The fair market value of a property for the purpose of acquisition under Chapter XX-A of the Income Tax Act, 1961, must be determined based on relevant factors and by taking into account all comparable instances of sales.

Madan Mohan Punchhi, J.

1. This is an appeal under Section 269H of the I.T. Act, 1961, against the order of the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, dated July 31, 1976, preferred by two brothers, Mani Singh and Avtar Singh, whose purchased residential house was acquired under Chapter XX-A of the Act.

2. Broad facts giving rise thereto are these : A house numbered in the municipal registers as B-XX/693 in Gurdev Nagar, Ludhiana, stands built on khasra Nos. 68/20-4 and 20-5 in khata 394/374 terf karabars. The site thereunder was purchased by one Santokh Singh Grewal in 1964, and the house was built thereon in 1965, totally costing Rs. 40,000. In December, 1972, the house was sold to the present appellants for an apparent consideration of Rs. 80,000. On April 16, 1973, the appellants mortgaged with possession one-half share thereof with one Sudesh Kumar Thapar for an apparent consideration of Rs. 45,000. The Competent Authority, appointed for the purpose under Chapter XX-A of the Act, issued a notice of acquisition on June 13, 1973, under Section 269D(1), which was served on the appellants on June 15, 1973. Thus commenced the proceedings.

3. The house in question is a single storeyed building. It is built on a plot of land measuring 800 square yards. Its covered area is 2,500 square feet. The appellants objected to the acquisition and maintained that the fair market value of the property in question did not exceed the apparent consideration and, in any case, it did not exceed 15 per cent, of the consideration paid. In support thereof, they filed a report prepared by Shri Chandan Singh Kang, determining the fair market value of the property at Rs. 78,293. Shri Kang valued the land at Rs. 36,800, i.e., at the rate of Rs. 46 per square yard and the superstructures at Rs. 41,493. The departmental Valuation Officer was asked to determine the value thereof, taking into account the report given by Shri Kang. The departmental Valuation Officer valued the land at Rs. 48,000, i.e., at the rate of Rs. 60 per square yard and the superstructures at Rs. 55,713--total Rs. 1,03,713.

4. The report of the departmental Valuation Officer was made available to the appellants as also to the transferor and the mortgagee-with-possession. Since the departmental Valuation Officer had put the valuation of the property far in excess of 20 per cent, of the apparent consideration, it was taken as proved that the consideration reflected had not truly been stated in the instrument of transfer. After enquiry, the Competent Authority, vide order dated March 30, 1976, ordered acquisition of the property in question at the price suggested by the departmental Valuation Officer, i.e., for Rs. 1,03,713, and thus recorded a finding that the fair market value of the property had exceeded the apparent consideration by more than 25 per cent, thereof. The appellants took the matter in appeal before the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, but the order of the Competent Authority was confirmed with a slight modification inasmuch as the cost of the superstructure was reduced from Rs. 55,713 to Rs. 52,000. The cost of the land at Rs. 48,000 was maintained. The total value of the house in question thus worked out to Rs. 1,00,000. By such reduction, as the difference found was not more than 25 per cent., the Tribunal concluded that there would thus be no conclusive proof against the assessee under Section 269C(2)(a) and for the said difference, there was a rebuttable presumption created against the appellants but, on the material before it, the presumption had not been rebutted.

5. The learned counsel for the appellants, assailing the order of the Tribunal as also that of the Competent Authority, has confined primarily to the price of the plot and maintained that the finding, in that regard, recorded by the Tribunal, was perverse and based on irrelevant considerations. In addition thereto, it was asserted that the Tribuna