1. This appeal by the accountable person relates to the estate duty assessment of Smt. Ishwari Devi, who died on 5-3-1979. The deceased owned certain lands and the question before us is regarding their valuation having regard to the circumstances of the case.
2. The first point is regarding the value of Bahadurgarh plot. This plot had been acquired by the Haryana Government on 18-2-1977, which was much before the date of death. The case of the assessee was that only the compensation regarding this land could be taken into consideration while valuing this property. The Appellate Controller, however, ignored the fact of acquisition as, according to him, this evidence had come before him for the first time and he upheld the valuation of the above land at Rs. 30,425 as fixed by the Assistant Controller. This valuation has been made on the basis of the prevailing price.
3. The learned counsel for the assessee submitted before us that the fact of acquisition was claimed by the accountable person even before the Assistant Controller and only the specific order of the acquisition authority was being produced now. It was submitted that this is an official document and it should have been taken into consideration by the learned Appellate Controller. The learned counsel relied on the certificate of the Land Acquisition Officer (LAO) stating that this land was acquired on 18-2-1977 and a compensation of Rs. 5,780 was fixed. It was also pointed out that there was no appeal against this decision of the LAO. It was contended that the value of the land could not exceed the compensation available to the assessee under the law prevalent at the time of death.
4. It is true that in this case the certificate of the LAO was not before the Assistant Controller and the fact that compensation was fixed at a particular amount was not put up before him. However, considering the fact that this is a case of estate duty and the claim of the assessee was there that this was an acquired piece of land, we would direct that the Assistant Controller should verify the amount of compensation determined for the land in question and if he is satisfied, he should take the value at that figure and not at the market value as had been taken by him.
5. The deceased owned half share in plot No. 12/75, Punjabi Bagh, measuring 1,000 sq. yards. The accountable person had shown the value of this land at Rs. 16,000 for which amount it was acquired on 8-10-1969. This was a freehold land and the other owner of the half portion was another lady of the same family. The assessee had claimed before the Assistant Controller that the value of the land should be taken at its purchase price and nothing more. This was not accepted by the Assistant Controller who valued the land at Rs. 350 per sq. yard.
Thus, the value came to Rs. 1,90,575.
6. Before the Appellate Controller it was contended that at the time of death the property in question fell under the Urban Land (Ceiling and Regulation) Act, 1976, and, therefore, the market value of the land in question had to be determined having regard to the provisions of that Act. It was also pointed out that the request for exemption under Section 20 of that Act had been turned down by the Delhi Administration by their letter dated 26-6-1978. It was also pointed out that similar request of the other co-owner of the half portion had also been turned down. In this connection it was pointed out that besides this land, there were other lands owned by the husband of the deceased in Greater Kailash and taking that land along with this land, it would be above the ceiling limit. The Appellate Controller considered this plea and having regard to the restriction on transfer of plots placed by the Urban Land (Ceiling and Regulation) Act, the Appellate Controller reduced the value from Rs. 350 per sq. yard to Rs. 300 per sq. yard. In this connection, he pointed out that the entire land belonging to the deceased could not fall under the Urban Land (Ceiling and Regulation) Act and only land owned by the deceased, her husband and other persons, which are to be taken as one unit for this purpose, has not to exceed 500 sq. metres. Thus, the Appellate Controller allowed a relief of Rs. 27,200.
7. The learned counsel for the assessee pointed out that after appreciating the facts pointed out by the assessee, the learned Appellate Controller has allowed a very meagre relief. In this connection, he submitted that the provisions of the Urban Land (Ceiling and Regulation) Act had not been taken into consideration -end provisions of that Act had a definite impact on depressing the value of land. In this connection, he drew our attention to some of the provisions of the Urban Land (Ceiling and Regulation) Act and particularly the provisions contained in Sections 11, 20 and 21 of the said Act. He also drew our attention to the fact that the husband of the deceased, Shri Radha Kishan, had filed a statement under Section 6(1) of the Urban Land (Ceiling and Regulation) Act and along with this he had made an application under Section 20 for exempting the land belonging to the family of Shri Radha Kishan from the operation of the said Act. However, this request had not been accepted by the Delhi Administration. It was also submitted that under Section 11, a compensation of Rs. 10 per sq. metre only is contemplated and this too is not fully payable in cash and a part of it is payable in a deferred manner in the form of bonds. The learned counsel also drew our attention to Section 26 of the said Act which provides that no person holding vacant land within the ceiling limit shall transfer such land by sale, mortgage, gift, lease or otherwise, except after giving notice in writing of the intended transfer to the competent authority.
Sub-section (2) of that section provides that where a notice is given for the transfer of land by way of sale, the competent authority shall have the first option to purchase such land on behalf of the State Government at a price calculated in accordance with the provisions of the Land Acquisition Act, 1894, or of any other corresponding law for the time being in force and if such option is not exercised within the period of 60 days from the date of receipt of the notice, it shall be presumed that the competent authority has no intention to purchase such land on behalf of the State Government and it shall be lawful for the person to transfer the land to whomsoever he likes. Sub-section (3) of the above section provides that for the purpose of calculating the price of any vacant land under Sub-section (2), it shall be deemed that a notification under Sub-section (1) of Section 4 of the Land Acquisition Act, or under the relevant provisions in other corresponding law had been issued for acquisition of such vacant land on the date on which the notice was given under Sub-section (1) of this section.
8. The learned departmental representative submitted that this is a case of estate duty and the land belonging to the deceased was not in excess of the ceiling limit of 500 sq. metres and, therefore, there would be no question of reducing the value for the purpose of estate duty. He pointed out that this plot was very much under the ceiling limit.
9. We have considered the rival submissions. We are of the view that the impact of the Urban Land (Ceiling and Regulation) Act was not taken into consideration by the estate duty authority and the matter has been decided without considering the relevant provisions of that Act. We may, therefore, take into consideration the provisions of that Act. For appreciating the problem, we have to consider some of the relevant provisions of the Urban Land ^Ceiling and Regulation) Act. Section 3 of the said Act provides that except as otherwise provided, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies. The word 'person' includes an individual, a family, a firm, a company or an association or BOI, whether incorporated or not. The ceiling limit is laid down in Section 4 of the said Act, where the limits are according to the areas where the land is situated. We are concerned with the Union territory of Delhi and for this area the ceiling limit has been fixed at 500 sq.
metres. There is also provision for computation of ceiling where a person holds vacant land in different categories or urban agglomeration. 'Family' is also defined in relation to a person, that particular individual, his/her spouse and their unmarried minor children. Various exceptions are provided and there are certain exemptions regarding the land used for a dwelling house or the land appurtenant to it. Section 5 of the above Act prohibits certain transfers of vacant land in a certain period even prior to the commencement of the above Act and Section 6 of the said Act provides for persons holding vacant land in excess of the ceiling limit to file a statement under that section. It is under this section that the statement was filed by Shri Radha Kishan. Section 10 of the said Act provides for the manner of acquisition of vacant land in excess of the ceiling limit. This section provides for a notification by competent authority giving the particulars of the vacant land held by such person in excess of the ceiling limit and stating in that notification that the land is to be acquired by the concerned State Government. This notification is published in the Official Gazette and after that the competent authority has to hear the interested persons. After hearing the parties the competent authority has to declare the excess vacant land referred to in the notification and effective from a particular date. It is only after this publication of the notification and up to the date specified in the declaration that no person is allowed to transfer the excess land and any transfer made in contravention of this provision shall be deemed to be null and void. The further provisions provide for the surrender or dealing with the possession to the State Government and further action to be taken by the competent authority for taking possession of such land, if some person refuses to comply with the notice.
10. Section 11 provides that where any vacant land is deemed to have been acquired by the State Government under Sub-section (3) of Section 10, the State Government shall pay to the person having any interest in that land. In a case where there is an income from such vacant land an amount equal to eight and one-third times the net average annual income actually derived from such land during the period of five consecutive years preceding the date of publication of notification and where no such income is derived from such vacant land, an amount calculated at a rate not exceeding Rs. 10 per sq. metre in the case of vacant land situated in an urban agglomeration falling in category A, with which we are concerned. We may leave the other procedural provisions and provisions for appeals, etc. Section 20 confers a right on the State Government to exempt certain lands from the Urban Land (Ceiling and Regulation) Act. While exempting such land the Government may put certain conditions. Such exemptions can be granted in the case of public interest or cases of hardship. It may be mentioned that the request made under this section had been rejected by the Delhi Administration.
11. Section 21 says that excess vacant land is not to be treated as excess in certain cases. The main requirement is that the land is declared to be set apart for construction of dwelling units for the accommodation of the weaker sections of society in accordance with the scheme approved by the State Government. We have already made reference to Section 26 where a notice has to be given before the transfer of vacant land within the ceiling limit and it requires a notice to be given to the competent authority, who has to decide within 30 days whether the land has to be acquired.
12. Now in view of the above provisions of the Urban Land (Ceiling and Regulation) Act, one has to determine : 1. Whether any part of the land belonging to the deceased could be considered as excess land under the Urban Land (Ceiling and Regulation) Act? 2. Whether the provisions of that Act have the effect of depressing the value of such land 3. What should be the principle to be followed for valuing such excess land? 13. The first question which has to be considered is whether any portion of the land belonging to the deceased could be considered to be excess under the provisions of the Urban Land (Ceiling and Regulation) Act. From the application of Shri Radha Kishan, it appears that he has mentioned the following pieces of vacant land owned by Shri Radha Kishan or his family : 1. One-third out of plot No. W-145, Greater Kailash, Part-II, New Delhi. The assessee's share in this property is stated to be 111 sq.
metres. It is also stated that the sale deed is in the name of the firm Lachhminarain Radha Kishan. The other owners of the land are Shri Mohan Lal and Shri Sham Lal, who were the married sons of Shri Radha Kishan.
2. The present property, namely, half share in Plot No. 12/75, Punjabi Bagh, which was 455.16 sq. metres. There is also a mention of another plot of land extending to 229.77 sq. metres in Model Town, Delhi, where a building has already been constructed and in this house Shri Radha Kishan and his family including his three sons and their families were residing.
14. Now in view of the above pieces one has to decide whether the land of 455.16 sq. metres at Punjabi Bagh was in excess of the Urban Land (Ceiling and Regulation) Act. It is clear that this piece of land itself was not in excess but if taken together with any other lands, which come under the provisions of the Urban Land (Ceiling and Regulation) Act, it is found that there is some excess. A proportionate portion of the land belonging to the deceased also will have to be treated as hit by the provisions of the said Act. As far as the third plot of land measuring 229.77 sq. metres at Model Town is concerned, it is clear that this plot had been utilised for a building which was already there. This property cannot be taken into consideration under the Urban Land (Ceiling and Regulation) Act. It is so because it is not a vacant land and the Act clearly excludes such house properties from the operation of the Urban Land (Ceiling and Regulation) Act. In this connection, it may be mentioned that the Minister of State for Works and Housing had clarified the position under the above Act as applicable to Delhi. This is contained in a Press Note issued on 15-2-1976 by the Ministry of Works and Housing, Government of India, which is published in Sampath lyengar's The Three. New Taxes, 1979, Fifth edn., Vol. 1, at 'p. 932 onwards. On page 935 it is stated that around a residential building the open space that is admissible should be equal to that determined by the municipal building bye-laws or a maximum of 500 sq. metres, whichever is less. In addition to this open space, if there is contiguous land, an additional extent to 500 sq.
metres will also be allowed. Thus, in the case of an existing residential building one can keep the area of land actually occupied by the building plus open space up to 500 sq. metres and the rest is called vacant land which is subject to ceiling. He has also clarified that a person will not be required to surrender a built-up residential house even though the area occupied by it plus the land appurtenant to it may exceed the prescribed ceiling limit.
15. Now we are concerned with the land which was owned by the firm Lachhminarain Radha Kishan. Though the facts are not very clear, it appears that this firm consisted of Shri Radha Kishan and his two married sons. If the land in question belongs to the firm and if it was carrying on any business, it has to be seen whether according to the terms of the agreement between the partners the land was to be the property of the firm or of the partners individually. Only in case where the property belongs to the individual partner, the question of considering of that under the Urban Land (Ceiling and Regulation) Act would arise. This aspect of the matter requires further verification.
We may, however, state that in case that piece of 111 sq. metres is found to be owned by Shri Radha Kishan, there would be some excess of the vacant land if that piece is taken along with the Punjabi Bagh land. The excess of 500 sq. metres in that case will be only 66 sq.
metres, i.e., the position of the excess vacant land the proportionate piece of excess land in the Punjabi Bagh would be only four-fifth, which would be about 52s q. metres (sic). We are giving this finding only on the basis of the data furnished in the paper book but as we are giving direction regarding the verification of the facts regarding the land belonging to the firm, we would make this subject to verification by the Assistant Controller.
16. We may now decide the question of valuation. As far as the land which is not hit by the Urban Land (Ceiling and Regulation) Act is concerned, we are of the view that the value fixed by the Appellate Controller does not require any change. However, as far as the excess land is concerned, which is ultimately found, it has to be valued in view of the restrictions placed by the Act. In the present case, the Government itself has not issued any notification and no machinery of law has been put in motion regarding declaring any land to be surplus for acquiring it under the provisions of the Act. Till that is done it cannot be held that any piece of land has actually been found surplus in respect of which compensation would become payable. The restriction regarding transfer is only for the purpose of taking permission of the competent authority and there is no absolute prohibition for transferring such land. It is true that in case of the excess which can be reasonably worked out on the date of death, the value of the such land cannot be the full market value and it would be depressed to some extent.
17. In this connection, we may make a mention of the decision of the Madras High Court in the case of CWT v. K.S. Ranganatha Mudaliar  150 ITR 619. In this case there was a question of valuation of an agricultural land held in excess of the ceiling limit fixed under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961. The Madras High Court had held that if the restrictions and prohibitions contained in the Urban Land (Ceiling and Regulation) Act were ignored invaluing the excess land, that would amount to valuing the asset differently in content and quality from that actually owned by the assessees. It was also held that such lands should be valued after taking note of the restrictions and prohibitions which would have the effect of depressing its value. The Tribunal had valued such depressed land on the basis of compensation receivable under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, and this was upheld by the High Court.
18. Though we may seek guidance from the above decision, we have mainly to depend on the provisions of the Urban Land (Ceiling and Regulation) Act as it was another law which was being considered in that case. We have already referred to the provision under which the competent authority can declare a particular piece of land in excess and they have a right to acquire it as if it was land in excess under the Land Acquisition Act. It would, therefore, be reasonable to hold that in respect of this excess piece of land a proper value should be as if that excess land was being acquired under the Land Acquisition Act.
There are certain principles fixed for that Act but on the facts of the present case, we consider it unnecessary to go into that aspect as the excess land found in the present case would not be much and we see no reason why the plea of the counsel of the assessee that so much of excess land should be valued on the basis of cost to the deceased should not be accepted.
19. Having discussed the above legal position, we would only set aside the matter for final disposal by the Assistant Controller in the light of our discussion for the purpose of determining the actual excess after giving an opportunity to the assessee of being heard. After that he may proceed to adopt the valuation as follows : (a) In respect of the land which is not above the ceiling limit, the value at Rs. 300 per sq. yard.
(b) The portion of the land which is found to be above the ceiling limit should be valued at cost. We may mention that the cost in the present case is not very much different from the compensation provided under the Urban Land (Ceiling and Regulation) Act.