learned Counsels for the parties, the petition is taken up for final disposal.
2. The petitioner is aggrieved by the order dated 25th July, 2002 passed by the Joint Assessor and Collector assessing rateable value of the property in question bearing No. 501/23B, Sainik Farm Avenue, New Delhi.
3. The petitioner purchased the property in question in pursuance to the Sale Deed dated 15th November, 1999 consisting of the land and in a semi-finished structure which was subsequently completed by the petitioner. The consideration paid as per the Sale Deed is recorded Rs. 22 lakhs in pursuance to agreement to sell at 30th August, 1995. The petitioner submitted a valuation report showing additional expenditure of Rs. 5 lakhs on the completion of construction and the period of commencement of construction is stated to be January 1991 to July, 1992.
4. A reading of the order of assessment shows that the value of the land stated in the sale deed has not been considered and the market value of the land has been taken as 50% of the market value of land in Malviya Nagar as prevalent in 1995. The reason given for this is stated to be the fact that the plot is in an unauthorised colony and thus 50% of the rate should be taken into consideration.
5. Learned Senior Counsel for the petitioner contends that there is no reason given to ignore the primary evidence consisting of the sale deed of the property in question which is duly registered. Further, the value of land as prevalent in Malviya Nagar cannot be taken into account, even though half of the said value is applied in the present case, as Malviya Nagar consists of much smaller plots with full Municipal services of water, electricity and sewage while these facilities are absent in Sainik Farm and the plots are also of larger size.
6. The principal contention advanced by the learned Senior Counsel for the petitioner is that there is no reason recorded at all for ignoring the sale consideration as recorded in the sale deed. In this behalf, a reference has been made to the Departmental Instruction No. 9/94 which is stated to be the reason for applying the 50% land rate. In para 5 of these instructions, it is stated as under:
“5. In the unauthorised colonies and unauthorised regularised colonies, the sales are not through regular sale deeds and the price indicated in the sale deeds, if any, is ridiculously low. In such cases, therefore, the land rates may be adopted at 50% or 75% of the land rates fixed for the nearby DDA/L&DO colonies. The percentage of 50% or 75% may be determined depending upon the development in the colony. In less developed colony, the rates may be adopted at 50% while in the well-developed colonies it may be 75% of the nearby L&DO/DDA colony.”
7. Learned Senior Counsel contends that in view of Division Bench judgment of this Court in Shiva Kant Jha and Azadi Bachao Andolan v. Union of India and Ors., (2002) 256 ITR 563, the departmental circular in question in the present petition cannot be the basis for the assessment of the assessing authority contrary to the settled principles of law as also the provisions of the statute being the MCD Act, 1957 and the rules and regulations framed there under. In Shiva Kant Jha’s case (supra), the Division Bench of this Court was of the view that a circular issued by the CBDT in , terms of Section 119 of the Income-tax Act directing Income-tax authorities to accept the certificate of residence issued by the authorities of Mauritius as sufficient evidence as regards status of residence and ownership of the companies is not valid as it is for the assessing authority to go into the genuineness and validity of a document and to see the nature of the transaction. Since the Income-tax Act does not contemplate conclusiveness of a certificate of residence granted by the Mauritius tax authorities, merely production of a residential certificate issued by the said authority would not suffice and as such an instruction would be ultra vires the Income-tax Act.
8. In the counter-affidavit filed by the respondent, it is stated that the documents filed by the petitioner were duly considered and the value of the premises has been arrived at on the basis of the market value of land at the time of commencement of construction coupled with the cost of construction. It is admitted
that the rateable value specified in the Demand Bill dated 7th December, 2001 has not been correctly shown but that is stated to be of no consequence. Insofar as the land rates are concerned, it is stated that since Sainik Farm is an unauthorised colony, no land rates for the same had been fixed by the DDA/L&DO and that the transfer of the land is not through regular sale deeds and the price indicated is ridiculously low. It is in these circumstances that the Departmental Instruction No. 9/94 dated 14th July, 1994 is liable to be adopted.
9. I have considered the submissions advanced by learned Counsel for the parties. Insofar as the Departmental Instruction No. 9/94 is concerned, the reading of para 5 shows that the instruction to take 50 or 75% of the land rate fixed for nearby colonies in respect of an unauthorised regularised colony is based on the fact that there are no regular sale deeds and even in the sale deeds which are available, the price is ridiculously low. In my considered view, the said instructions cannot be mandatory in all circumstances and at best are only indicative of the nature of principles to be followed in the absence of other relevant material available for determination of the rateable value. The assessing authority has to proceed in accordance with the rules and regulations as also the Act for determination of the rateable value. The assessing authority is duty-bound to consider the primary evidence consisting of the sale deed in question and other sale deeds of the area. It is in the absence of the primary evidence that the secondary evidence has to be looked into. In a given case if the price is low, the assessing authority can for cogent reasons recorded in the order differ from the same. This aspect is also to be appreciated keeping in mind the fact that if there is a registered sale deed, the registering authority has also considered the issue of the value of the transaction in question in respect of stamp duty payable. There cannot be general guidelines in this respect that any flat rate of 50 or 75% should be taken in all unauthorised regularised colonies by just taking the land value of a nearby regular colony.
10. The assessing authority in the present case has not recorded even the reasons for stating that the sale consideration stated in the sale deed is low. For that matter there is not even a statement in the order that this land value is low and that is why it is being ignored. All that is stated is that the market value of the land in Malviya Nagar is being taken into consideration for determining the rateable value.
11. In my considered view, the impugned assessment order cannot thus be sustained. The said order is consequently quashed as also the subsequent demand notice dated 7th December, 2001. The matter is remanded back to the Assessing Authority to re-determine the rateable value in accordance with law and in view of the observations made in the present writ petition. Needless to add that the principles of parity as set out in the case of Dr. Balbir Singh and Ors. v. MCD and Ors., and Lt. Colonel P.R. Chaudhary (Retd.) v. MCD and Ors., should be kept in mind. This is more so in view of the fact that it has been held by this Court in MCD v. Dhunishaw Framroz Daruwala, that even post DMC (Determination of Rateable Value) By-laws, 1994, the said principle of parity would apply.
12. The writ petition is allowed in the afore-said terms with no orders as to costs.
13. The petitioner or his authorised representative to appear before the Assessing Authority on 31st January, 2003 at 3.00 p.m.
dusty to the parties.