C.K. Banerji, J.
1. This appeal arises out of proceedings for acquisition under Chapter XXA of the I.T. Act, 1961.
2. The relevant facts are shortly as follows :
By a deed of conveyance dated the 4th April, 1973, Jayanta Nath Ghosh, the respondent No. 3, sold to Anup Kumar Kapoor and Adarsh Lal Chopra, the respondents Nos. 1 and 2, respectively, the premises No. 8, Jagadish Chandra Bose Road, Calcutta (hereinafter called the said property) for Rs. 1,80,000.
3. Statements under Section 269P(1) of the I.T. Act, 1961 (hereinafter called 'the Act'), in the prescribed form and verified in the prescribed manner were duly filed by the transferees disclosing, inter alia, the following particulars:
(a) The said property comprised of a partly one and partly two-storeyed building together with one-storied cut-houses having a total land area of 1 bigha 5 cottahs 3 chittaks and 4 sft.
(b) The buildings were more than 100 years old.
(c) The property was let out to tenants.
(d) The estimated fair market value of the property was Rs. 1,80,000.
4. By a letter dated the 3rd August, 1974, the IAC Acquisition, Range I, Calcutta, the competent authority within the meaning of Section 269A(b) readwith Section 569B of the Act, referred the matter under Section 269L(1)(a) of the Act to the Valuation Officer, Unit-III, to determine the fair market value of the said property and to submit a report.
5. Thereupon, the said Valuation Officer inspected the said property on the 6th September, 1975, and submitted his valuation report to the competent authority, inter alia, as follows:
(a) The locality was a good residential-cum-commercial locality.
(b) The main building was a traditional load-bearing brick-built double storeyed one with terraced roofing on wooden beams and bargas having sanitary, water and electricity connections.
(c) The out-house to the rear side of the main building was a single storeyed brick-built load-bearing one with terraced roofing on wooden beams and bargas.
(d) The out-houses facing the road were single storeyed brick-built building with A.C. Sheet/C.I. Sheet/country tiled roofing on wooden frames.
(e) The buildings were more than 100 years old and had already outlived their economic life and their estimated future life was 25 years,
(f) The buildings were in a bad state of repairs.
(g) The buildings were let out to 14 tenants at an aggregate rent of Rs. 1,176 per month.
(h) The property was ideal for construction of a multi-storeyed building which could go up to 12 storeys without any set back and must have been purchased by the transferees, for that purpose either after removing the tenants by paying compensation or by accommodating them in the new building and even if the tenants could not be removed, constructions could start in stages, constructing at the first stage on the vacant land measuring 115ft. X 45ft.
(i) The appropriate method of valuation of the said property was value of the land plus the break-up value of the buildings minus the amount of compensation.
(j) As there was no approved rate for such compensation and in view of the restrictions under the Rent Control Act, valuation of the said property was made by applying rental method for the expected future life of the buildings adding thereto the reversionary value of the laud. The market price of the land was thus determined at Rs. 23,000 per cottah and of the entire land of 1 bigha 5 cottahs 3 chittacks and 4 sq, ft. at Rs. 5,79,370.
6. The valuation of the said property was, however, made at Rs. 2,73,000 computed as under:
Valuation by rental method
Rs.Rs. Gross rental income1,176 X 12= 14,112 p.a.Outgoings (i)Municipal tax 198 X 8 1,584 (ii)Repairs & maintenance @ 1/6 on gross rent less tax, i.e., on Rs. 12,528
2,088 (iii)Collection & management @6% on 12,528752 (iv)Electricity charge 10 X 12120 (v)Land revenue4.14
Total outgoings4,548.14 Say4,5484,548 Net return...9,564Having regard to the security of the rental income, this type of property should, in my opinion, be capitalised @ 7% security at the material time. Therefore, YP for 25 years @ 7% allowing for redemption of capital at 4%
1,01,732 Land value reversion Land-- 25.19 cottahs The value of 25.19 cts. of land comes to 25.19 X 23,000 P.K.
5,79,370 Deferred for 25 years at 5% Y.P. 0.2953 X 5,79,370 = 1,71,087
Total value of the property-- 1,01,732 plus 1,71,0872,72,819 Say2,73,000
7. The said Valuation Officer in determining the market value of the land of the said property took into consideration the value of the land at 47, Shakespeare Sarani, on 29th August, 1964, at Rs. 27,468 per cottah and observed that since the beginning of 1973 speculation of residential flats in multi-storeyed buildings has sent the price of land soaring very high.
8. On the 29th September, 1973, the competent authority, under Section 269C of the Act, recorded his reasons for initiation of proceedings for acquisition of the said property, inter alia, stating that on the basis of the said valuation report of the Valuation Officer the value of the said property exceededthe apparent consideration by 51% and directed issue of notice under Section 269D of the Act.
9. On the same date, i.e., 29th September, 1973, a notice under Section 269D(1) of the Act was issued inviting objections against the said proposed acquisition in terms of Section 269E of the Act which was published in the Gazette of India on the 13th October, 1973. Copies of the said notice were also served on the transferor and the transferees in terms of Section 269D(2) of the Act.
10. Objections were filed by both the transferees and the transferor against the proposed acquisition.
11. The transferees contended, inter alia, that:
(a) Initiation of the proceedings for acquisition was bad in law having been made after the expiry of the time prescribed.
(b) The consideration for the purchase was commensurate with the capitalised value on the basis of the annual municipal value of the said property.
(c) The buildings were very old and the said property was in the occupation of very old tenants and it was very difficult to evict them in view of the rent control and other legislations safeguarding the interests of tenants and thus the consideration paid for the purchase of the property was its fair market value.
12. The transferor contended, inter alia, as under :
(a) The valuation of the property at Rs. 1,14,000 has been determined in the wealth-tax assessment of the transferor since the assessment year 1966-67 and up to the assessment year 1972-73, on the basis of rental income.
(b) Certificate under Section 230A(1) was duly issued to the transferor by the ITO after due enquiry before registration of sale of the property at Rs. 1,80,000.
(c) The property was occupied by 13 tenants.
13. At the hearing of the said objections a valuation report by Mr. S.R. Banerjee, chartered engineer, dated the 18th April, 1975, and a copy of the said deed of conveyance dated the 4th April, 1973, were filed before the competent authority on behalf of the transferees.
14. In the course of hearing of the said objections, the competent authority supplied to the transferees a copy of the valuation report of the said Valuation Officer and the transferees also filed before the competent authority further objections contending, inter alia, as follows :
(a) The valuation of the said property should be on rental method.
(b) In the income-tax assessment of the transferor for the assessment year 1973-74, the capital gains which accrued to the transferor on sale of the said property had been assessed on the basis of Rs. 1,80,800 at which the said property was sold.
(c) Premises No. 47, Shakespeare Sarani, was not a comparable unit being a vacant land with the advantage of immediate construction of a multi-storeyed building and was so utilised by the purchaser while the instant property was fully tenanted and developed and on account of rent restriction legislations the tenants could not be evicted.
(d) The valuation of land made by the Valuation Officer was based on no evidence and on conjectures and surmises.
(e) The locality in which the said property was situate was not a good residential locality at all and was surrounded by motor car repairing, and other machine shops, cobblers, mistries and workers in machine shops, a neglected tank and an old abandoned cemetry.
(f) The buildings in the said property did not outlive their economic life as stated by the Valuation Officer.
(g) The speculation of the Valuation Officer that the property must have been purchased for construction of a multi-storied building was baseless.
(h) No construction could be made on the vacant land of US ft. x 45 ft. as under the building regulations of the Corporation of Calcutta 50% of the total land of the said property had to be kept vacant.
(i) The basis of valuation of the Valuation Officer that the said property would become vacant after 25 years and further development could be made thereafter was wholly imaginary.
15. The transferees also cited as a comparable unit the sale of premises No. 9, Acharya Jagadish Chandra Bose Road, a property adjacent to the said property, having an area of 1 bigha 4 cottahs 4 chittacks and 12 sq. ft. sold in August, 1969, at a price of Rs. 98,000.
16. After hearing the said objections the competent authority held that the proceedings for acquisition of the said property were validly initiated and after obtaining the approval of the Commissioner of Income-tax made an order for acquisition of the said property under Section 269F(6) of the Act.
17. In making the said order, the competent authority held that the transferor had undervalued the said property by giving its valuation at Rs. 1,14,000 in his wealth-tax assessments and evaded wealth-tax for all the years which was obvious from the admitted consideration of Rs. 1,80,000 and, by disclosing Rs. 1,80,000 as the sale price of the property in his income-tax returns for the year 1973-74, he also evaded tax on capital gains by undervaluing the said transaction.
18. The sale of premises No. 9 Acharya Jagadish Chandra Bose Road, for Rs. 98,000 cited by the transferees as a comparable unit was distinguishedby the competent authority on the ground that the said transactions took place at a time when the City of Calcutta was in a very disturbed condition due to political unrest by certain extremist elements and the said sale was made apparently at a gross under valuation. The competent authority relied as comparable units the sale of premises No. 47, Shakespeare Sarani, and also two other sales of vacant plots of land from his own records, one in April, 1974, near the junction of Royd Street and Acharya Jagadish Chandra Bose Road, about 300 yards from the said property, at more than Rs. 24,000 per cottah and the other in September, 1974, at a distance of about 400 yards to the south of the said property at Rs. 55,000 per cottah. The competent authority rejected the valuation report of Mr. S. R. Banerjee and upheld the valuation made by the Valuation Officer observing that the Valuation Officer could value the building at scrap value and add thereto the total value of the land computed by him at Rs. 5,79,370 but instead he tried to be very modest in his estimate and took the value deferred for 25 years. On the basis of the said comparable units relied on from his own records, the competent authority held that the value of the land of the said property was more than Rs. 25,000 but less than Rs. 55,000 and that the consideration for the transfer of the said property as agreed to between the parties had not been truly stated in the said instrument of transfer with the object as referred to in Section 269C(1)(a), (b) of the Act and the fair market value of the said property exceeded by more than 25 per cent, of the apparent consideration.
19. The transferees made an application before the competent authority for correction of certain mistakes in the said order which was refused.
20. Both the transferor and the transferees appealed to the Income-tax Appellate Tribunal against the said order of the competent authority for the acquisition of the said property.
21. Both the said appeals were heard together by the Tribunal and were disposed of by a common order.
22. Apart from the above-noted contentions that were urged before the competent authority that the said property was sold by the transferor at the fair market value, the transferees relied on a further fact before the Tribunal that in Title Suit No. 524 of 1966 instituted by India Cable Co. Ltd., one of the tenants of the said property against Jayanta Nath Ghosh, the transferor in the City Civil Court, Calcutta, a decree had been passed on the 25th July, 1969, declaring that the said India Cable Co. Ltd. was entitled to use the open space in the said property and thus the transferees were not in a position to demolish the structures or construct any multi-storeyed building as observed by the competent authority. The valuation report of the Valuation Officer and the order of the competent authority were supported and sought to be upheld on behalf of the revenue. TheTribunal held that there was no procedural defect in the initiation of the said proceedings for the acquisition of the said property. The Tribunal further held that the property being fully tenanted, the appropriate method of valuation of the said property would be to capitalize only the rent by a certain number of years of purchase as laid down by this court in CED v. Radha Devi Jalan : 67ITR761(Cal) and the valuation made by the Valuation Officer under the land and building method was bad in law. The Tribunal further found that the sale instance cited on behalf of the transferees made it apparent that the said property could not have been sold for a consideration more than what was stated in the deed of conveyance dated the 4th April, 1973. The Tribunal also noted that in the income-tax and wealth-tax assessments of the transferor the value of the said property was determined at Rs. 1,80,000 and at Rs. 1,48,344, respectively. The provisions of Section 52(2) of the Act were not invoked by the ITO to enhance the quantum of capital gains. A certificate under Section 230A of the Act was issued to the transferor before the registration of the said deed of conveyance without any objection. The Tribunal also noted that the wealth-tax assessment of the transferor for the assessment year 1971-72 was revised by the CWT and the WTO valued the said property at Rs. 1,48,344 by giving effect to the said order of the CWT.
23. The Tribunal held that the conditions for initiation of the proceedings for acquisition of the said property and that the fair market value of the said property exceeded the apparent consideration by more than 15% were not satisfied. The order of the competent authority was therefore cancelled and the appeals were allowed.
24. Being aggrieved by the said order of the Tribunal, the Commissioner, W. B.-II, has preferred this appeal under Section 269H of the Act.
25. At the hearing, Mr. Pranab Pal, learned counsel for the respondents Nos. 1 and 2, raised a preliminary objection that the appeal was time-barred. The said order of the Tribunal was received by the appellant on the 3rd October, 1975, while the appeal was preferred on the 3rd December, 1975, after the expiry of 60 days from the date of service of notice of the said order of the Tribunal as provided in Section 269H of the Act as will appear from the statements made in para. 9 of the petition of the appellant for admission of the appeal and the notice of motion taken out.
26. Mr. Ajit Sengupta, the learned counsel for the appellant, submitted that the appeal was not time-barred as the date, 3rd October, 1975, mentioned in para. 9 of the petition was a mistake which should be 4th October, 1975.
27. In view of the dispute between the parties as to the date of receipt of the said order of the Tribunal by the appellant, we directed the appellant to make a formal application for correction of a mistake in para. 9 of thesaid petition, if any, and to satisfy this court that the appeal was not time-barred.
28. On 21st July, 1978, the appellant made the said application and from the records produced before us, we were satisfied that the copy of the said order of the Tribunal was received by the appellant on the 4th October, 1975, and the appeal was, therefore, not time-barred and we, therefore, directed the appellant to make necessary correction in para. 9 of the petition, which has since been made.
29. At the hearing before us, Mr. B. L. Pal, learned counsel for the appellant, limited his arguments and contentions only on grounds Nos. 6, 8 and 12 of the grounds of appeal.
30. Mr. B. L. Pal contended that the entire property was not tenanted but only the buildings were occupied by the tenants and the land which was lying vacant could, therefore, be built upon. He relied on the valuation report of the Valuation Officer. Mr. Pal further contended that, inasmuch as the entire property was not tenanted, the said Valuation Officer, therefore, applied the correct method of valuation considering the future life of the buildings. The valuation was, therefore, made on rental method for the estimated life of the buildings and thereafter on the reversionary value of the land after the buildings had outlived their natural life. He next contended that the sale instance in 1969 cited by the transferees could not be relied upon and was rightly rejected by the competent authority inasmuch as, due to political disturbances in Calcutta, the value of land and buildings at the relevant time had considerably gone down. The sale instances relied on by the competent authority were better comparable units and represented more or less the value of land and buildings prevailing in 1973. Mr. B, L. Pal submitted that the rental or yield method accepted by the Tribunal for valuing the said property was wholly wrong and inapplicable to the instant case.
31. In support of his contentions Mr. B. L. Pal relied on the following passages from Parks on Valuations, 4th Edn., at pages 37 and 38 :
'When land is fully developed by buildings erected thereon ; when the property is let at a rent from which the fair rent can be ascertained ; and when the rent has been proved and is likely to be maintained for years to come, then the rental method of valuation should be applied to determine the market value of the premises.......
When a property is valued on the rental basis, the result is the value of the land and buildings taken together and cannot afterwards be apportioned......
This does not mean the land and building method cannot be employed to check a valuation done by the rental method... ...after capitalisation ofthe rent you cannot deduct the depreciated value of the buildings on the land, and say that the result is the definite value of the land.'
32. Mr. B.L. Pal also cited a decision of the Supreme Court in Rustom Cavasjee Cooper v. Union of India : 3SCR530 . One of the questions involved in this case was whether compensation payable under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969, meant a just equivalent in money of the property acquired or did not mean such just equivalent and if the court could go into the propriety or adequacy or reasonableness of the compensation under Article 31 of the Constitution. The Supreme Court held that a statute which provided for acquisition must either fix the compensation or specify the principles on which and in the manner in which the compensation was to be determined. The following principles laid down by the majority judgment at page 383 was relied on :
'The important methods of determination of compensation are 3 (i) market value determined from sales of comparable properties, proximate in time to the date of acquisition, similarly situate, and possessing the same or similar advantages and subject to the same or similar disadvantages. Market value is the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchaser; (ii) capitalization of the net annual profit out of the property at a rate equal in normal cases to the return from gilt-edged securities. Ordinarily, value of the property may be determined by capitalizing the net annual value obtainable in the market at the date of the notice of acquisition ; (iii) where the property is a house, expenditure likely to be incurred for constructing a similar house, and reduced by the depreciation for the number of years since it was constructed; (iv) principle of reinstatement, where it is satisfactorily established that reinstatement in some other place is bona fide intended, there being no general market for the property for the purpose for which it is devoted (the purpose being a public purpose) and would have continued to be devoted, but for compulsory acquisition. Here compensation will be assessed on the basis of reasonable cost of reinstatement; (v) when the property has outgrown its utility and it is reasonably incapable of economic use, it may be valued as land plus the break-up value of the structure. But the fact that the acquirer does not intend to use the property for which it is used at the time of acquisition and desires to demolish it or use it for other purpose is irrelevant; and (vi) the property to be acquired has ordinarily to be valued as a unit. Normally, an aggregate of the value of different components will not be the value of the unit.......
These are, however, not the only methods. The method of determining the value of property by the application of an appropriate multiplier to the net annual income or profit is a satisfactory method of valuation of lands with buildings, only if the land is fully developed, i.e., it has been put to full use legally permissible and economically justifiable and the income out of the property is the normal commercial and not a controlled return, or a return depreciated on account of special circumstances. If the property is not fully developed, or the return is not commercial, the method may yield a misleading result.'
33. Mr. Pranab Pal, the learned counsel for the transferees, contended that the entire property was tenanted. He relied on the decree dated 25th July, 1969, passed by the learned judge, 4th Bench, City Civil Court, Calcutta, in Title Suit No, 524 of 1966 (Indian Cable Co. Ltd. v. Jayanta Nath Ghosh) granting a permanent injunction restraining the defendant, his agents, servants and/or factors from making any construction or digging earth or making holes whatsoever or raising any wall in the plaintiff's tenancy at 8, Lower Circular Road (Acharya Jagadish Chandra Bose Road), Calcutta-17, or any part thereof and/or doing anything in any way changing the nature or character of the said tenancy and/or encroaching upon its tenancy rights and not to enter in or upon the open space (vacant land) including the lawn to the north of the main building and out-houses up to the northern boundary of the said premises which was noted and considered by the Tribunal. Mr. Pranab Pal, therefore, submitted that in view of the said injunction no construction was possible on any part of the vacant land in the said property. In any event, under the building regulations under Calcutta Municipal Act, 1951, not less than 50% of the land had to be kept vacant in the area where the said property was situated. The question of the land lying vacant and the feasibility of construction thereon were neither mooted by the revenue before the competent authority nor did the competent authority consider the same nor did it proceed on that basis. This was a pure question of fact and could not be raised by the revenue in this appeal. Mr. Pranab Pal submitted that the Tribunal in arriving at its conclusions considered all the facts and materials placed before it. It considered not only the instance of sale in 1969 but also of sales in 1964 and 1974 as well as the wealth-tax assessments and computation of capital gains tax in the income-tax assessment of the transferor.
34. Mr. Pranab Pal drew our attention to the undisputed facts in this case already noted by us earlier, and cited the following decisions in support of the order of the Tribunal.
(a) CED v. Radha Devi Jalan : 67ITR761(Cal) relied on by the Tribunal. Here, a certain property was being valued for assessment of estate duty which was in the occupation of an old tenant paying a monthlyrent of Rs. 1,600. The Appellate Tribunal held that the fair method of estimating the valuation of the property was the rental basis. The revenue came up in a reference before this court and contended that the Tribunal should have determined the real value of the property on the basis of what the property would fetch if sold in the open market at the relevant time. This court, in rejecting such contention and upholding the order of the Tribunal, observed at pages 765 and 766 as under :
'The contractual rent of Rs. 1,600 per month was payable by the tenant in respect of a building, which at the material time was governed by the West Bengal Premises Tenancy Act, 1956. Under the operation of the various rent restriction Acts, which have been operating in the State for now well over quarter of a century, landlords have lost the right of letting out their houses at any rent they choose and of evicting tenants on such grounds as appeal to them. Contractual relationship between landlords and tenants have given way to statutory relationship imported by successive rent restriction Acts and the position now is that houses may be let out only at 'fair rents' and at no more. If premises can no longer be let out at such rent as the landlord may expect or aspire, then, however costly the premises may otherwise be, their value have to be determined on the basis of the limitations imposed by the statute.' It was further observed at pp. 769-770 as follows:
'When a person buys a property, he does so for two purposes, (a) to obtain an annual income, (b) to obtain security for his capital. If the property was merely a vacant land, it might be developed and made to yield such income, as it was capable of, in a metropolitan area where some sort of scarcity for accommodation prevails. The property was, however, burdened with a tenanted house and the income therefrom was controlled by a statute. This control on income was bound to react on the value of the property and the application of the land and building method would not have been a proper method in the instant case.' (b) J. N. Bose v. CWT : 104ITR83(Cal) . Here, it was held by this court in the context of the W.T. Act that there were different methods of valuation of immovable property and the one suitable for a particular property would depend upon the particular features thereof.
(c) CED v. Bijay Kumar Khandelwal  108 ITR 864. In this case, the Assam High Court confirmed the order of the Tribunal in determining the market value of a property under Section 36 of the E.D. Act, 1953, that the gross rental value was the proper method to be applied to ascertain the market value of the property concerned.
(d) Smt. Bani Roy Chowdhury v. Competent Authority : 112ITR111(Cal) . Here, the validity of proceedings for acquisition of the property of the petitioner initiated under Section 269D(1) of the I.T. Act, 1961, by thecompetent authority was challenged by the petitioner in a writ petition under Article 226 of the Constitution. The following observations made by this court were relied on (p. 121) : 'As stated above the scheme of the provisions of this new Chapter is to counteract the evasion of tax in certain cases. It is to be appreciated that the competent authority has to take note of the said fact and proceed on that basis. It is not that in any and in every case wherever the apparent consideration is less than the real market value that it must form its reason to believe in the manner as provided in Clauses (a) and (b) of Subsection (1) of Section 269C of the Act. It has to take a rational view of the matter. In the process of the formation of its belief it would be one of the most vital factors for it to consider whether or not the transaction was so entered into with the object of evading taxes and it is incumbent upon it to record its reasons for arriving at the belief. Merely quoting the section would not do. The relevant factors which led him to believe must be recorded.'
35. We are unable to accept the contentions of Mr. B. L Pal that the said property was not fully developed or was not fully tenanted. It is undisputed that the total land area of the property is 1 bigha 5 cottahs 3 chittaks and 4 sq. ft. According to the Valuation Officer of the revenue the land which was lying vacant was 115 ft. x 45 ft. corresponding approximately to 7 cottahs 3 chittaks. There is no evidence to show whether this vacant land was one contiguous plot or divided into several plots unconnected with each other. On a simple arithmetical calculation the developed or built up area of the said property covered by the main building and the out-houses was approximately 18 cottahs. Under the prevailing building regulations of the Corporation of Calcutta in the area where the said property is situated 50% of the total land has to be left open in constructing a building. Thus, at least, over 12 cottahs of land had to be left open but the land left open being approximately 7 cottahs 3 chittaks was less than the requirement under the said building regulations. In our view, there is, therefore, no scope for development of the said property either immediate or in the near future, so long as the existing building and outhouses remained and so long as the tenants did not vacate, who are, no doubt, protected under the rent control legislations.
36. In Rustom Cavasjee Cooper : 3SCR530 , the Supreme Court was dealing with the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969, and considered what would be the fair compensation where the property was compulsorily acquired and not what would be the fair market value when the same was voluntarily transferred by the owner for consideration, The Supreme Court observed that the application of the yield or rental method in valuing a vacant business premises in urban areas on the basis of the estimated rental income would lead to misleading results and would not ensure adequate compensation. In that context, the Supreme Court, at page 387 of the report, observed as follows:
'Under Explanation 2, Clause (1), 'ascertained value' in respect of buildings which are wholly occupied on the date of the commencement of the Act is twelve times the amount of the annual rent or the rent for which the building may reasonably be expected to be let from year to year reduced by certain specific items. This provision, in our judgment, does not lay down a relevant principle of valuation of buildings. In the first place, making a provision for payment of capitalised annual rental at twelve times the amount of rent cannot reasonably be regarded as payment of compensation having regard to the conditions prevailing in the money market. Capitalization of annual rental which is generally based on controlled rent under some State Act at rates pegged down to the rates prevailing in 1940 and on the footing that investment in buildings yields 8J per cent. return furnishes a wholly misleading result which cannot be called compensation. Value of immovable property has spiralled during the last few years and the rental which is mostly controlled does not bear any reasonable relation to the economic return from property. If the building is partly occupied by the bank itself and partly by a tenant, the ascertained value will be twelve times the annual rental received, and the rent for which the remaining part occupied by the bank may reasonably be expected to be let out. By the Act the corresponding new banks take over vacant possession of the lands and buildings belonging to the named banks. There is in the present conditions considerable value attached to vacant business premises in urban areas. True compensation for vacant premises can be ascertained by finding out the market value of comparable premises at or about the time of the vesting of the undertaking and not by capitalising the rental--actual or estimated. Vacant premises have a considerably larger value than business premises which are occupied by tenants. The Act instead of taking into account the value of the premises as vacant premises adopted a method which cannot be regarded as relevant. Prima facie, this would not give any reliable basis for determining the compensation for the land and buildings.'
37. The discussions in Parks on Valuations cited by Mr. B.L. Pal does not in any way advance the case of the revenue. According to Parks if a property is fully developed and tenanted and is fetching a rent which is likely to be maintained for years to come, its valuation should be made by applying the 'rental' method. The 'land and building' method might, however, be applied even in such a case only to check the valuation arrived at by the'rental' method but it is not the opinion of Parks that the result arrived at by 'laud and building' method in such a case is to be accepted in preference to that arrived at by the 'yield or rental' method. On the contrary, the opinion of Parks is that in valuing a property the depreciated value of the building cannot even be deducted from its valuation arrived at by the rental method.
38. The said property is fully developed and let out to tenants in its entirety. There is no dispute as to the quantum of rent realised which has been duly ascertained and such rent is likely to remain unaltered for years to come. The method indicated in Parks on Valuations at page 37, therefore, clearly applies to the facts of this case and, in our opinion, the Tribunal rightly applied the 'yield or rental method' for valuation in the present case.
39. We find that the Tribunal had correctly applied in this case the principles laid down in Radha Devi Jalan  67 ITR 761 (Cal) with which we are in entire agreement.
40. Tenancies in Calcutta are statutorily controlled by the rent control legislations and its impact on the valuation of tenanted properties cannot be ignored. In our view, it would be unreasonable if not absurd to value such property on the basis of a notional market value in disregard of such control. Whether the transferees purchased the said property with an idea of construction of a multistoreyed building therein in future or for some other purpose was wholly immaterial in determining the market value of the said property on the date of its purchase by the transferees.
41. The Valuation Officer of the revenue in valuing the said property followed the 'yield or rental' method and, having arrived at a figure, he added to it the value of an imaginary future reversionary value of the land. We have not been able to appreciate and understand either the principle or logic behind this 'reversionary' method of valuation applied by the said Valuation Officer. Mr. B.L. Pal was also unable to place before us any authority in support of such a method. The passage cited by Mr. B. L. Pal from page 38 of Parks on Valuations shows that when a property is valued on rental basis the result is the value of the land and building taken together which cannot afterwards be apportioned. The Valuation Officer under the method adopted by him, has taken the value of the land twice, once in arriving at the figure by the 'yield or rental' method and again in applying the 'reversionary' method. This in our view was wholly wrong.
42. The competent authority in coming to his conclusions did not rely on any relevant evidence except the report of the said Valuation Officer. No comparable units of other sales were brought on record by him. The vacant land at No. 47, Shakespeare Sarani, sold on 29th August, 1964, at the rate of Rs. 27,468 per cottah or the instances of sales of. two other vacantplots of land in 1974, one near the crossing of Royd Street and Acharyya Jagadish Bose Road at more than Rs. 24,000 per cottah, and the other at a distance of about 400 yards to the south of the said property at Rs. 55,000 per cottah; could hardly be said to be comparable units with the said property having an old building and out-houses wholly tenanted and subject to the rent control legislation, while all the said alleged comparable units were vacant lands with prospects of immediate development.
43. For all the above reasons, it cannot be said that the order of the Tribunal was perverse being inconsistent with the evidence on record or contradictory to it or was arrived at without considering or ignoring any material fact.
44. We had occasion to deal with a similar case in Income-tax Appeal No. 5 of 1976 instituted CIT v. Ashima Sinha (since reported in : 116ITR26(Cal) ), where similar arguments were advanced by the parties and the valuation report of the Valuation Officer was also made on similar lines. We have taken the same view in that appeal as in this appeal and the said appeal was dismissed by us on the same reasonings and grounds as in this case.
45. The appeal, therefore, fails and is dismissed with costs. Interim orders passed herein will continue for a period of eight weeks from date.
Dipak Kumar Sen, J.
46. I agree.