The rental method is the appropriate method for determining the fair market value of a property that is fully tenanted, has a dilapidated building, and is subject to rent control legislation.

( 1 ) THIS appeal arises out of acquisition proceedings taken under Chapter XX-A of the Income-tax Act, 1961, initiated in respect of transfer of premises No. 55, Malanga Lane, Calcutta, by one Anil Charan Law to Panchanan Das, the respondent in these proceedings. The transfer was effected by a registered deed dated 30th May, 1973, and the consideration therefor was Rs. 41,000.

( 2 ) IT is not in dispute that the premises No. 55, Malanga Lane, Calcutta (hereinafter referred to as "the said property") consisted of 6 cottahs 8 chataks of land with a partly two-storeyed and partly three-storeyed building thereon. The covered area on the ground floor of the building was 3,700 sq, ft. , the area on the first floor was 3,177 sq. ft. and on the second floor 150 sq. ft.

( 3 ) ON receiving information of the aforesaid transfer the competent authority appointed under Section 269b of the I. T. Act, 1961, felt that the apparent consideration for the said transfer was less than the fair market value of the said property. Thereupon the competent authority got the property valued by the official valuer who determined the fair market value of the said property as at the date of sale at Rs. 70,400. The official valuer submitted this valuation in his report dated 17th November, 1973 (sic ).

( 4 ) ON receipt of the said report, the competent authority recorded its reasons under Section 269c of the said Act on the 13th November, 1973, and initiated proceedings under Section 269c for acquisition of the said property.

( 5 ) THEREAFTER a notice under Section 269d (1) of the I. T. Act, 1961, also dated the 13th November, 1973, was issued to the transferor, the transferee and the persons in occupation of the property so that objections, if any, could be made against the said acquisition. Both the transferor and the transferee submitted their objections and appeared in the proceedings.

( 6 ) AFTER the hearing of the objections, the competent authority was satisfied that the immovable property, the subject-matter of these proceedings, was of a market value exceeding Rs. 25,000 and that such fair market value exceeded the apparent consideration therefor by more than 15% and the consideration for such transfer as agreed to between the parties had not been truly stated in the instrument of transfer within the meaning of Section 269d. The objections submitted, accordingly, were rejected and with the previous approval of the CIT the competent authority directed that the property be acquired under the provisions of Chap. XX-A of the said Act.

( 7 ) FROM this order of the competent authority an appeal was preferred by the transferee. The Tribunal accepted the contentions of the respond-dent and held that the fair market value of the property on the date of the transfer was not more than the consideration disclosed in the sale deed. The Tribunal concluded that the conditions necessary for acquisition of the said property were not satisfied, and, therefore, the provisions of Section 269c of the said Act were not applicable. The order of the competent authority directing the acquisition of the property was cancelled and the appeal of the respondent was allowed.

( 8 ) FROM this order of the Tribunal, the present appeal has been preferred to this court under Section 269h of the I. T. Act, 1961.

( 9 ) MR. B. L. Pal, learned counsel for the revenue, has reiterated the two main points which were urged before the Tribunal. The first is a preliminary point of limitation. It is a matter of record that the competent authority passed its order on the 24th July, 1974. On the same day, a copy of the order signed by the competent authority and bearing his seal was served on the respondent. The respondent applied for a certified copy of the very same order from the competent authority and after obtaining the same preferred the appeal to the Tribunal annexing the certified copy of the order appealed from. This appeal was preferred on the 17th September, 1975. I