INSTITUTION OF VALUERS · Goa - 403 602. Mob.: 9422635027 E-mail : ... Plot No. 3, Parwana Road, Adjacent to ... major projects assignment in ...

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Council Page

In case of any legal disputes with the Institution of Valuers, all matters/ disputes are subject to the exclusive jurisdiction of District Court, Delhi only.

MEMBERS OF COUNCILSHRI A.V. MANJUNATHNo. 62, 3rd Floor, Vishalakshi Building,Lions Eye Hospital Road, SiddaiahRoad, Bengaluru-560002. Telefax : 080-2233733Mob.: 9845164247, 9341228949E-mail : [email protected] B.B. SHARMAB-5 & 6/ 4259, Vasant Kunj,New Delhi-110 070, Ph.: 011-26895923Mob.: 9811026636E-mail : [email protected] I. RAMA RAOH. no. 1-66-14, Plot No. 56, Sector-II,M.V.P. Colony, Visakhapatnam-530 017.Ph.: 0891-3292993, Mob.: 9652992396E-mail : [email protected] JAVAHAR R. RAVAL111-A, Behind Umesh Kiran, BhagatSingh Road, Vile Parle (W),Mumbai-400 056, Ph.: 022-26712154Telefax : 26714789, Mob.: 9869000070SHRI L. BALAJIPlot No. 11, SBI 1st Colony, 3rd Street,(B/h Reliance World), Bye Pass Road,Madurai - 625 010. Ph.: 0452-4375336,Mob.: 9842168351,E-mail : [email protected] N.R. RAON.R. Associates, 301, Sai Priya Apts.,Jayanagar, Gudimalkapur, Mehdipatnam,Hyderabad - 500028. Ph.: 040-23533641,Mob.: 9866733100, 9391033100,E-mail : [email protected]

SHRI P.C. GUPTAAF2, Sitara Apartments, B/h ChoguleMaruti Car Workshop, Fatorda, Margoa,Goa - 403 602.Mob.: 9422635027E-mail : [email protected] R.S. BAABUHi-Tech Surveyors, 3A, J.P. Tower,7/2, N.H. Road, Nungambakkam,Chennai - 600 034.Ph.: 044-(R) 65444499 (O) 28226020,Fax : 28259749, Mob.: 9444071453,E-mail : [email protected] SANDIP KUMAR DEB36, Sadananda Road, Kolkata-700026Mob.: 9830047666E-mail : [email protected] S. KRISHNAMURTHYNo.19/13, Velu Street, Veena Gardens,West Mambalam, Chennai-600 033.Ph: 044-24747198, Mob: 09444079527E-mail : [email protected] VR. NA. ARUNNBharani Prestige Apartment, E, 25-C,Warners Road, Cantonment,Tiruchirappalli - 620 001.Mob.: 9865395000, 9080965665E-mail : [email protected] MEMBERSSHRI KHEM RAJ AGARWAL411, Gagan Vihar, Krishna Nagar,Delhi-110051. Ph.: 011-22549504,22534711, Mob.: 9810556226,E-mail : [email protected] NEERAJ KAPOOR28, CSC, Transport Centre, Rohtak

INSTITUTION OF VALUERS(Registered under the Societies Registration Act XXI of 1860)

Plot No. 3, Parwana Road, adjacent to Bal Bharti Public School, Pitampura, Delhi - 110034.Phone Nos. 011-27012855 / 57, Fax No. 011-27012856

E-mail : [email protected], Website : www.institutionofvaluers.netCOUNCIL FOR 2013-15

PRESIDENT: SHRI P.K. THIAGARAJAN“Subagha”, 131/ 55, Ganapathy Nagar, T.V. Koil, Tiruchirappalli - 620 005.

Ph.: 0431-2432666 Mob.: 9842463666 Fax : 0431-2433666, 2730073, E-mail : [email protected] H.T. SHAH203-206, Jaldarshan, Nr. Old Court,Nanpura, Surat-395 001Ph.: 0261-2470092/93,Mob.: 9825134484E-mail : [email protected]

SHRI S.S.K. BHAGAT270, Prasad Nagar,New Delhi-110 005.Ph.: 011-25723614 Mob.: 9810626140E-mail : [email protected]

HON. TREASURERSHRI A.P. SAXENAC1/ 44, Safdarjung Dev. Area,New Delhi-110 016 Ph.: 011-2652318226567958, Mob.: 9811039606E-mail : [email protected]

HON.GEN. SECRETARYSHRI P.C. GOEL10-A/7, Shakti Nagar, Delhi-110 007.Mob. : 9818462906E-mail : [email protected]. JOINT GEN. SECRETARYSHRI VINAY K. GOEL1475, 14th Floor, Agarwal CyberPlaza-II, Netaji Subhash Place,Pitampura, Delhi - 110 034Phone: 011-42470379, 27355642,Mobile No. 9810161103E-mail: [email protected]

Road, Punjabi Bagh, Delhi-110026.Telefax : 011-28313406,Mob.: 9811188915, 9311188915,E-mail : [email protected] S.C. KAUSHAL190-C, DDA Flat, MIG, Rajouri Garden,New Delhi-110027. Mob.: 9810499124,E-mail : [email protected] SUBASH CHANDRA SABATC/o Haripriya Associates,Plot No.1127/3048, Jayadurganagar,Bhubaneshwar-751006, Ph.:0674-2572433,2570337, Mob.: 9437002433, 9338592433,E-mail : [email protected] O.P. SHARMA8/96, Sector-8, Indira Nagar, Lucknow-226016, Mob: 9335918885, 8004745922E-mail : [email protected] V.B. SAXENAKothi-A-2/217, Paschim Vihar,New Delhi-110063. Mob.: 9999977509AUDITORSM/S. JITENDER R. DEO & COMPANYChartered Accountants1649, Main Bazar, Paharganj,New Delhi - 110 055. Ph.: 011-23580241Mob.: 9810018490,E-mail : [email protected] ADVISERSUSHIL K. AGGARWAL ADVOCATEChamber # 53-A, Block-X, Civil Side,Tis Hazari Court, Delhi - 110 054Ph.: 011-27180765, Mob.: 9818229693,E-mail : [email protected]

Indian Valuer / June, 2015 663

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Editor in ChiefShri S.S.K. Bhagat270, Prasad NagarNew Delhi-110 005Phone : 011-25723614E-Mail: [email protected]

Managing EditorShri V.B. SaxenaKothi-A-2/217, Paschim Vihar,New Delhi -110 063.Mobile : 9999977509

Editorial BoardDr. Ashok NainCol. B.B. SharmaShri Kedar ChikodiShri Mahendra KakuleShri R.S. BaabuShri Sandip Kumar DebShri Syamales Datta

The publisher cordiallyappeals to all our valuablemembers to give theiradvertisement so as toreach to 25,000 readersacross the country.

Note : The Articles published in thisissue are the authors’ statements andopinions only and are not necessarilyendorsed by the Institution of Valuers asa body. The Editor assumes no re-sponsibility for the statements and opin-ions expressed herein.

Non- receipt of the Indian Valuer shouldbe intimated to the Institution of Valuers,Plot No. 3, Parwana Road, Adjacent toBal Bharti Public School, Pitampura,Delhi - 110 034. before 15th of the nextmonth. A replacement copy will be sentagain free of cost under certificate ofposting. In case of any complaint afterthe schedule period, the replacementcopy will be charged at Rs. 100/-

CONTENTSI. Editorial

Non-performing Assets (NPA) andtheir impact on the economy —R.S. Baabu 667

II. Articles1. Fake Documentation: Cautions

& Precautions —Ar. D.L. Naware 6692. Empanelment of Valuers—steps

needed to protect the profession—V. Srinivasababu 6733. How to Build a Career in Valuation——V. Srinivasababu 6764. Could aspects like Vasthu deficiencies can be

considered when making a valuation—C.H. Gopinatha Rao 6855. Valuation training program through

major projects assignment in —Ms. Neha PatelEngineering Course & —Dr S.K. Mahajan 690

III. Judgment1. Settlement of Cases—Application for settlement 7032. Income from undisclosed sources—Delection of... 707IV. General1. Comparison of the Rates of Interest

yielded by the residential propertieswith indices of other forms of investments—A Case Study at Indore —K.C. Jhavar 712

2. Pitfalls/Difficultires experiencedwhile carrying out property valuation work—A.C. Bhide 717

3. Effect of fungible F.S.I. on valuationof Immovable Properties —Bharat Shah 726

4. Cost of Construction of SSM Instituteof Engineering & Technology Buildingin Palani Road, Kuttathupatti Village, DindigulTaluk & District, Tamil Nadu State, South India.Under S. Chennimalai Gounder CharitableTrst @ Tiruppur—Front Commercial Block(Contd. from previous issue) —A. Balasubramanian 733

5. Valuation of Strength of Structural SteelAngle Sections, under IS Code: 800-1984—A Case Study with Equal vis-a-visUnequal Angles —Manoj Kr. Varshaney 742

6. A few Truths & whispers aboutvaluer's experiences —S.R. Rama Murthy 753

7. Registered Valuer under the Companies Act, 2013opportunities Vs Responsibilities—CS (Dr) S.K. Jain 758

8. Capital Rate, is it pulse of real estate?—Sachin Garg 764V. VIEWS OF MEMBERS 768VI. Election Notice for Council for the Years 2016, 17 & 18 771VII. NEWS AND NOTES 773VIII. List of LM enrolled during the month of March 2015 780

INDIAN VALUERMONTHLY

Vol. XLVII JUNE 2015 No. 6

664 Indian Valuer / June, 2015

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

A word from the Honorary Joint General SecretaryInstitution of Valuers has come a long way to create anenvironment, where the organizations concerned with theprofessions are bound to establish a dialogue with theInstitution. For a long time, the problems faced by ourfraternity in relations with the banks were beingcommunicated to the banks and their branches, but to ofno avail.

In this scenario, an affirmative approach by IndianBanks Association (a forum of all banks to work uniformlywhether in working or any other matter affecting all banks)has taken the initiative to establish a dialogue between thebanks and the valuers.

Banks in their lending process are dependent upon theopinion formed by a valuer. Valuer on his part, with

integrity, knowledge of all the aspects of valuation procedure be it the legal, financialor geophysical factors etc. and an acumen for evaluating a product, gives his opinionto the banks.

Thus, a professional relationship, which has its base in mutual co-ordinationachieving a cycle of events, involving lending based on evaluation of security, projectbeing built and then return of funds thereby fulfilling aspirations of many individualsin the entire process.

On a brighter note, our fraternity has been doing a commendable job in achievingthis objective playing a pivotal role and deserves to be treated accordingly. Betterworking atmosphere and economically healthy leading to qualitative outputs are needof this hour for the fraternity.

AIV Autumn (August) Examination 2015Branch - Real Estate Valuation

Eligibility–Diploma/Degree in Engineering/Surveying/Architecturefrom any recognised Institution in India

Age – Minimum 19 years as on the date of applicationFor Details and Application Kit Please Contact on the following address:

Institution of ValuersPlot No. 3, Parwana Road,

Adjacent to Bal Bharti Public School,Pitampura, Delhi – 110 034.

Telephone Nos.: 011-27012855 / 57Cell No.: 9810161103 E-mail : [email protected]

Last Date of Receipt of Completed Application Form–JJJJJune 30,une 30,une 30,une 30,une 30, 2015 2015 2015 2015 2015

Vinay K. GoelHon. Jt. Gen. Secretary


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

IMPORTANT ANNOUNCEMENTThe Council of the Institution of Valuers has decided to hold this year’s 5th IndianValuers Congress, 46th All India National Seminar on “Immovable and MovableAssets” at Lucknow (Uttar Pradesh) on 18th, 19th and 20th December, 2015.Lucknow, the city of gardens is the capital of Uttar Pradesh. This city is also knownas the golden city of east and one of the finest cities of India. Lucknow derivesits name from Lakshman, the Lord Rama's younger brother. Lucknow is situatedat an alitude of 123 meters above the sea level on the banks of the Gomti riverin the heart of eastern UP and surrounded by the unrelentingly flat Gangetic plain.Lucknow was the principal centre of the erstwhile Awadh province. Even whilekeeping pace with modern developments, Lucknow has preserved its golden pastand its sublime culture - the Lucknawi Tehzib. Lucknow has also been the homeof various poets and writers of Hindu-urdu literature, dance, music and deliciouscuisine. The fascinating 'Chikankari' or exquisite shadow work embroidery on finemuslin cloth is also known worldwide. Hindu, Urdu and English are the mainlanguages which are spoken in Lucknow.Lucknow has got many historical monuments like Bara Imambara, British ResidencyLucknow, Chattar Manzil, Jama Masjid, Rumi Darwaza, Clock Tower, Moti Mahal,Bhul Bhul Bhulian, Hussainabad Imambara etc.Lucknow city is popularly known as the 'the city of Nawabs'. Situated on the banksof the river Gomti, it dates back to the time of the Suryavanshi dynasty. Lucknow,the capital of Uttar Pradesh, was founded by Nawab Asaf-ud-Daula. In the oldentimes, it served as the capital of the nawabs of Awadh and it is one of the reasonswhy it is also called as the city of the Nawabs. The era of the Nawabs bestowedLucknow with the courteous culture as well as mouthwatering delicacies for whichit is famous today. Travel to Lucknow with us to find more information on thisinteresting city!Today, Lucknow is a vibrant city that is witnessing an economic boom and is amongthe top ten fastest growing non-major-metropolitan cities of India. It is the secondlargest city in Uttar Pradesh state. The unique combination of its cultured graceand newly acquired pace is its most promising feature that augurs well for the future.

CONNECTIVITYBy Air : Lucknow can be easily reached by air as the place has its own independentairport. The airport at Lucknow is located at a distance of around 14 kilometersfrom the city center at a place called Amausi. Flights operate from Amausi to nearbyplaces like Delhi, Patna, Ranchi and also other cities like Mumbai.By Rail : There are two main railway junctions at Lucknow. One is at Lucknowcity center itself and the other is at Charbagh, which is located at a distance ofaround 3 kilometers from the city center. Trains from all major places near andaround Lucknow ply daily to this place.By Road : Lucknow can be easily reached from Delhi, Kanpur, Agra, Allahbad andDehradun. Highways from all these places connect them with Lucknow. The majorhighways passing through Lucknow are N.H.-25, N.H.-28 and N.H.-56.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Prime Minister has made innumerablevisits overseas for garnering foreign in-vestments apart from other policy pursuitsin terms of security to building regionalrelationships and at the same time confi-dence building through direct contact withthe Indian Diaspora in various countries.These do have a telling effect for the futureas a nation.

What we are immediately concerned isthe developments in the financial sectorwhich forms the basis for future develop-ment. Going by the recent reports appear-ing in the press, we find that the NPA hasgradually risen in the recent past raisingeyebrows from those who are monitoringand initiating corrective action. The grossNPA as percentage of loans has risen inthe quarter from September 2014 to De-

cember 2014. On the analysis of sectorwiseNPA, there has been a rise allroundexcept the retail loans. If we consider theindustrywise situation for the same period,the condition is dismal except for coal andcement.

The end result of such a scenario isthat the extension of credit facilities bybanks has literally dropped with the banksviewing with suspicion any grant of loanto corporates. This predicament does notaugur well for the lender as well as theborrower leading to stagnation of economicactivity as a whole not only for any specificsector but the nation at large.

The current scenario as discussed hasforced the banking institutions to directtheir attention on the NPAs for speedyrecovery of the loans or revival of theeconomic activity to put a specific unitsector on track. This by no means is aneasy task judging by the environment asprevalent.

What we from the valuer fraternityshould be concerned is to define our role

EDITORIAL

NON-PERFORMING ASSETS (NPA) ANDTHEIR IMPACT ON THE ECONOMY

—R.S. BaabuB.E., M.I.E., F.I.V.

Chennai(F. 6450)

✍

The first year of the NDAGovernment has witnessedseveral changes with manypositives and at the sametime interlaced with a de-gree of negativity as well.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

in the context of the banking industryembarking on a course of action to liqui-date the NPAs to build up for futuregrowth. The role of the valuer to criticallyvalue the NPAs become relevant in thepresent day context. Valuer whether be itfor land and building or plant & machineryor any other field should equip himself withconcrete in their respective field of valu-ation to meet the requirements of the

banks. The valuation of assets must takeinto account a pragmatic approach and berealistic in content. A valuer needs tounderstand his responsibilities in assistingthe banks in fulfilling the task set beforehim. This could be arduous but the tonecould be set along with the banks in anation building exercise through economicdevelopment rid of the NPAs as they standtoday. IV

Institution of Valuers Ranchi (Jharkhand) Branchis organising a National Seminar

“Promoting Ethics in Valuation Amongst Stakeholders”

On 23rd August, 2015 at Hotel Park Prime, Morabadi, RanchiEarly Bird Registration fee is Rs. 1000 per IOV member till 30th June, 2015Full Papers with abstract and author’s short biography are invited by 15th July, 2015on following Sub-Themes1. Facilitating ethical valuation & its use: Information Asymmetry, Honest Mistake,

Negligence and Fraud2. Types of fraud (identity, asset and document based etc) and its impact on fraud

prevention strategies3. Dealing with fraud: Case analysis of actions initiated and the role of stakeholders4. Overview of legal cases relevant to unethical valuation5. Understanding recourse by bankers/ lenders and valuers

For Brochure/ Details contactEmail: [email protected], M = 9431170378, 9430732061


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

If we study the economic progress of ourNation we find that up to 1990 the eco-nomic progress was limping becauseBankers had a psychology to financeBusiness communities only. After postreforms Ex-P.M. Dr. Manmohan Singhopened up the Indian economy to theGlobalization. Soon Indian economy blos-somed & people from every walk of lifestarted lining-up for Financial assistancethrough Loans, Credits, Dividends &discounts. However the Lenders (particu-larly Banker’s ) psychology did not changeso fast. The value of intellectual property,for e.g. Educational qualification, Research,Innovations etc. is still today not consid-ered as “Collateral Security” leave asidea valuable asset. Public Sector Banks &Private Sector Banks churned out variousmethods to increase their lending base(Loans) & because of high volume of theapplications, it was not possible for themto go through each & every aspect & laiddown procedures.

As we see today, the procedure ofgranting loan on any head (Business,Education, Home etc.) we find that nor-mally an Applicant approaches the Bankeralong with his credentials which include,his Identity Proof, Address Proof, Income

FAKE DOCUMENTATION: CAUTIONS & PRECAUTIONS—Ar. D.L. Naware

B.Arch, FIIA, FIVNagpur

(F-1093)

✍

& Expenditure & Balance Sheet, the pur-pose of loan, report on his proposedactivity with estimates on financial as aproof of feasibility. He also produces de-tails of his property or Guarantor’s prop-erty (as a collateral security) which in-cludes copies of documents such as Sale-Deed, Gift Deed, Lease Deed etc., recordsof right such as Property Card, City SurveyRecords, Revenue proofs such as taxpaid receipts, no encumbrance Letters etc.The Banker examines & recommends orrejects & forwards the application to higher-ups, usually Zonal Office, who are appro-priate Sanctioning Authority. Once anApplication is approved by Higher-up withany more details, conditions etc. the Ap-plicant is asked to obtain certain proofsthrough empanelled Advocates, Valuersnamely, Title Report & Valuation Reportrespectively. It is important to note that theconcerned Manager or Officer acquires anin-depth information & forms his opinionregarding even the value of the propertyto be pledged, since he has more accessto the information than the emplaned per-sonnel have.

It is expressed by some of the Valuersthat caution has to be exercised in accept-ing Collateral Security from Third parties.


ARTICLESARTICLES

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I agree that the caution has to be exer-cised by the Banker in the first place &it is not a duty of the Legal Adviser orValuer to opine on third party angle.Whether a property offered is of third partycollateral or not, undoubtedly, the duty ofLegal Advisors is restricted to verificationof title only whereas Valuer's assignmentis limited to his opinion (not a certificate)about the value of the property.

It is Banker’s duty, whether to acceptthird party collateral or not. I have ob-served that after obtaining Title Report &Valuer’s Report, Bankers have declined toextend loan facility. There are severalother criteria, apart from Title certificate &Valuation report, such as the credibility,capacity to repay, as well as doubtfulfeasibility, to name a few. Inshort, Valuer’srole in the process is of a tip of ice burg& it should be examined from this angleonly.

The fraudsters always find out novelways to commit frauds. They are wellversed with electronic gadgets, printers,plotters, various applications etc. For e.g.there are duplicate passports which passeven the sophisticated electronic gadgets& most of the time they get cleared. Theoriginal passports & duplicates have solittle difference that only highly trained &very high sophisticated gadgets can detect.The fake currency is another well knownmenace which creates epidemic. The fakeStamp Paper Scam committed by Mr.Telgi is also a glaring example. Undersuch circumstances it is fruitless to blamethe trio (the Branch Manger, Advocate &

Valuer). In India, every state has its ownmethod of documentation. There are nospecific formats for Sale-Deeds, Gift-Deeds, Agreements etc. Therefore bymerely comparing originals with a fake (?)document will not solve the problem. Thevery minor grammatical mistakes, alterna-tion & omissions of coma, full-stop, dotsetc. can change the meaning of whole text& only an expert can detect them. I havea doubt whether empanelled Advocateshave specific experience to examine suchdocuments . A Bank Manager is also nota fit person for this purpose. At this backdrop, if somebody puts, the Valuer in adock & makes him responsible (by almostgiving clean chit to the other two) then heis doing more harm than helping him, asevery Valuer’s job is to ascertain the value& form his opinion on the basis of docu-ments produced before him as well as hisobservations & analysis of the siterelated conditions. He is certainly not anexpert like, a forensic one, who has knowl-edge, experience & necessary authority tostate whether the documents are fake ornot. Even if the documents are fake & ifthe property is there, it still has a value.Banker has to take a decision in suchmatters. How a Valuer can be sued for aloss for which he is not remotely respon-sible? I have not come across a Letter ofAppointment of any Bank which requireshim to examine & testify the documentsproduced before him like a Forensic Ex-pert.

Of course there are frauds whereValuers have been punished for their faults.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

If the properties, they opinioned, did notexist, definitely they are blamed becauseit is their duty to visit & ascertain thewhereabouts of the property. Since a fewgood articles have been published in IOVMonthly magazines with dealt with thissubject, I don’t which to repeat varioussuggestions. However in my opinionfollowing additional suggestions may safe-guard the interest of concerned personnellikely to be effected because of frauds:

1. Bank should insist upon originaldocuments along with duly certifiedtrue copies attested by Notary,Gazetted Officer or the Registrar ofrespective fields. One set of eachcertified document should be givento panel Advocate & Valuer.

2. Apart from original Title documentsBranch Manager should obtain cer-tified True copies of City Survey,Akhiv Patrika & Property Card of alatest date (not earlier than 30 daysfrom the date of Application). Eachset must be given to Panel Advocate& Valuer.

3. If any copy of will is produced insupport of ownership then certifiedcopy of probate & succession cer-tificate should be obtained. If CitySurvey records & the contents of willdo not match, then the matter shouldbe brought to the notice immediately.

4. Panel Advocate should insist onexamining original documents & alsorecords of right. He should bring tothe notice of the Bank, any discrep-

ancies found.

5. In case of plot, Valuers should insistupon obtaining sanctioned layout plan& examine the dimensions shown inthe layout as well as mentioned inproperty documents. Sometimes theproposal for road widening ultimatelyreduces the plot area, whereasparticularly, old sale-deeds, do notshow such matters. It is a knownprinciple that the built up area inproportionate to FSI is permissibleon the minimum area of the plot outof 1) area as per Sale-Deed, 2) areaas per City Survey, & 3) area as persite conditions. Valuer should takecare in maintaining least of the areain his report for valuation since anyhigher area does not carry any valueor purpose.

6. Although Advocates & Valuers arenot experts in examining documents,they can surely critically examine thedocuments. If any method of commit-ting fraud is found out, it should beprivately circulated between all panelAdvocates & Valuers, as a caution.Normally the culprits follow similarmethods or a clear thread of fraudu-lent documentation is revealed whichis known as modus operandi & it iseasier to trace the whereabouts ofthe culprits provided a FI R is lodgedwith Police.

It is impossible to find out methods &means to curtail frauds altogether. It iscustomary to put blame on somebody


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

who is holding a week position, as ithappens with accident cases. Instead ofblaming each other & fighting court battlesfor a recovery, punishment etc., the sameenergy can be jointly utilized to bring theculprits on record & then proceeded withaction against them.

The position of Valuer is in fact notthan vulnerable as is expressed in someof the articles. The owners of the property,in most of the cases, are aware of frauds& sometimes they can be a party to theact also. The data of such frauds, alongwith names & address & nature of fraudcan be circulated & this information canbe handy to take precautionary measures.I suggest that Valuers must insist upon aformat of Letter Of Appointment as well asa declaration duly signed by the owner/applicant & must insist upon Indemnity

against any misrepresentation, error oromission (committed unknowingly or delib-erately) duly signed along with photoidentity & pan card will assist in locatinghis address, whereabouts etc. in case afraud is dictated. The Indemnity declarationcould be debatable in a court case but itwill protect the interest of the Valuer in longterm.

After all, Valuers as well as Advocatesreceive fees of a fraction of percentageusually less that 0.10% from the value ofproperty. Whereas the Bankers earn any-where between 12% to 15% in the overalltransaction besides Insurance, CashGuarantee, various service charges, Pe-nal interest etc. Naturally they should takethe entire burden of pros & cons of fraudson their shoulder instead of blaming /prosecuting the Valuer in particular.

MUST FOR VALUERSOF PLANT AND MACHINERY

VALUATION OF PLANT AND MACHINERYVALUATION OF PLANT AND MACHINERYVALUATION OF PLANT AND MACHINERYVALUATION OF PLANT AND MACHINERYVALUATION OF PLANT AND MACHINERYTheory and PracticeBy Late Dr. P.C. GUPTA

B.Sc. Engg. (BHU), M.S. (Tax. Tech.) MIT,Ph.D. (Mech. Engg.), I.I.T. USA, A.S.M.E. (Life), M.I.E., F.I.V.

The price of the above Book is Rs. 375/- and by Registered Post Rs. 400/-from the office of the Institution of Valuers, Plot No. 3, Parwana Road, Pitam Pura, Delhi-110 034.

This book can also be had directly from : Dr. P.C. Gupta, C-15, Vivek Vihar, Delhi-110 095.This book is also available with Jain Book Depot, C-4, PVR Plaza, Connaught Place, New Delhi-110 001.

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

vious instances, they had approved thedraft but not implemented. We hope thistime they will implement the approved draftfor empanelment of valuers. This articleis written in response to the latest pro-posed draft of IBA for empanelment ofvaluers.

The present state of affairs in valuationprofession certainly creates a vacuum inthe near future. It discourages peopleentering the valuation profession and alsothe existing valuers are frustrated andspoiling their spirit. A reputed and highlysuccessful valuer at Hyderabad has ad-vised me not to enter valuation professionand told me to continue as a civil engineer.After struggling for two years for empan-elment with banks, I understood that whathe said is correct. I have observed thatso many Engineers with 10 years profes-sional experience obtains membership inIOV and starts practicing valuation butquits after 6 or 7 months. Hence thereshould be a standard procedure for em-panelment of valuers.

EMPANELMENT OF VALUERS—STEPS NEEDED TOPROTECT THE PROFESSION

—V. SrinivasababuM.I.E., F.I.V.

Hyderabad(F. 22713)

✍

The criteria for empanelment of valuersshall be reviewed properly and modifiedappropriately.

1. Educational Qualifications:- This as-pect shall be considered in 3 categoriesi.e. Existing Valuers, Novice Valuers andFuture Valuers.

Existing Valuers :- The existing valuerswho are empanelled with banks may behaving experience ranging from 2 to 20years of experience in valuations and theyme in the age group of 40 to 60 years.So it is not fair to tell them “Study and passM. Sc valuation or 6 months course invaluation before December-2017”. There isno such rule in any profession in the world.Considering their age and experience, it isnot possible and not essential. It is theresponsibility of the valuer or any profes-sional to update his knowledge. Theirgrowth in the profession depends on thequality of their reports. If a valuer is givingincorrect valuation reports, the bank willnot give valuation assignments to him. Itmeans the valuer has to strive to givegood reports to stay in the profession.Then, why it is needed to ask them tostudy academic courses? Instead, theycan be provided the necessary literatureto refresh their knowledge and basics in

IBA has issued a draft paperrecently on standardization ofprocedure of Empanelment ofvaluers. This is the 3 rd or4th time IBA has issued a draftletter on the subject. In pre-


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

valuation.Novice Valuers :- They may be valuerswith 0 to 2 years of experience, in the agegroup of 30 to 60 years. They may bewell experienced as an Engineer but newto the profession. But they can learn theprofession quickly and transform them-selves as valuers. When a civil engineercan become a computer programmer witha 6 months training, can’t he become avaluer in 6 months with the guidance ofa senior ? Knowledge and competencein the profession is essential but not theadditional qualifications. I am repeating, Ifa valuer is not giving proper valuationreports, he will not get assignments frombanks. It means the valuer has to raiseto the level of competent valuer to stay inthe profession.Future Valuers :- You may ask the futurevaluers who will start their profession infuture in 2018 or after to acquire qualifi-cations like M. Sc valuation etc. But thefee structure shall be revised to attractthem into the profession. A fresh graduateengineer will get Rs.25,000 salary whereas there is hardly any valuation firm whichcan offer that much salary to a freshengineer. A graduate engineer with 5years of experience can earn a salary ofRs. 50,000 and with 10 years experiencecan earn a salary of Rs. One lakh permonth. Unless the career prospects invaluation are brighter than those in engi-neering, why an Engineer will enter Valu-ation profession ? Hence the present feestructure is very low and needs improve-ment.

Classification of Valuers :- The compe-tency of valuers shall be decided basedon the quality of their valuation reports.Just because some senior valuers mademistakes in their articles published in amagazine, it does not mean that all seniorvaluers are incompetent. Hence the pro-posed classification of valuers as A, B andC is sufficient.

Empanelment procedure :- The existingprocedure of empanelment with banks ismost frustrating to the valuers. The branchmanagers are reluctant to accept andforward the applications from valuers. Ittakes months / years to forward the ap-plication from branch to the zonal office.Valuers has to go to the branch manytimes to request the manager for forward-ing his application. So the banks shouldissue a circular stating the prescribedprocedure for empanelment and then itshould be implemented. Even somemanagers are refusing to accept applica-tion from valuers stating they are busy orit is not their job etc. Although I havefulfilled the criteria for empanelment, I amgoing to bank branches from the last 2years but could not succeed in forwardingthe application for empanelment with mostof the nationalized banks.

It is very starange with popular privatebanks. I have done a valuation for aprivate bank whose value is Rs.3.85crores. The bank paid me Rs. 800 as afee. Also the technical managers areforcing to raise the value as they wish. Ihave stopped working for them. So the


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

situation in private banks is hopeless.

The following steps are needed for empan-elment.

a) Issue a circular stating prescribedprocedure for empanelment of valuers,clearly specifying, criteria, prescribedformat etc.

b) The branch manager should give ac-knowledgement of receipt of applica-tion.

c) The application should be processedwithin a specified period of 3 monthsor 6 months. The applicant should beinformed about empanelment. Heshould be informed even if he is notempanelled, stating the reasons for thesame. It helps the valuers saving theirtime and also to improve on theirshortcomings.

Removal of valuers:- The valuers shouldbe given a ‘show cause’ notice as a firststep for removal. The reply given by himshall be examined by a committee andbased on the recommendations of thecommittee, action for removal of valuers

shall be taken.Fee structure:- The existing fee structureof most of the banks is highly discouragingto the valuers. It should be thoroughlyexamined and revised suitably. They areexpecting a Competent service but payingonly clerical charges. Valuers are Profes-sionals like Engineers, Advocates, Char-tered Accountants. You can expect acompetent service only when you rewardthem suitably. In case of faulsts, Valuershave to face CBI enquiry, subject toremoval from empanelment. Just onemistake in one report of a bank will leadthem termination in all other banks. Theirname will be place in black list / cautionlist in IBA website. They will be defamedprofessionally and face rejection in thefamily and society. When there is sucha huge risk, what is the compensation forhis competent work ? In addition to properfee, the valuers should be provided to andfro transport for site visits. Then only youcan expect competent valuers to stay inthe profession. Just by placing punishingrules, you can not expect quality valuationreports.

ERRAERRAERRAERRAERRATUMTUMTUMTUMTUMThere is a typographical error in my article published in the May, 2015 issue ofIndian Valuer at page No. 544 Para No. 6 (S.No. 12) the date of sale is09-09-2012. The error is regretted.

- V. SrinivasababuF-22713 (Hyderabad)

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

INTRODUCTION

Shri. S. DESHPANDE, Former Chair-man, IOV, Hyderabad branch has pre-sented a paper on “VALUATION AS APROFESSION” on 21-02-2015 at themonthly meeting of IOV, Hyderabad. It ishighly informative and Inspirational to me.He has shown the complete picture ofvaluation. This paper is a reciprocation tohis presentation.

This paper is meant for novice valuers.In fact, I am not qualified to speak on thissubject because my career in valuation isstill under construction. I am still abeginner in valuation. However, I ampresenting this paper with a view that thenovice valuers can relate well to a maidenvaluer like me. I did some mistakes inthe beginning of my career which resultedin wastage of time. I wish to share myexperiences with you so that you can saveyour time and start your journey on theright path.

VALUATION IS A PROFESSION, NOTA BUSINESS

—Sri. S. Deshpande, F.I.V.

VARIOUS ENTRY POINTSThe persons with any one of the

following qualifications with necessary

professional experience can build a careerin valuation.

❍ B. E. / B. Tech.

❍ M. Sc valuation / M. valuation.

❍ AMIS (passing valuation examinationsconducted by the Institution of Survey-ors, India (Valuation Branch).

❍ Chartered / Professional member ofRoyal Institution of Chartered Survey-ors (RICS) or American Society ofAppraisers (ASA) or Appraisal Insti-tute (AI), USA.

Membership in Institution of Valuers(IOV), Delhi

Institution of Valuers, Delhi is the onlyprofessional body in India that approvesdifferent categories of valuers for differenttypes of assets. The membership in IOVis essential to build a career in valuation.The details of qualifications, professionalexperience etc required to obtain a mem-bership are available in the websitewww.institutionofvaluers.net

REGISTRATION WITH CBDT / INCOMETAX DEPARTMENT

One of the points in eligibility criteriafor empanelment with banks as a panelvaluer is registration with Income tax

HOW TO BUILD A CAREER IN VALUATION—V. Srinivasababu

M.I.E., F.I.V.Hyderabad(F-22713)

✍


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

department as a registered valuer. Thisregistration is also essential for doingvaluations of income tax like Cost ofconstruction, capital gains etc. Henceregistration with IT department is essentialto establish as a reliable valuer.

The qualifications, experience etc re-quired for registration are available in thewebsite of income tax department. Openthe website, then click on wealth tax rules.We will get all the details. The applicationshould be submitted in standard form – N.It is preferable to submit the application intriplicate with 3 set of documents. Achallan of Rs.1,000/- paid in specified bankand branch ( under miscellaneous head )shall be attached to the application. LatestIT returns for 3 years are also to beattached. A graduate in respective branchof engineering with 10 years of experiencein construction / designs / survey orvaluations is eligible for registration. Incase of M. Sc valuation or AMIS, 2 yearsof experience is sufficient. Membership inprofessional bodies like IEI, IOV is desir-able but not essential. The applicationshall be addressed to the concerned CCIT.It should be submitted in ITO office of yourconcerned area / circle, where your ITreturns are being filed.

The application will be checked by i.)Inspector : He will check the documentsattached, whether the applicant is fulfilledthe prescribed criteria. Then he will pre-pare a office note. It will be signed by ITO.Then it will be forwarded to Joint commis-sioner of income tax ii.) Then JCI willcheck and forward to CTI. Iii.) The

concerned clerk / OS in CTI office will putup to ITO and then to CTI. After approvalof CTI, it will be forwarded to CCIT. Iv.)In CCIT office, the Inspector / OS willcheck and put to CCIT. After approval ofCCIT, the registration letter will be issued.

As with any government office, It re-quires regular follow-up and we have toanswer their questions / objections. Weshould have a print out of the relevantwealth tax rules downloaded from IT deptwebsite. We should have a thoroughknowledge of prescribed criteria and sub-mit the supporting documents.

Usually it takes 3 to 6 months forobtaining registration. If we do properfollow-up, we can obtain registration evenin less than 3 months.

Many new entrants feel difficulty inobtaining registration of IT department. Itrequires through knowledge of prescribedcriteria i.e. relevant wealth tax rules, fol-low-up, patience / perseverance.

Ask for acknowledgement of receiptwhile submitting the application. If thesupporting staff are not responding prop-erly, meet the Officers and explain / re-quest for registration. Officers are kindenough to listen and help us in registration.I strongly advise to meet the officers witha spare copy of application before / aftersubmission. If you face any problem, askthe guidance of valuers who are alreadyregistered.

Getting work done in any governmentoffice in India is a challenge. So do notbe discouraged by their comments, objec-


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

tions etc. Listen them carefully and findan answer and then present your answerpoint-wise.

Remember, the important pre-requisitefor registration is the applicant shall not beemployed either with the government /public sector undertaking or with any privateemployer. He can practice as a consult-ant. It means the applicant shall not beon regular employment i.e. he should nothave a P.F. account with regular deposits.

If you got your registration, your firstmajor step in building your career in valu-ation is done.

BE A KNOWLEDGE GOONDA

—Dr. M. Venkateswara RaoF.I.V.

THE FOUR PILLARS OF A CAREER INVALUATION ARE

* EDUCATION

* TRAINING

* EXPERIENCE

* PRESENTATION / COMMUNICA-TION SKILLS

EDUCATIONMEETINGS:- IOV is conducting monthlymeetings. Valuers shall attend the meet-ings to learn from the talks given byseniors. They can interact with other valu-ers, ask their guidance and know answersfor their questions.SEMINARS:- IOV branches are conduct-ing seminars which are educative andmotivational to the valuers. They can also

network with other valuers to grow in theprofession. IOV Hyderabad branch isconducting 2 or 3 seminars in a year. Wecan attend all the seminars ( 2 or 3 in ayear ) conducted by the nearest IOVbranch. Also the seminar conducted byIOV Tiruchirappalli branch in the month ofAugust every year is of highest standardin India. Also the yearly National Seminarwhich will be conducted in the month ofDecember is a must to attain new energy.Novice valuers shall attend these semi-nars to build their career.

These seminars are the tools forcontinuous education in the profession.In these technological uncertain times,world is changing at a faster rate. Wehave to UPDATE ourself in the field ofvaluation. These seminars help us toUPDATE our knowledge.

BOOKS:- We can learn the concepts ofvaluation by reading the books written byexperienced valuers. Read one hour aday, we can become a master of basicsin valuation. Some of the books forImmovable category are mentioned below.Read at least 1 or 2 books a month. Thenyou will become master of valuation.

i.) Valuation of real properties – Shri. S.C.Rangwala

ii.) Elements of Valuation of Immovableproperties – Shri. R.K. Gandhi.

iii.) Valuation practice of Immovable prop-erties – Shri. CH. Gopinatha Rao

iv.) Practcal Valuation vol I to VIII – Shri.B. kanaga Sabapathy.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

v.) Myraid dimensions of Valuation – Shri.S.R. Ramamurthy.

You can ask senior valuers for suggest-ing books in other categories of valuation.

Also some of the general books whichwill help building any career are

a.) Rich dad Poor dad – Robert kiyosaki

b.) The seven habits of highly effectivepeople – Dr. Stephen Covey

c.) Yet, I am not defeated – Jyothi Reddy(Emesco publications)

MAGAZINES:- IOV is publishing a monthlymagazine of “INDIAN VALUER”. Valuersshall read it regularly to improve theirknowledge.

COURSES:- (optional) The followingcourses are available to enhance ourknowledge and qualification in valuationprofession.

a) Institution of Valuers, Delhi has an-nounced Graduate level Examinationin REAL ESTATE VALUATION whichwill be conducted in August-2015. Thelast date for submitting application is30, june,2015. All the details can beknown from the website or write [email protected]

b) Valuation examinations conducted byIOS.

c) M. Sc Valuation / M. Valuationd) Also PG diploma programmes in valu-

ation are also available.

BUILD YOUR REPUTATION,

YOUR REPUTATION BUILDS YOURCAREER.

—Robert Kiyosaki, author of“Rich dad Poor dad”.

TRAINING

There are no training programmesavailable in Institutes / professional bodiesin India to suit the needs of valuers.However the following two valuers arestriving hard to impart training to thebeginners as well as practicing valuerswith entry level and advanced levelcourses.

1.) Shri. S. Deshpande, Former chair-man, IOV, Hyderabad branch is offeringtraining programmes, Counseling andCareer guidance sessions. He is evenhelping as a MENTOR for the novicevaluers. I am one of the valuers who ishighly benifited by his Counseling andCareer guidance.

Shri. S. Deshpande can be contacted at040-23300344, [email protected]

Flat no. 308, Amrit apartments, Phase-II, Kapadia lane, Rajbhavan road,Somajiguda, Hyderabad – 500 082.

2.) Shri. B. Kanaga Sabapathy, FormerNational Vice-President, IOV is offeringtraining programmes at 7 levels, each levelwith a duration of 2 days at Tiruchirappalli.They are helpful for novice valuers as wellas practicing valuers. I have attendedlevel II programme on 13th & 14th march,2015 and learned many important pointsabout bank valuations.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Shri. B. kanaga Sabapathy can becontacted at 0431-2462232,[email protected]

1, Prestige flats, 6, Reynolds road,Cantonment, Tiruchirappalli – 620 001.

They are also giving certificates ofparticipation which are helpful while apply-ing for empanelment with banks.

DESERVE FIRST, DESIRE NEXT.

—Sri. B. Kanaga Sabapathy, F.I.V.

EXPERIENCEAfter reading some books on valuation

and attending some seminars, I came toa conclusion that I have learned the es-sentials of valuation and can do valuationsindependently. I have joined as an asso-ciate valuer of a reputed valuation firm atHyderabad. When I have shown thereports prepared by me to my seniorvaluer, he pointed out the mistakes doneby me. I was shocked and highly disap-pointed. But my senior valuer counseledme and said “ don’t worry. It is normalin the initial days of any valuer”. After aperiod of six months, I have learned manythings from him and he appreciated mywork.

The reason for my mistakes is that Ihave worked so many years as an En-gineer. So it took me some time fortransition from Engineer to Valuer. Al-though Valuation is not a rocket scienceand anybody can learn, it requires someguidance from a senior to change ourthought process from ESTIMATE to VALU-ATION.

Whatever may be the experience orexpertise of a Cardiologist, he can’t treatthe tooth pain. It requires the expertiseof a Dentist. Similarly, we may be anexperienced Engineer, but we require sometraining in valuation to become a compe-tent valuer.

So I advise the novice valuers to joinwith a senior valuer as an associate, atleast for a period of six months.

WE ARE NOT JUST VALUING THEPROPERTY, WE ARE ALSO VALUINGTHE RIGHTS IN A PROPERTY.

—Sri. G.V. Apparao Sharma,Vice-Chairman, IOV, Hyderabad.

EMPANELMENT WITH BANKSIn the recent times the Banks ( Na-

tionalised banks ) has changed the Criteriafor empanelment as a panel valuer. Pre-viously, they used to ask for membershipin IOV, Registration with IT department, 10years professional experience after gradu-ation in engineering. The experience canbe in construction / designs / surveying orvaluations. But now they are asking for5 years experience in Valuation after degreein engineering or 8 years experience aftera diploma. They are following the IBAguide lines for empanelment.

In my opinion, it is unfair asking 5years of experience after graduation. It issufficient to have six months of experienceunder the guidance of a senior valuer. Thecondition of 5 years experience discour-ages people entering valuation profession.The reason is that a fresh graduate en-


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

gineer will get Rs.25,000 salary where asthere is hardly any valuation firm whichcan offer that much salary to a freshengineer.

How to get empanelment with Banks?

Once we built our four pillars whichwere explained earlier, we can start ap-plying for empanelment with banks.

The beginners should not apply to thepopular private banks as their fee structureis very less, no free hand to the valuer,no learning opportunity. They should applyto the nationalized banks only.

I have initially empanelled with a pri-vate bank. Their managers used to pres-surize me to revise the value to an higheramount. If I don’t revise as per their wish,I will not get the assignments. But I startedfeeling that I am not working like a valuer,but as their sub-ordinate. Then I stoppedworking to them. It cost me six monthsof time. I realized, instead of working withsuch a bank, If I had worked as anassociate of a senior, I would have learneda lot.

Check the eligibility criteria, get theprescribed format and submit application intriplicate to the nearest branch manager.The branch shall keep one copy with themand forward the 2 copies to the zonal /regional / circle office. The zonal officewill forward one copy to the HO.HERE THE DRAMA STARTS………...

If some one says about a politician, wewill ask whether he is a good or badpolitician. If we need some medical treat-

ment, we enquire about a good doctor. Asthere are good people and bad people,there are also some responsible bankersand ir-responsible bankers. Assuming allbankers are good or believing their sugarcoated words as true is the first mistakeof a novice valuer.

“Ok, we will forward your application”.

“I am busy now. Please come after2 weeks”.

“I have already forwarded your appli-cation, but there is no reply from our zonaloffice. But it takes 3 to 4 months tocomplete the process”.

These are some of the lies the bankerstell to novice valuers when they try forempanelment.

Some bankers also say true words like—

“Our branch is having sufficient valu-ers, hence I can’t forward your applica-tion”.

“I do not know about you (you are astranger to me), how can I forward yourapplication?” (we wonder, this branchmanager may sanction loans only to knownpeople like his brothers, brothers-in-lawetc.)

The novice valuers will be highly dis-appointed when facing such rejections.What to do?Approach 5 to 10 branches until you finda good manager who is ready to forwardyour application. You will understand thembetter when you meet more branch man-agers. You will be able to judge whether


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

that particular manager will forward yourapplication. Meet him again after a weekand ask him whether he forwarded yourapplication. If forwarded, ask the letternumber. If he gives, then only it is truethat he forwarded the application.

Always record the date of submissionof application, name and designation of thebanker etc so that you can mention thosedetails when speaking to DGM / GM.

FOLLOW-UP TILL THE END

Then go to the zonal office and askabout your application. If the manager /senior manager is not responding properly,then meet the DGM / GM.

Your application shall reach the HOsince the empanelment will be finalizedonly at HO. In most of the cases, theapplication will be forwarded to HO, whenwe meet the DGM / GM only. Most ofthe managers / senior managers at branch/ZO will play a game with us.

OBJECTION HANDLING

We have to answer or reply properlyto the bankers. Some examples are asbelow.

Banker : This is April. We will take appli-cations only in the month of October.Me : Sir, Is there any specific circulardirecting you to accept applications onlyin the month of October ? Please givea copy of the circular so that I can discusswith your GM when I meet him in the nextweek.

Banker : Have you been empaneled with

any other banks? we will take applicationsonly from those empaneled with 2 or 3banks.

Me : (similar reply)

Banker : We have received many appli-cations. Hence we can’t forward yourapplication.

Me : Receiving so many applications isgood for the bank. Bank has the choiceto choose the best valuers. But theselection of valuers will be done at HO.So please forward my application, if I havefulfilled the prescribed criteria. If your bankneeds 10 valuers and HO received 100applications, then the best 10 valuers outof the 100 applications will be selected.That is a natural justice.

Your bank is opening new branches atlocations with so many existing banks.New hospitals are being opened in-spiteof so many existing hospitals. Hencecompetition is natural in any profession.Also competition is good as it helps inimproving service or competency.

Today I have submitted application forempanelment. Once you also submittedan application to the bank and you weregiven an opportunity to write the competi-tive test. You were selected by bankbased on your merit. If the bank says,we have received so many applicationsand refuses you to attend the exam, whatcould have happened to you ?

I am not asking for empanelment, butforward my application so that I can be inthe race.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

With this explanation, they usuallyforward the application. If still they do notforward it, then (i.) Ask them to give youin writing with the reasons for not forward-ing the application. (ii.) meet the DGM /GM and complain the injustice done toyou. (iii.) Tell him, if they don’t do justice,I will go to court / Ombudsman / complainto IOV etc etc.

If still don’t get, nothing to worry.Leave that bank, there are so many otherbanks.

Perseverance is the key to success.But do not wait years for empanelment.Apply, do the follow-up and meet the DGM/GM. Then CLOSE THE SALE with yesor no. Then approach another bank.

PREPARATION

Always make a note of what thebanker said and what you replied. Thenthink, is there any better answer? Writeit on the paper, study, improve.

PRESENTATION SKILLS

We have to practice and improve ourpresentation / communication skills. Mostot the novice valuers and Engineers arepoor in this area. We have to improve alot in this area.

VALUATION REPORT IS AN AMBAS-SADOR OF THE VALUER.

—Sri. B. Kanaga Sabapathy, F.I.V.

HOW TO WIN BANKERS AND INFLU-ENCE THEM TO GET EMPANELMENT?

* Professionally dressed

Your dress should be superior to theofficial you are going to meet.

*Good Vocabulary

Words are powerful, says RobertKiyosaki. Use right terminology, says Sri.B. kanaga sabapathy. Know the differ-ence between estimate and valuation,collateral security and prime security, saysShri. S. Deshpande.

*Confidence

Your confidence level increases inproportion to your education, training andexperience.

*Good body Language

Practice it, it will improve.

* Sincerity and honesty

These are the pre-requisites for avaluer.

GESTATION PERIOD and FINANCIALSTRUGGLES

It takes 2 to 3 years to learn theintricacies of the profession and to getrecognition as a valuer. Novice valuersmay have to face financial struggles duringthis period, hence they should plan theirfinances well and adopt proper budgeting.Your real career growth starts after sin-cere efforts of 5 years.

HOW TO BECOME A SUCCESSFULVALUER?

Since it is not fair to copy all the points,I am reproducing here some of the pointsgiven by Shri. B. Kanaga Sabapathy in


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Practical valuation, vol – I.* A valuer must be “a jack of all trades

and should be a master of many”.* Develop genuine clients and maintain

cordial relations.* Never issue valuation reports without

inspecting the property.* Do not yield to any undue pressures

from anybody.* Maintain professional ethics.

YOUR SUCCESS IN VALUATION DE-PENDS UPON YOUR ABILITY TOLEARN FROM SENIORS

—V. Srinivasababu, F.I.V.

ACKNOWLEDGEMENTSMy Sincere and heart-felt thanks to

i. Shri. S. Deshpande, Former Chairman,IOV, Hyderabad – MY MENTOR.

ii. Shri. N.R. Rao, Chairman, IOV,Hyderabad – MY FORCE.

iii. Shri. G.V. Apparao Sharma, Vice-Chair-man, IOV, Hyderabad – MY TRAINER.

FEEDBACKPlease send your comments to

[email protected] and copy [email protected]

I WISH A SUCCESSFUL CAREERTO ALL NOVICE VALUERS.

ELEMENTS OF VALUATION OF IMMOVABLE PROPERTIESA book by the Author : SHRI R.K. GANDHI (Mumbai)A book by the Author : SHRI R.K. GANDHI (Mumbai)A book by the Author : SHRI R.K. GANDHI (Mumbai)A book by the Author : SHRI R.K. GANDHI (Mumbai)A book by the Author : SHRI R.K. GANDHI (Mumbai)

Pages : 856 Price : INR 1600/- By Post : INR 1700/-

The book contains :

Everything on valuation that a valuer of Real Estate wants to know.

260 citations of H.C. & S.C. with extracts from court judgements.

280 solved examples in 36 chapters. 50 pages dedicated to Land Valuation.

Exclusive chapter on valuation of Leasehold Properties with 20 solved examples.

New theories in valuation with supporting judgements.

Author has 52 years of field experience as a valuer and 20Author has 52 years of field experience as a valuer and 20Author has 52 years of field experience as a valuer and 20Author has 52 years of field experience as a valuer and 20Author has 52 years of field experience as a valuer and 20years experience as a teacher of valuation.years experience as a teacher of valuation.years experience as a teacher of valuation.years experience as a teacher of valuation.years experience as a teacher of valuation.

Book is available at :

Smt. S.R. Gandhi, C/o K.C. Gandhi & Co., 108, Shyam Kamal-A Bldg., Tejpal Road,Opp. Rly. Station, Vileparle (East), Mumbai - 400 057.

Send Demand Draft in the name of S.R. Gandhi for an amount of Rs. 1700/- (incl. postage)

Call : +91-22-26142793 Cell : +91-9821426811 Email : [email protected]

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

An assessee had sold a property meas-uring 4320 sq.ft. (1 ground and 1920 sq.ft.)on 11.5.2005 by a sale deed No.461 of2005. Consideration shown in the saledeed was Rs. 30 lakhs. However, stampduty was paid by the assessee on guide-line value fixed at Rs. 58,37,000/- by theSub-Registrar. Assessee had taken thesale consideration at Rs. 30 lakhs whileworking out the capital gains. AssessingOfficer recomputed the capital gains byconsidering the sale consideration as Rs.58,37,000/- as per guideline value. Longterm capital gain resulting, therefrom, cameto Rs. 33,49,486/- against Rs. 4,50,129/-shown by the assessee

Assessee moved in appeal beforeCIT(Appeals). CIT(Appeals) noted thatAssessing Officer had applied Section50C of the Act, while adopting the valuefixed by the Sub-Registry for working outthe capital gains. During the appellateproceedings, it seems, assessee requestedthat valuation should be referred to Depart-ment Valuation Officer. Ld. CIT (Appeals)required the Assessing Officer to do so.The DVO valued the property at Rs.57,24,500/-. Assessee was given a chanceby the DVO for presenting his objections

COULD ASPECTS LIKE VASTHU DEFICIENCIES CANBE CONSIDERED WHEN MAKING A VALUATION

—C.H. Gopinatha RaoFormer National President

B.Sc., B.E., M.Sc., FIE, FIVChennai (Tamil Nadu)

(F. 808)

✍

on the issue. Assessee had mentionedbefore the DVO that the property washaving disadvantages due to Vasthu prob-lems. However, this claim was not ac-cepted by the DVO. Ld. CIT(Appeals)accepted the DVO’s report and directedthe Assessing Officer to adopt Rs.57,24,500/- as “full value of consideration”,against Rs. 58,37,000/- earlier consideredby him.

In the case of The assessevs TheIncome Tax Officer vs Business WardIX(1), Chennai - 600 034 ,it was arguedon behalf of the assesse that the DVO didnot consider the problems arising out ofthe peculiar locational disadvantages suf-fered of the property.

The land was located exactly oppositeto a street named Venkatesa Naikan Lane.The site was longer in north-western side.It was not advisable in VasthuSasthra tolocate a building at “T” junction. When abuilding was constructed on a site facingthe street, it would have street focusknown in Tamil as “Therukuthu”. Such aproperty brought bad luck to the owner.since last 80 years, there was no con-struction whatsoever except for a godownwith ACC roofing. Though it was situated


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

in a busy area, Vasthu deficiencies madethe property not an attractive one forprospective buyers. Only atheists andpeople having no belief in God purchasedsimilar property. To value such propertybased on comparable sale instance, asdone by the DVO, was incorrect. In sup-port of the additional ground filed,theassesee submitted that the propertywas sold on 11.5.2005 and comparablesale instance considered by the DVO wasdated 23.2.2005. DVO had considered a2% increase for every month upto31.3.2006, whereas the property was ac-tually sold on 11.5.2005. Thus, accordingto him, what could best be considered wasan increase for three months and nothingmore. Further, the building was valued atRs. 1,83,000/-, though it was 80 years old.According to him, ACC roofing would nothave any value, if sold, since asbestossheet was carcinogenic and not used atpresent by anybody. and the valuation ofDVO, adopted by the Assessing Officer,without considering the above crucial as-pects, was unfair and unjustified.

Per contra, department submitted thatthe method prescribed under law has beenscrupulously followed by the lower authori-ties. There was no way any of the lowerauthorities could consider aspects likeVasthu deficiencies when making a valu-ation, since these were not based on anyproven scientific data. These could at bestbe considered as apprehensions. A Valu-ation Officer making a valuation, as perprescribed methods, could not considersuch extraneous matters. At the best,

what could be considered was the errorin the period for monthly enhancement.

THE INCOME TAX APPELLATE TRI-BUNAL observed

“ We have perused the orders andheard the rival submissions. Section 50Cof the Act reads as under:-

“Special provision for full value of con-sideration in certain cases. 50C. (1) Wherethe consideration received or accruing asa result of the transfer by an assessee ofa capital asset, being land or building orboth, is less than the value adopted orassessed [or assessable] by any authorityof a State Government (hereafter in thissection referred to as the “stamp valuationauthority”) for the purpose of payment ofstamp duty in respect of such transfer, thevalue so adopted or assessed [or assess-able] shall, for the purposes of section 48,be deemed to be the full value of theconsideration received or accruing as aresult of such transfer. (2) Without preju-dice to the provisions of sub-section (1),where—(a) the assessee claims before any As-

sessing Officer that the value adoptedor assessed [or assessable] by thestamp valuation authority under sub-section (1) exceeds the fair marketvalue of the property as on the dateof transfer;

(b) the value so adopted or assessed [orassessable] by the stamp valuationauthority under sub-section (1) has notbeen disputed in any appeal or revi-sion or no reference has been made


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

before any other authority, court or theHigh Court, the Assessing Officer mayrefer the valuation of the capital assetto a Valuation Officer and where anysuch reference is made, the provi-sions of sub-sections (2), (3), (4), (5)and (6) of section 16A, clause (i) ofsub-section (1) and sub-sections (6)and (7) of section 23A, sub-section (5)of section 24, section 34AA, section35 and section 37 of the Wealth-taxAct, 1957 (27 of 1957), shall, withnecessary modifications, apply in re-lation to such reference as they applyin relation to a reference made by theAssessing Officer under sub-section(1) of section 16A of that Act. [Expla-nation 1].—For the purposes of thissection, “Valuation Officer” shall havethe same meaning as in clause (r) ofsection 2 of the Wealth-tax Act, 1957(27 of 1957).

[Explanation 2.—For the purposes ofthis section, the expression “assessable”means the price which the stamp valuationauthority would have, notwithstanding any-thing to the contrary contained in any otherlaw for the time being in force, adopted orassessed, if it were referred to suchauthority for the purposes of the paymentof stamp duty.] (3) Subject to the provi-sions contained in sub-section (2), wherethe value ascertained under sub-section(2) exceeds the value adopted or as-sessed [or assessable] by the stampvaluation authority referred to in sub-sec-tion (1), the value so adopted or assessed[or assessable] by such authority shall be

taken as the full value of the considerationreceived or accruing as a result of thetransfer.]”.

Here, there is no dispute that valueshown in the sale deed was only Rs. 30lakhs. There is also no dispute that theguideline value adopted by the Sub-Reg-istrar was Rs. 58,37,000/-. Though theassessee had not requested the Assess-ing Officer to refer the valuation to aValuation Officer during the course ofassessment proceedings, in his appealbefore CIT(Appeals), such a request wasindeed made. This was also accepted andthe CIT(Appeals), through the AssessingOfficer, had obtained the valuation done bythe DVO. The DVO had given sufficientopportunity to the assessee for placing hisobjections. The DVO had taken compara-ble sale instances from the Sub-Registry,Sowcarpet, Chennai-1. The comparablesale instances considered was that as perdocument No.144/2005 dated 23.2.2005.The land extent sold in the comparableinstance was 2161 sq.ft. The said landwas situated in same street, namely,PedariarKoil Street. The rate at which thecomparable sale instance was sold cameto Rs. 1,018.05 per square foot. SinceAssessing Officer had requested theValuation Officer to give the value as on31.3.2006, the DVO had increased theabove value by 2% per month for theperiod starting from 23.2.2005 to 31.3.2006,viz. for 13 months at the rate of 20.36 permonth. Thus, comparable value consid-ered for valuation of the property sold bythe assessee was Rs. 1282.75 per sq.ft.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

As per the assessee, it had brought to thenotice of the DVO various Vasthu prob-lems and difficulty in getting a buyer forthe property. When the valuation is at-tempted by the DVO, based on empiricaldata, in our opinion, there is no scope forany allowance based on Vasthu concepts.Such concepts, though it might be followedby a large number of people, cannot beequated with a universal rule accepted bythe world at large. They could at the bestbe an abstract science which derived itsstrength from acceptance of the peoplewho believed in them. They cannot beconverted into rules of law for depressingthe guideline value fixed by the authorities.Assessee could not produce any evidenceto show that the evils associated withproperty due to the Vasthu disabilities likebad health, fire, bad luck, etc. were suf-fered by him at any point of time. It couldat the best be an apprehension. The DVOhad considered an appropriate sale in-stance comparable to that of the asses-see, which took place just three monthsbefore the date of the impugned transac-tion. The only deficiency in such valuationwas that the DVO had increased thecomparable value by 2% per month con-sidering 13 months, whereas, the propertywas sold after three months from the dateof comparable sale. In the comparableinstance, the property was sold on 23-02-2005, whereas, the assessee had sold hisproperty only on 11.5.2005. At the rate of2%, the increase in sale rate, could havebeen Rs. 50.91 only and nothing more.Therefore, full value consideration for the

land sold has to be taken at Rs. 1018.05aggregated with ‘ 50.91 totalling to Rs.1068.96. As for the claim of the assesseethat value of the building considered by theDVO at Rs. 1,83,000/- was excessive, wefind that assessee had expressed his no-objection to such value before the DVO.Having already agreed to, assessee at thisstage cannot agitate the issue. Weare, therefore, of the opinion that the fullvalue consideration for the purpose ofcomputing the capital gains has to beadopted at Rs. 1068.96 per sq. ft. for theland and Rs. 1,83,000/- for the building.”

The tribunal ruled that the assessingofficer should consider total value thathas to be considered is Rs. 48,00,907/-and to recompute the capital gains basedon this figure.

ConclusionVastu will not change the destiny of the

occupantThere are three lucks for any person

namely star luck, earth luck and humanluck

The prospects of an individual dependslargely upon the good or bad deeds doneby him in this life and also previous births.This aspect is known as star luck

The human luck is the way how hebehaves in this life, If he has virtues andfollow ethics, this will mitigate his sufferingsto some extent just like a convict getsremission and being released from theprison before he completes his term ofpunishment


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Compliance of vastu is known as earthluck which will enhance his prospects

If his karma good and can only mitigatehis sufferings to some extent if his staris bad

The assesse himself admits that’ onlyatheists and people having no belief in Godpurchased similar property’

The value of a property depends mainlyon the supply and demand and otheraspects are only secondary

The clarification needed is what is thebasis on which the DVO had increased theabove value by 2% per month. He couldhave substantiated with any sale instancein the locality during the period.

To,The Authors of ArticlesThe Institution expects senior and highly qualified members to devote serious thoughtto produce useful & topical literature from time to time. All the matter for publicationshould be on Valuation.General Considerations :1. All articles must be received in a soft copy so that the possibility of any error

in publication is not allowed to happen.2. The address in full and membership No. may be shown for record in the office.3. All articles must be signed by the author.4. It should be mentioned clearly that the written item is an article, a note, or news

or information, etc.5. The point the author wants to highlight be mentioned as introduction.6. If any abbreviation is used, immediately to that its expansion be written in brackets.7. If any other author’s facts or work is stated or used, the source of the same

be mentioned.!8. All written matter should be useful to all our readers.9. The Council in its meeting held on 10/08/2013 decided that w.e.f. January, 2014

the photographs of the authors of articles in black and white be also printed.The authors of articles are requested to kindly send their passport size photographsso that the same are printed alongwith their articles.

--EDITORIAL BOARD

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SUMMARY-

The valuation of a property is required to know market value and construction costat present day rate after allowing a suitable depreciation. Valuation is necessary forfollowing purposes:

i) Buying or selling of property

ii) Taxation

iii) Rent determination

iv) Security of loan or mortgage

v) Compulsory acquisition

v) Insurance, Betterment charges & speculation etc.

Various types of values of a property for which an engineer must be trained are classifiedas: Market Value, Scrap Value, Salvage Value, Liquidation Value, Insurable Value andBook Value. A Valuer must have deep knowledge of subject with respect to:

* Analytical and Computer Skills.* Tolerances for wastage during construction.* Present rates of material used.* Construction bye laws of area under consideration.* Leadership and soft skills.* Latest materials & their cost and construction techniques.

In order that engineering students start practicing as valuer after graduation, theauthors have planned to assign Valuation Projects to comply the requirement of MajorProject Work prescribed for degree course. Herein a project report prepared by thestudents under the guidance of Registered Valuer (author) is presented.

INTRODUCTION-The major projects assigned to a group of final semester students to comply the

VALUATION TRAINING PROGRAM THROUGH MAJORPROJECTS ASSIGNMENT IN ENGINEERING COURSE

—Ms. Neha Patel —Dr. S.K. MahajanLecture, Civil Engg. Dept. GDRCET Prof. & Head Civil Engg.Bhilai (C.G.) Dept. S.E.C. Durg (C.G.)

(F. 1936 (L.M.))

✍ ✍


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

requirement of prescribed syllabus of B.E. degree is as under:

The fair market value of Sun Engineering College campus is required for arrangingbank finance to expand infrastructure and meet future amenities like auditorium, hostelbuilding etc. The campus layout plan is to be prepared showing existing constructiondetails and future expansion of buildings. The field survey of campus would have takenat least 15 days with conventional instruments like theodolite, Dumpy level, plane tableetc. As students were not having that much time to devote in field surveys, they wereinitially trained to work with laser meter and G_Mat software to prepare the layout planof existing infrastructure.

Plane Table Survey with G_Mat Software–

Distances are measured by tape/laser meter and radial rays to different offsetsare drawn. From a single known point, by radiation method, only a single horizontaldistance and its azimuth, are determined Fig.(1).

Fig.(1) – Plane Table survey for Campus Layout Plan

G_Mat software is used to compute distance of radial lines to plot the traverseand details in the field. Thus Plane Table Survey has become simple with use of G_Mat.It is explained with following field illustration:

Fig.(2) – Illustrative working with G_Mat


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The instrument is set at a point ‘O’ and radial lines to all prominent points are drawn.With one setting only the layout plan can be completed as follows:

i) Distance OA = 10 m

ii) A suitable point O for taking angle observations for each obligatory point onthe traverse A,B,C,D,E,F has been corrected are: AOB = 500, ÐBOC= 180, ÐCOD=750, ÐDOE= 260, ÐEOF= 780, ÐFOG=310 and ÐGOA=820 Fig.(2) shown above Radialrays to all points are drawn and angles observed at O are ÐAOB, ÐBOC, ÐDOE,ÐEOF, ÐFOG and ÐAOG, measured. The angles have been corrected for sum ofcentral angle condition = 3600. The error is equally distributed in each of the observedangle. The table below shows the corrected angles..Applying G_Mat software distanceOB is found from OA = 10 and included angle = 500 in the D AOB. Similarly othersides OC, OD, OE, OF and OG have been computed

As time available for the completion of the major project was too short and withinlimited time detailed survey plan could not be made by conventional surveyingtechniques Plane table survey with G_Mat software was adopted for field work.

(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

G_Mat screen to determine required distances for sample calculation is shown below-

The table below gives sample calculation if one distance us = 39 m and anglebetween radial line and known distance is 170 then distance of radial line = 118 m.Also one of the sides of the garden is 45 m making an angle opposite to it is 350.G_Mat gives the distance as 59.18 m. Thus complete layout of campus could be madewith only 4 different setting of plane table. Plane table plotting work i.e. layout on 23acres of campus site is shown in Fig.(3) below.

Observations Chord Opp. Angle Sides of “

Chord Lengths b è R a

“ AOB 39 17 6.53 118

“ garden 45 35 14.53 59.18

(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Fig.(3) –Campus Plan to observe Data on site

S.E.C. Campus Area Details obtained from plane table sheet is as under:

1. Administrative Block A Area : 1600 sq.m.

2. Engineering Block B Area : 1600 sq.m.

3. Workshop Building Area : 810 sq.m.

4. Canteen Building Area : 350 sq.m.

5. Sun Public School Building Area : 2520 sq.m.

6. Maintenance Office Area : 190 sq.m.

7. Central Garden with Landscaping Area : 2160 sq.m.

8. Play Field Area : 5660 sq.m.

9. Open Area Area : 79623.44 sq.m.

10. Parking Area : 196.56 sq.m.

GRAND TOTAL Area : 920000 sq.m.

BUILDINGS SPECIFICATION DETAILES -

1 Administrative Block AGROUND FLOOR :Foundation : Individual Column footing with PCC & Sand filling etcRoof : RCC Flat roof


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Floor Finish :Ceramic tiled flooring with 10 cm side dado

Joineries : Doors Country wood Frames and Shutters with Novapa

& wooden finish windows etc are of U-PVC glazed panel

Electrification :Concealed type wring work with PVC conduit–Switch &

plug point, Quality provision

Sanitary Provision : Indian & European type water Closet without &with of

Superior Quality.

Water Supply

Provision : PVC pipes & pipe special are of Nickel Coated

Brassware of Superior Quality

Finishes : In & out side Portion Snowcem wash

FIRST FLOOR :

Super structure : Brick filler walls in CM

Roof : RCC Flat roof as per Provision Contained in the IS 476/78 –Flat Type

Joineries : Doors :Country wood Frames and shutters with Novapa

& wooden finish windows etc are of U-PVC glazed panel

Electrification :Concealed type wring work with PVC conduit–Switch &

plug point,Quality provision

Sanitary Provision : Indian & European type water Closet without &with of

Superior Quality.

Water Supply

Provision : PVC pipes & pipe special are of Nickel Coated Brassware of Superior Quality


2 Engineering Block B

This building has 3 floors and all floors have similar construction specifications withonly difference in floor finish stated below:

Floor Finish : IPS flooring with 10 cm side dado


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

3. Workshop & Canteen Building -

Foundation : Individual Column footing with PCC & Sand filling etc

Roof : Iron sheet roof

Floor Finish : IPS flooring with 10 cm side do doing

Joineries : Main Doors - Rolling Shutter& wooden windows are of steel section with glass panels.

Electrification : Concealed type wring work with PVC conduit

–Switch & plug Point, Quality provision

SanitaryProvision : Indian & European type water Closet without &with

of Superior Quality.

Water Supply

Provision : PVC pipes & pipe special are of Nickel Coated Brassware of Superior Quality


4, Sun Public School Building -

This building has only ground floor and construction specifications is similar toEngineering Block B.

BASIC PLINTH AREA RATES

The materials consumption (per sq.m. plinth area: cement, steel, sand, metal etc.)of a buildings in case of a R.C.C framed structure with ground plus first floor is givenin Table (1).

OBITUARY

The Institution of Valuers express their profound sorrow on the saddemise of Shri R.K. Balaraman, F-17510, resident of No. 3/33, 4th Street, Jeevan nagar,Adambakkam, Chennai - 600 088 (Tamil Nadu), who left for his heavenly abode. He wasan eminent valuer and Fellow life member of this Institution.

MAY HIS SOUL REST IN PEACE.

(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Table (1)- Materials consumption per sq.m.

On the basis of material requirement for R.C.C framed structure with ground plusfirst floor is worked in Table No.(2) below:

Campus Area Plinth Area Rates

1. Administrative Block A Rs. : 7500 per sq.m.

2. Engineering Block B Rs. : 7000 per sq.m.

3. Workshop Building (Industrial Shed) Rs. : 5500 per sq.m.

4. Canteen Building Rs. : 5500 per sq.m.

5. Sun Public School Building (R.C.C. frame) Rs. : 7000 per sq.m.

6. Maintenance Office Rs. : 4500 per sq.m.

7. Central Garden with Landscaping Rs. : 120 per sq.m.

8. Play Field Rs. : 150 per sq.m.

9. Open Area Development Rs. : 75 per sq.m.

10. Parking Rs. : 200 per sq.m.

(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

PERIOD OF CONSTRUCTION:-

It is found that the buildings construction of Sun Engineering Campus are now 7years old hence depreciation on construction cost will be allowed for 7 years.

Greenness Aspect In Market Valuation Of A Building -

The United States Green Building Council (USGBC) was founded in 1993 for themain purpose of driving the change of sustainability in the construction of buildings.Since then greenness aspect has become important consideration for any buildingvaluation.

Greenness measuring Scale-

Greenness measuring scale with 100 credit points is shown in Appendix –I, A surveyPro-forma to be completed at site for greenness score points

(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

APPEDIX-I : Building Survey pro-forma for greenness assessment


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

During site inspection the above survey questionnaire is completed. On basis ofabove measuring scale the buildings are classified as (i) 0 to 5 No green (ii) 6 to25 points – weak green, (iii) 26 to 45 points -fairly green, (iv) 46 to 70 points -goodgreen and (v) above 71 points- excellent green

As per our site inspection of Sun Engineering Campus The points scored by

Administrative Block A , Engineering Block B, Workshop Building (Industrial Shed),Canteen Building, and Sun Public School Building (R.C.C. frame) are only 29

Modified Plinth Area Rates with respect to greenness scale-

Determination of Greenness Impact Factor (G.I.F.)-


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The impact factor to be applied with no green building plinth area rate for greennessaspect is determined by formula given below:

For example – If it is weak green building as per LEED rating, then

= 1.070

The greenness multiplying Impact factor from above formula for all types of classifiedgreen buildings are given in Table (5).

No. Type of Greenness G.I.F. multiplierGreenness rating points for PLA

1 No green <6 1

2 Week green >6 and <26 1.07

3 Fair green >25 and <46 1.20

4 Good green >45 and <71 1.32

5 Excellent green >71 1.48

Site Survey Questionnaire-

The survey team collects data in following format to prepare an Excel Programsheet to analyze market value of the building. The pro-forma given in Appendix - Iis completed at the time of site inspection. Suitable consideration is given to existingdetails to allocate greenness points in each sub-heads. Old sites and buildings on vergeof demolition fetch good scores for there is good scope of reuse of materials. Thosesites show good water efficiency, amenities and Environmental Atmosphere. Thus oldand ruined buildings sites are better resource for new green building construction.

Final Market Value Assessment with greenness factor-

The survey sheet given in Appendix-1, is completed with greenness view point isus. The Campus of Sun Engineering College, Durg is 7 years old. Total greennessPoints scored = 29 through the survey report. On greenness measuring scale thebuilding is classified as fairly green structure. Valuation given by no green equation

Pln = PLA*((1.02)n1 -0.011 *n1)

Where n1 = 7 years and PLA = 7500

Therefore Pln = Rs. 8615 per m2 for Administrative Block A


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Pln = Rs. 8040 per m2 for Education Block B

Pln = Rs. 6320 per m2 for workshop, Canteen and Sun Public School

Buildings

Applying the modified plinth area rates the final market value of campus is determinedbelow:

Total Market Value is say Rs. = 929.60 lacs

CONCLUSION – It is a useful experiment to allocate engineering students valuationbased major projects in their course of degree program. They will get good exposureof valuation practices and after completion of degree they can join chartered engineerfirms immediately without remaining unemployed for want of initial knowledge andexperience.

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SETTLEMENT OF CASES—APPLICATION FOR SETTLEMENT—INTEREST UNDERSECTIONS 234B AND 234C NOT CHARGEABLE BEYOND STAGE OF SECTION245D(1)—INCOME-TAX ACT, 1961, SS. 234B, 234C, 245D.WRIT—HIGH COURT—DELAY IN FILING WRIT PETITION—REASONABLE CAUSEFOR DELAY—PETITION CANNOT BE REJECTED—CONSTITUTION OF INDIA, ART226.

[IN THE GUJARAT HIGH COURT]C.M. SMITH AND SONS

v.ASSISTANT COMMISSIONER OF INCOME-TAX

AKIL KURESHI and MS. SONIA GOKANI JJ.February 3, 2014.

JUDGEMENTS

JUDGMENT1

The judgment of the court was deliveredby

AKIL KURESHI J.—These petitions ariseout of common background. They have,therefore, been heard together for finaldisposal and would be disposed of by thiscommon order.

We may notice the facts arising inSpecial Civil Application No. 16249 of2013. The petitioner-assessee, for the as-sessment yeas 1988-89 to 1995-96, ap-plied for settlement of the assessment tothe Settlement Commission (“the Commis-sion” for short) in terms of the provisionscontained in the Income-tax Act, 1961(“the Act” for short). Such application wasentertained and the Commission passedorder dated October 11, 2002, assessing

the tax liability of the petitioner. In suchorder, the Commission gave the followingdirections for charging interest:

“(C) Interest under sections 215/217, 234B and section 234C shall becharged according to law except inrespect of the assessment year 1993-94 in the case of the firm for thereasons mentioned below :

The assessment under section143(3) for the assessment year 1993-94 in the case of M/s. Smith and Sonswas completed by the AssessingOfficer. After the submission of thesettlement application but before thesame was admitted. In view of theSpecial Bench decision in the case ofDamani Brothers, In re [1999] 238 ITR(AT) 36 (ITSC) [SB], the assessmentcompleted would have to be consid-ered as nonest. In the circumstances,1. Oral Judgment


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

the interest chargeable in respect ofthe assessment year 1993-94 in thecase of M/s. T.M. Smith and Sonswould have to be restricted up to thedate of the order under section 143(1)(a).”

It is not in dispute that the petitionerpaid up the remaining tax as per the orderof the Settlement Commission within thetime permitted.

Based on such order of the Commis-sion, the Assessing Officer passed aconsequential order dated February 4,2003. In the said order, he calculated theinterest under section 234B and section234C of the Act up to the stage of theSettlement Commission passing the finalorder of settlement as envisaged undersection 245D(4) of the Act. He observedthat such interest would be chargeable asper the directions contained in paragraph26(c) of the Commission’s order which hasbeen produced hereinabove. Contendingthat the interest under section 234B andsection 234C could not have been chargedbeyond the stage of section 245D(1) of theAct the petitioner moved an application forrectification before the Commission onJune 19, 2003. In such an application, thepetitioner prayed, inter alia, that :

“(a) The hon’ble ITSC may bepleased to hold that no interest undersection 234B is chargeable in respectof the assessment year 1988-89.

(b) The interest under section 234Bbe ordered to be calculated only up tothe date of the order of the hon’ble

ITSC under section 245D(1).”

This application for rectification re-mained pending before the Commission fornumber of years. In the meantime, thepetitioner also filed written statement. Insuch statement, the petitioner relied on thedecision of the Supreme Court in case ofBrij Lal v. CIT [2010] 328 ITR 477 (SC)to contend that interest beyond the stageof section 245D(1) was not permissible.

The Settlement Commission passed itsimpugned order dated September 17, 2013,in which in addition to holding that theCommission has no power to rectify itsown order, also observed that there wasno mistake apparent on the record in theorder passed by the Commission onOctober 11, 2002. It was observed that insuch order, necessary directions weregiven for charging interest under differentsections as applicable in accordance withthe provisions of the Act. The contentionof the petitioner that newly introduced sub-section (68) of section 245D permitting theCommission to rectify its own order in thepresent case was also rejected on theground that such provision was prospec-tive and that in any case in view of thetime limitation provided in the said provi-sions, the proceedings would be timebarred. This order of the Commission waschallenged by the petitioner in the presentwrit petition.

During the pendency of the petition, thepetitioner also amended the petition toinclude the challenge to the order datedFebruary 4, 2003, passed by the Assess-


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

ing Officer. The respondents have filedreply including reply to the amended pe-tition and opposed the petition.

Having heard the learned counsel forthe parties and having perused the docu-ments on record, the following scenarioemerges:

(a) The petitioner contests the interestcharged by the Revenue in terms of theorder passed by the Settlement Commis-sion beyond the stage of section 245D(1)of the Act.

(b) Such challenge the petitioner keptalive all through out right from the stage,the Settlement Commission passed itsorder under section 245D(4).

(c) The Assessing Officer levied suchinterest on the premise that the SettlementCommission’s order so permits.

(d) When the petitioner filed the rec-tification application before the Commis-sion, the Commission informed him thatthe only order passed by the Commissionwas to charge interest as per law. In otherwords, there was no direction specificallyproviding for interest from the petitionerbeyond the stage of section 245D(1).

(e) Such application for rectificationremained pending before the Commissionall along for a number of years. There isnothing on record to suggest that thepetitioner was responsible for such delaynor any ground has been raised by theRevenue before us.

(f) In the meantime, the Supreme Courtclarified the legal position and held in its

judgement in case of Brij Lal (supra) thatinterest beyond the stage of section 245D(1)under sections 234B and 234C cannot becharged. In the same judgment, the Su-preme Court also laid down that theSettlement Commission has no power ofrectification.

Sum total of the above sequence ofevents is that the petitioner had all alongkept its application to the interest beingcharged under section 245D(1) alive. Itmay be that under mistaken bona fidebelief that the Settlement Commission haspower of rectification, he filed such appli-cation before the Commission and suchapplication came to be dismissed. Wehave noticed that application remainedpending before the Commission for longnumber of years. Had such an applicationbeen terminated shortly after being filed,either on the merits or on the ground thatthe Commissioner has no power of rec-tification, the petitioner would have takenhis steps as may be available in law. Now,that the Commission has rejected theapplication an both counts, namely, thatthere was no error in the original order andalso that it does not have the power ofrectification, in our opinion, the petitionercannot be precluded from questioning theAssessing Officer’s interpretation and im-plementation of the Commission’s order. Itis not in dispute that if law is applied aslaid down by the Supreme Court in thecase of Brij Lal (supra), such consequen-tial direction of the Assessing Officer wouldnot be valid. Counsel for the Revenuehowever, vehemently contended that the


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

challenge of the petitioner to the AssessingOfficer’s order is highly belated. We must,however, see the entire sequence of eventsin the light of the developments notedabove. The petitioner had approached theSettlement Commission raising the griev-ance that the Commission’s order permit-ting the Assessing Officer to charge inter-est gave rise to a dispute and that suchorder, therefore, should be clarified orrectified. Even while holding that the Com-mission has no power of rectification, it didin the same order clarify that its previousorder was only for charging interest as perthe statute. In other words, the Commis-sion never required the Assessing Officerto charge interest de hors the statutoryscheme. It was, therefore, that the peti-tioner had no choice but to question thevery base order of the Assessing Officermisapplying the directions of the Settle-ment Commission. When such challengecomes before us, we must apply the lawas presently prevailing.

Had the petitioner abandoned his causeand accepted the directions of the Settle-

ment Commission, as understood andimplemented by the Assessing Officer ofcharging interest even beyond the stageof section 245D(1) and, thereafter, manyyears later relied on the decision of theSupreme Court in the case of Brij Lal(supra), we would have certainly consid-ered the Revenue’s objection to such achallenge on the ground that only on delayand latches such challenge should beterminated. In the present case, the peti-tioner all along kept his challenge alive. Hecannot be penalised for his applicationbefore the Settlement Commission remain-ing pending nearly for a decade.

In the result three separate orderspassed by the Assessing Officer datedFebruary 4, 2003, giving effect to theorders passed by the Settlement Commis-sion are quashed to the extent such orderprovides for charging interest from therespective petitioners under section 234Band section 234C of the Act beyond thestage of section 245D(1) thereof. To thisextent, the petitions are allowed and dis-posed of. IV

OBITUARY

The Institution of Valuers express their profound sorrow on the saddemise of Shri V. Muthian, F-9833, resident of No. 12/30, Pachayappar Salai, MugappairEast, Chennai - 600 037 (Tamil Nadu), who left for his heavenly abode. He was aneminent valuer and Fellow life member of this Institution.



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

INCOME FROM UNDISCLOSED SOURCES—DELETION OF ADDITION AFTER CONSIDERINGFACTS—DELETION JUSTIFIED—INCOME-TAX ACT, 1961.

[IN THE GUJARAT HIGH COURT]COMMISSIONER OF INCOME-TAX

v.JAYENDRA N. SHAH

AKIL KURESHI and MS. SONIA GOKANI JJ.January 17, 2014.

JUDGMENT1

The judgment of the court was deliveredby

Akil Kureshi J.—These appeals in-volve the same assessee and the ques-tions raised by the Revenue also overlap.These appeals are, therefore, heard to-gether and are being disposed of by thiscommon order.

The Revenue has challenged the com-mon judgment of the Income-tax AppellateTribunal, Ahmedabad (“the Tribunal” forshort) dated June 21, 2013, for threeseparate assessment years, i.e., 2008-09;2009-10 and 2010-11. The assessee wassubjected to search proceedings duringwhich, he disclosed that in the cost ofconstruction of a house, an undisclosedincome to the extent of Rs. 1.50 croreshad gone into. However, this statementwas later on retracted. In addition to thevalue of the house; including the landshown at Rs. 1.34 crores (rounded off),the assessee filed the return of incomedeclaring further investment of Rs. 38.30lakhs (rounded off) in such house from theundisclosed sources. The issue in these

appeals center around the additions madeby the Assessing Officer—deleted by theCommissioner of Income-tax (Appeals) andthe Tribunal towards undisclosed invest-ment of the assessee for the purchase ofland and construction of the house. Sincethe construction spells over the threeassessment years, the cost thereof hasbeen broken down by the Assessing Officerby giving effect in each year separately.

During the assessment proceedings,the assessee disputed an additional in-vestment in purchase of land in excess ofRs. 42 lakhs shown in the books. Withrespect to the cost of construction, theassessee stuck to its return in which theadditional cost of Rs. 38.30 lakhs fromundisclosed sources was declared. Tosubstantiate this claim, the assessee pro-duced a report from a valuer who esti-mated the cost of construction; includingfurniture and fixtures at Rs. 1.36 crores.The Assessing Officer referred the matterfor valuation of land and building to theDepartmental Valuation Officer (“DVO” forshort). As per the DVO’s report, the costof land would be Rs. 65.38 lakhs (roundedoff) and the cost of construction excludingfurniture and fixure would be1. Oral Judgment


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Rs. 1,24,22,000. To such cost of construc-tion estimated by the DVO, the AssessingOfficer added a sum of Rs. 13.5 lakhstowards furniture and came to a figure ofRs. 1,37,22,000. Thus, there was a minordifference of Rs. 1,22,000 in the cost ofconstruction estimated by the DVO ascompared to the report of the assessee’svaluer. Despite such minor difference,strangely the Assessing Officer in theassessment order added a sum ofRs. 1.71 lakhs (rounded oft) towards thecost of construction in the assessmentyear 2008-09; Rs. 11.06 lakhs (roundedoft) for the assessment year 2009-10 andRs. 14.90 (rounded oft) for the assess-ment year 2010-11. Thus, the total additionof Rs. 27.69 lakhs (rounded off) came tobe made by the Assessing Officer for thethree assessment years towards the costof construction.

The Assessing Officer also added asum of Rs. 23.38 lakhs (rounded off)towards investment in purchase of land,accepting the DVO’s report.

These additions were challenged bythe assessee before the Commissioner(Appeals). The Commissioner of Income-tax (Appeals) deleted both the additions.With respect to the cost of construction,the Commissioner of income-tax (Appeals)observed as under:

“19. I have carefully considered thesubmissions made by the appellantand have gone through the assess-ment orders passed by the AssessingOfficer. I have also gone through thevarious judicial decisions relied upon

by the appellant and the related pro-visions of the Act.

19.1 It is an undisputed fact that theappellant during the course of searchproceedings repeatedly made the ad-mission under section 132(4) if theIncome-tax Act confirming the fact thathe has incurred the expenditure ofRs. 1,50,00,000 out of his undisclosedincome in the construction of bungalowNo. 4 Janod, Amarkunj Society andaccordingly, he has disclosed unex-plained investment of Rs. 1,50,00,000in the construction of bungalow as hisunaccounted income. The relevantstatement has already been repro-duced by the appellant in his submis-sions and, therefore, the same is notrepeated for the sake of brevity.

19.2 Subsequently, the appellanthas got the construction of bungalowduly estimated by the private regis-tered valuer. The report of the regis-tered valuer is on record. As per theregistered valuer’s report, the total es-timated cost of construction of thebungalow is Rs. 1,36,00,000. The costof construction of this bungalow hasbeen shown as per the books ofaccount of the appellant and his wifeat Rs. 96,47,566. Thereafter, the ap-pellant has disclosed Rs. 38,30,000 inthe return of income for the assess-ment year 2010-11 on account of un-disclosed investment in the construc-tion of bungalow. Thus, as against thedisclosure of undisclosed investmentof Rs. 1,50,00,000 made during thecourse of search proceedings as per


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

the statement recorded under section132(4) of the Act, only Rs. 38,30,000has been disclosed by the appellant inthe return of income.

19.3 For estimating the fair cost ofconstruction, the Assessing Officer hasalso referred the matter to the DVOunder section 142A of the Act. TheDVO has estimated the fair cost ofconstruction of the bungalow atRs. 1,24,22,644. Therefore, the cost ofconstruction as per the DVO as wellas private registered valuer is almostthe same. The Assessing Officer hasrelied on the DVO’s report and madeaddition amounting to Rs. 1,71,344,Rs. 11,06,928 and Rs. 14,90,927 in theassessment years 2008-09; 2009-10and 2010-11, respectively. The totaladdition made by the Assessing Of-ficer on account of undisclosed invest-ment in construction of the bungalowfor all the assessment years isRs. 27,69,199. . . .

19.8 So far as the addition onaccount of unexplained investmentmade in the construction of house onthe basis of the valuation report isconcerned, in the case of Amit EstateOrganizer [2008] 113 ITD 255 (Ahd);[2009] 316 ITR (AT) 190 (Ahd), it hasbeen held that for making addition, theDepartment cannot make sole relianceon the DVO’s report and made additionof the entire difference. It is to sacro-sanct but an estimate by a technicalperson and is taken in advisory capac-ity. On a perusal of the valuation reportof the DVO as well as private regis-

tered valuer, it is noted that there ishardly any substantial difference be-tween these two reports. The cost ofconstruction estimated by the privateregistered valuer is at Rs. 1,36,00,000whereas in the case of the DVO theestimated cost of construction isRs. 1,24,22,644. On comparison of thereport, it is noted that the privateregistered valuer's report of the esti-mated cost of construction also in-cludes the cost of air-conditioners,electrical fixtures, movable furniture,etc., mounting Rs. 8,50,000 as well asbathroom fittings, amounting toRs. 5,00,000. The report of the DVOclearly specifies that the estimatedcost of construction does not includethe cost of AC movable items, i.e.,electrical, kitchen and gym equipment.Considering the above, there is hardlyany difference in the two estimatedvalues of construction of the bunga-low....

19.12 In view of the above, I amof the considered opinion that no ad-dition is called for on account of thesole reliance on the DVO’s report ashas been made by the AssessingOfficer since the value of the cost ofconstruction as determined by the DVOis almost the same as has been shownby the appellant including the disclosedamount of Rs. 38,30,000. In view of theabove, I do not find any reason foraddition to be made on account of theDVO’s report when there is hardly anydifference in the cost of constructionas shown by the appellant and the


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

DVO’s report. Accordingly, the additionmade by the Assessing Officer ofRs. 1,71,344; Rs. 11,06,928 andRs. 14,90,927 for the assessment years2008-09; 2009-10 and 2010-11, re-spectively, is deleted since there is nojustification in making any such addi-tion. This ground of appeal is accord-ingly allowed for the above years.”

In so far as addition for purchase ofland is concerned, the Commissioner ofIncome-tax (Appeals) held and observedas under:

“21. So far as the addition made forthe assessment year 2008-09 on ac-count of undiscloscd investment in thepurchase of land for construction ofbungalow amounting to Rs. 23,38,200is concerned, it is noted that the As-sessing Officer has made the additionon the basis of the DVO’s report. TheDVO has estimated the cost of landat Rs. 65,38,200 as against the re-corded value of Rs. 42,00,000 in thebooks of the appellant.

21.1 It is an admitted fact that therewas no admission in respect of theundisclosed investment in purchase ofland. The disclosure was made by theappellant only in respect of construc-tion of the bungalow. No adversematerial/document has been foundduring the course of search proceed-ings indicating that the investment inland is more than what has beenrecorded in the books of account. Theonly defect with respect to the pur-chase of land as has been pointed outby the Assessing Officer is in respect

of expenditure incurred on account ofstamp duty, additional stamp duty,registration fees, etc., amounting toRs. 1,25,050. The same has not beenaccounted for by the appellant forwhich separate addition has alreadybeen made. There is no other evidencepointing out the fact that the land hasbeen purchased at higher price thanthe documented amount.

21.2 There is no dispute to the well-settled legal proposition that no additioncan be made merely on the basis ofthe valuation report, which is just anestimate prepared by a technical per-son. Whenever the Assessing Officerwants to adopt the valuation made bythe DVO, he is first of all required topoint out the defects in the accountsmaintained by the assessee or toindicate that the cost shown in thebooks of account is not correct.

21.3 In the present case, the As-sessing Officer has not pointed out anydefect in the books of account basedon which reference under section 142Acan be justified so far as the cost ofland is concerned. There is nothing onrecord to suggest that there is anydefect in the books of account main-tained by the appellant-firm so as toconclude that books of account main-tained by the appellant-firm cannot berelied upon so far as the purchaseprice of land is concerned.

21.4 In the present case, the As-sessing Officer has made the additionmainly on the basis of the valuationreport made by the DVO. There is not


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

a single stance to show that the ap-pellant had actually incurred the ex-penditure that was more than thatrecorded in the books of account.There is no reference to any suchevidence found even during the courseof search proceedings.

21.5 Considering the entire factsand circumstances of the case, I amof the considered opinion that so faras the addition on account of unex-plained investment made in the pur-chase of land on the basis of thevaluation report is concerned, no solereliance on the DVO’s report can bemade for the purpose of making addi-tion of the entire difference. In view ofthe above, the addition made by theAssessing Officer as undisclosed in-vestment of Rs. 23,38,200 in purchaseof land on the basis of the DVO’sreport is deleted. This ground of appealis accordingly allowed.”The Revenue challenged the said or-

der of the Commissioner of Income-tax(Appeals) before the Tribunal. The Tribunalconfirmed the view of Commissioner ofIncome-tax (Appeals) giving further sepa-rate reasons. The Revenue has thereuponfiled these appeals.

We have no reason to interfere with theconcurrent reasonings of the two authori-ties below. Firstly, taking the issue of costof construction, it clearly emerges from therecord that between the DVO’s estimationof cost of construction without furnitureand fixture and that of the assessee’svaluer, there is a minor difference ofRs. 1.22 lakhs. When we are considering

the total figure in the vicinity of Rs. 1.36crores, this difference is insignificant. Evenif, therefore, the Assessing Officer hadaccepted the DVO’s report in its entirety,the total addition under the head could nothave exceeded Rs. 1.22 lakhs. He insteadmade an addition of Rs. 27.69 lakhs, forwhich we see no basis whatsoever. Learnedcounsel, Shri K.M. Parikh, strenuously urgedthat the construction was carried out inthree separate previous years relevant todifferent assessment years. The AssessingOfficer had, therefore, divided the undis-closed investment in the cost of construc-tion in these three years. Even if this beso, we fail to see how the total of thesethree years of expenditure could exceedRs. 1.22 lakhs which was the differencebetween the DVO’s valuation and that ofthe valuation of the assessee’s valuer, onthe basis of which he filed the return.

Coming to the question of addition to-wards purchase of land, the Commissionerof Income-tax (Appeals) as well as theTribunal both have examined the issue onthe basis of the material available on record.It is noted that the assessee had made nodisclosure towards the purchase of land inhis statement during the search proceed-ings. The addition was made merely on thebasis of the DVO’s report without therebeing any other material. Moreover, theDVO had also substantially relied on jantrirates and had made other references forarriving at the valuation.

Both the issues are based primarily onfactual aspects. No question of law, there-fore, arises. All these appeals are dis-missed. IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

avenues of investments before taking anyinvestment decision. Comparison of Ratesof interests yielded by residential proper-ties with indices of other forms of invest-ments is a study of relationship amongthree variables, i. e., Interest Rate Yieldedby Residential Properties, Economic Indi-ces for Alternative Avenues for Invest-ments and Condition of Economy (Boomperiod / recession). Obviously knowingany two the third variable can be predictedwith fair accuracy. This makes Compari-son of Rates of interests yielded by resi-dential properties with indices of otherforms of investments a useful study forvaluers. It enables an investor to getindication of real estate market trend andhelps him to decide whether he shouldinvest, disinvest or remain invested. It alsohelps a valuer to select an appropriate rateof interest, under income approach, for

Capitalization of net annual income into aMarket Value equivalent considering theoverall economic situation availing at thetime of valuation. Hence the study may beof interest not only to the valuers but alsoto other people such as investors, devel-opers, builders, etc.Recently I have under-taken a project work in partial fulfillment ofthe requirements for award of the M. Val.(R. E.) degree in which one of the objec-tives of the study has been to Comparethe Rates of Interest Yielded by the Resi-dential Properties and Various EconomicIndices. A sample of some twenty oneresidential sale instances has beenanalyzed to estimate rates of interestyielded by them. And they have beencompared with the economic indices likeSENSEX, NIFTY and Consumer PriceIndex on the corresponding dates.2. SCOPE, LIMITATIONS & METHOD-OLOGY – The study covers a period ofthree years. It covers residential propertiesincluding flats as well as independenthouses situated in urban as well as pe-ripheral villages. Since the real estatetransactions lack transparency the infor-

COMPARISON OF THE RATES OF INTERESTYIELDED BY THE RESIDENTIAL PROPERTIES WITH

INDICES OF OTHER FORMS OF INVESTMENTS–A CASE STUDY AT INDORE

—K.C. JhavarM. Val. (R.E.)

Indore(F. 11722)

✍

1. INTRODUCTION – Realestate is one of the severalavenues of investments. Andtherefore an investor com-pares risks and benefits likelyto accrue from the different


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

mation about the actual price paid andprevailing rentals in the area has beencollected by conducting personal inter-views with the present owners, tenants,and other people in the know of the realestate market in the area has been ac-cepted as true and fair. The interest ratesyielded by the residential properties havebeen estimated by analyzing the saleinstances using the following relationships:Capital value = Net Annual Incomex Y. P. Y. P. (In perpetuity) = 100 / InterestRate Capital value = Net Annual Incomex 100 / Interest Rate Interest Rate = 100x Net Annual Income / Capital ValueIt isobvious from the aforesaid relationship thatif net annual income and capital value areknown rate of interest yielded by theproperty can be estimated. It may also benoted that the Market Value of the propertyand the interest yielded by the property areinversely proportional to each other. Hencewhen the interest rate yielded by theproperty increases the Market Value of theproperty decreases and vice – versa.

3. DATA / INFORMATION COLLECTION- The sample of sale instances included21 residential properties which were soldfrom March 2007 to March 2010. The ratesof interests yielded by these propertiesand the economic indices of the corre-sponding dates have shown at Annexure– I. Though a number of Economic Indicesare available such as SENSEX, NIFTY,Consumer Price Index, FOREX Rates,Gold Prices, etc. Out of these SENSEXand NIFTY are very popular and regularlypublished in print as well as electronic

media. Hence the discussion in this articlehas been restricted to these two indicesonly.

4. ANALYSIS OF DATA - The data socollected has been analyzed both graphi-cally as well as statistically.

4.1 Graphical Analysis - The Interestrates yielded by the residential propertiesand the economic indices have been plot-ted on a graph taking “Time” on abscissaand “Rate of Interest and Economic Indi-ces” on ordinate (Annexure – II). Trend ofthe movements of the curves in relationto each other has been observed foranalysis.4.2 Statistical Analysis – Coefficient ofcorrelation between any two streams ofdata (one of which has always been rateof interest) has been worked out to findout relationship, if any, between the twostreams of data. For example coefficientof correlation between Rate of Interestyielded by the residential properties andthe SENSEX on the corresponding dateshas been estimated to find out to find outrelationship between the two.5. CONCLUSION –

It is seen from the graph that SENSEXand interest curves are diverging fromMarch 2007 to September 2008 and againfrom June 2009 to March 2010 indicatinggrowth periods of the economy. We alsoobserve from the graph that during diver-gence (Growth period) interest ratesyielded by the real estate show a down-ward trend. It means that during this periodreal estate prices show an upward


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

trend.From September 2008 to March2009 they are observed to be convergingindicating a period of recession in theeconomy. It may be observed that duringconvergence (Recession period) the inter-est rates yielded by the residential prop-erties show an upward trend indicatingthereby a downward trend in the propertyprices.These relationships provide usefulindications about the trend of real estatemarket and help in decision making.These may also help a valuer in his roleas a real estate consultant. Knowing trendof economic indices one may get anindication of the trend of real estate mar-ket. From the interest curve he caninterpolate the rate of capitalization on thedate of valuation.

Further the relationship between theRates of Interest yielded by the residentialproperties in Indore and the economicindices such as SENSEX, NIFTY, Ex-change Rate (USD – INR) and the Con-sumer Price Index have been statisticallyprocessed to find out the coefficient ofcorrelation between Interest rate and theEconomic Indices and the results are asunder: The coefficient of correlation be-

tween Rate of Interest and SENSEX hasbeen found to be 0.17 which indicates verylow degree of correlation between thetwo.The coefficient of correlation betweenRate of Interest and NIFTY has beenfound to be 0.38 which indicates lowdegree of correlation between the two.Thecoefficient of correlation between Rate ofInterest and Exchange rate (USD / INR)has been found to be 0.1977 which indi-cates low degree of correlation betweenthe two.The coefficient of correlation be-tween Rate of Interest and ConsumerPrice Index (for Industrial Workers) hasbeen found to be 0.65 which indicatesmoderate degree of correlation betweenthe two.

Thus we find that comparison of theRate of interests yielded by the residentialproperties and the various economic indi-ces is a useful exercise for the valuerwhich provides an indication of the realestate market trend. This needs to be donean ongoing basis. All sale instances mustbe analyzed to estimate the rate of intersyielded by them. They may be comparedwith the economic indices which are freelyprovided by the media.

(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Indian Valuer / June, 2015 715

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Before we enter into certain issues,such as meaning of property valuation,what method to be adopted for carryingout the valuation, purpose of thevaluation for the property owner & manyother aspects, related to the valuationwork, we have thought of sharing someof our interesting experiences whilecarrying out the valuation assignments.

In our opinion, these experienceswould reveal number of aspects relatedto the valuation work & other issues,which could be useful for the Valuer.

1. For carrying out valuation work of land,building & machinery belonging to aborrower, we visited the factory whenthe machinery to be valued was shownby the borrower to us.

Since the list of machinery alongwith the information, such as name ofthe machine, new or second hand, yearof purchase & purchase value was notready with him, he promised to submitthe same next day to us andrequested to inspect the machinery.

We inspected the machinery andrespective name plates and made thelist of the machines we inspected forour reference.

PITFALLS / DIFFICULTIES EXPERIENCED WHILECARRYING OUT PROPERTY VALUATION WORK

—A.C. BhideDME, DEE, AMIAE

Pune(L. 11576)

✍

Next to the borrower’s plant, therewas another plant, which we visitedfor getting some information regardingmarket value of the land & otherinformation, which would be useful whilecarrying out the valuation work.

During our observations, we sawsome vacant machinery locations havingonly foundation bolts. As a part ofcuriosity we asked the owner of thecompany regarding the same, who replied“Sir, yesterday only some of the machineshave been shifted to neighbouring planton lending basis for some days.

We understood that some of themachines we had inspected in theborrower’s plant were not belonging to him,which he had claimed as his machines.

Our curiosity did help us to findout the truth, which we reported tothe bank and then needful was doneby the bank.2. There is a similar type of experiencewhen we were inspecting the machinesin the factory as per the machinerylist submitted by the borrower to thebank.

Because of having long experienceof working in industries, we could


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

recognize that some of the machines weresecond hand machines, which was notmentioned in the machinery list sub-mitted to the bank.

Naturally, the second hand machinerywas considered for higher depreciation,resulting into reducing total valuation, whichwas challenged by the borrower.

When the bank asked him the truth,there was no alternative for theborrower than to say “Sir, while submittingthe list of machinery and other details,this point was missed from our side”.

We are sure that an intelligent Valuerwould be able to draw an appropriateinference from the above incidence.

3. We remember that once a flat wasshown by the person who wanted to takeloan from the bank.

As per our standard practice, duringthe visit we demanded Sale Deed /Purchase Deed / Agreement from theborrower along with tax notice fromthe corporation, when he informed usthat he had lost all the documentswhile shifting to that flat.

After our detailed investigation, itwas found that the person was stayingin the flat on rental basis only, formore than 15 years.

As a consequence, the bankrefused his proposal for the loan.

4. Once we had to visit a flat underconstruction on 9th floor of the building.

During the visit we insisted to climb

up the staircase up to 9th floor forinspecting the construction progress ofthe subject flat.

To our surprise, the site in-charge &the borrower both tried to convince us,that going to 9th floor would be veryvery difficult, dangerous & risky as suchthe same should be avoided, since therewere scaffoldings on the staircase & alsothe staircase steps were in unfinishedcondition.

After grilling the site in-charge in ourengineering manner, he ultimately agreedthat, the construction had been carried outup to 8th floor only & balance floorswould be constructed as per planning,within next three to four months.

Needless to mention that theborrower had vanished for his urgentwork in the meanwhile, and we hadto report to bank regarding the factabout the status of the subject flat.

Some of the common problems faced bythe valuer are as follows:A) Sending some representative for

showing the property bythe borrower, who doesn’t know theexact details of the property.

B) Submitting old 7/12 Extract & otherdocuments belonging to the land & notthe latest 7/12 Extract with relatedPherfar documents as required.

C) Not demarcating the boundaries ofthe land properly by fence / wallor by any other means, making theValuer unable to see the exact


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

location & other land details of theproperty for taking relevant photo-graphs.

D) Claiming different zones for theproperty than the zone earmarkedfor the subject land by the concernedauthorities e.g. claiming commercialzone instead of residential zone etc.

E) Giving misguiding information regard-ing N. A. (Non Agricultural) status ofthe land.

F) In case of building & structures,the relevant documents such asApproved Plan, Commencement Cer-tificate, Plinth checking certificate &Completion Certificate from theauthorities are not submitted, makingthe Valuer confused about properauthentification of the constructionwork carried out.

G) Approved plan from the respectiveauthorities is not submitted in theabsence of which, many issuescannot be confirmed by the Valuersuch as, details given on theapproved plan in the table on theright hand side of the plan, givingplot area, plinth area, groundcoverage area, area going under roadwidening, FSI used vis-à-vis utilizedand many other details.

5. In case of flat / commercial propertygiven on rental basis, the rental receiptor lease agreement is not submittedsince the market value of the flatis affected due to rental status.

6. Many times it is informed to thevaluer that hardly any document isavailable & Valuer has to carry out valu-ation work with the help of whateverdocuments available or on the basisof old valuation report made by someValuer previously. In such case, Valueris supposed to go in only technical &relevant details of the property asrequired to carry out the valuation work& mention regarding unavailability ofdocuments from the borrower / bank inthe valuation report. ( He may use theold report for documents copies onlyand for not any other data from theold report).

7. Taking the valuer to the particularpersons by the borrower for gettingmarket value of land, flat etc., whoare pre-informed about the visit, whomisguide the Valuer. It is a ‘must’ that theValuer makes independent inquiriesabout the prevailing market rates.

8. Regarding plant & machinery, theborrower or the owner is reluctant toreveal the information regarding sys-tems & procedures adopted in the plant,such as machinery maintenance, qualityformats, production flow chart, list of theproducts manufactured, list of thecustomers & many others, in whichcase the borrower should be explained,how the market value indirectly dependsupon these aspects, which areindicating the health of the machinery,in turn market value.9. In case of old plant & machinery, for


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

increasing the cost of machinery, thefactory owner / borrower claims that lot ofmodification work has been carried forimproving machinery efficiency.

If proper & authentic details of theexpenses incurred for the modificationsare not available. The relevant aspectshould not be considered while arrivingat the market value.

Some of the guidelines are as follows:

1. Indirectly studying the sincerity of theborrower & persons around him(with whom you are concerned), whichhelps to get correct perspective ofgetting the property information underconsideration. (whether you would begetting accurate & authentic informa-tion or not).

2. Insist on getting essential docu-ments, the list of which is to besubmitted to the borrower in advance.(Use all the skills to get maximumnumber of documents).

3. Motivate the borrower or the partyfor whom the valuation is to becarried out, in a polite manner,skillfully emphasizing on essentialityof getting required documents, whichhelps bank authorities to expediteloan sanction.

4. Inform the party that the bank isalways happy to know about theimportant documents referred by theValuer, resulting in taking appropriateaction speedily regarding the loansanction to the borrower by the

bank considering his sincerity andtruthfulness.

5. Inspect the property & the situationaround, very carefully & note downpositive & negative aspects of theproperty, related to its market valuefor referring them in the valuationreport appropriately.

6. Make proper enquiries from knowl-edgeable persons till you are thor-oughly satisfied about getting correctinformation to the maximum extentpossible.

7. Build – up friendly relationship withthe Real Estate Agents and explainto them your position as a bank’svaluer and request them for relevantinformation & the prevailing marketrate of the property as per theirknowledge.

8. While enquiring with differentsources, ensure that the enquiriesare made alone & not along withthe borrower / owner of the propertyor any other representative. (It isbetter to make inquiries from varietyof sources such as watchman ofthe society, nearby small hotels, aprovision shopkeeper, unofficial realestate agents, in addition to realestate agents to arrive at theproper conclusion.

9. Since carrying out valuation work isa skillful & totally engineered job,ensure that the relevant property isinspected considering every aspectof engineering.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

10. Always ensure that certain valuationdocuments are positively madeavailable such as, latest 7/12Extract, Approved Building Plan,Non Agricultural Status Certificatealong with Town Planning Depart-ment sanction plan, Agreement / SaleDeed / Transfer Deed, and otherrelevant documents as the case maybe.

11. Ensure that you are inspecting thecorrect property as per the detailsgiven by the bank or the party /borrower / owner to avoid any futureconfusion. (Since in some casesbank authorities request the Valuerto show the property at the laterstage).

12. While inspecting the land / plot,ensure that the plot boundaries areconfirmed by corner stone or byfence / wall or by any other suitablemeans. (Include them in photo-graphs).

13. Whenever there are doubts aboutthe dimensions pertaining to thesubject property, take actual meas-urements in the presence of theborrower.

14. In case of valuation of buildings& structures, keep good rapportwith the architects to get prevailingconstruction rates, as required.

15. Building own reference data file re-garding prevailing construction mate-rial rates.

16. In case of machinery, keepingrecord of price increase data suchas, index used by Income TaxDepartment, Index as per surveyof Reserve Bank of India etc. (Year-wise increase in machinery pricesfor calculating the replacementvalue).

17. Keeping record of real estate ratesas published every week in certainnewspapers (or any other source).

18. Be extra careful while carrying outvaluation of property having N.P.A.(Non Performing Asset) status, whereyou may come across any un-ex-pected problems. ( Ensure that properrealizable & distress values arementioned as per the status &positive / negative aspects of theproperty).

19. Take relevant photographs of theproperty & ensure that the owner/borrower / representative is includedin one of the photographs.

20. Refer advertisements in the NewsPapers pertaining to constructionactivities and their details. (Tounderstand the market trend).

21. Since carrying out valuation is anart and science, use all your skillssuch as having curiosity, being politebut firm with the concerned borrower,habit of collecting the facts aboutthe property, collecting relevant in-formation about the property what-ever possible by using appropriate


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

skills resulting in to getting correctperspective of the property.

22. In case of any doubts or anyproblems about the property, dis-cuss the same freely with the bankas well as with the borrower / owneras the case may be.

23. Be extra careful while carrying outvaluation of property underGrampanchayat area & always insiston getting essential / required docu-ments authenticated / approved byappropriate authorities.

24. It is advisable to enclose importantdocument copies with the Valuationreport such as (1) 7/12 Extract, (2)Index II, (3) Corporation Tax Notice/ Tax Receipt (4) Approved BuildingPlan in parts of A4 size paper,(5) Right hand side table on theapproved plan covering a l ldetails such as, area of the plot,area under road widening, netplot area, F.S.I. allowed, F.S.I.consumed etc.

25. Keep habit of asking for ‘SearchReport’ of the property to theborrower or bank authorities whichensures the ‘Title Clearance’ of theproperty.

26. Last & the best that be alwaystrue with your profession as avaluer and be professional whilecarrying out the valuation work.

********Considering the problem of getting

appropriate documents from the bor-rowers, we have prepared our own listof documents to be submitted to theborrower always in advance. (To makethe borrower aware of the importance tokeep the documents ready to bereferred during the visit to theproperty).

LIST OF DOCUMENTS REQUIREDFOR CARRYING OUT VALUATION(PREPARED ON THE BASIS OFOUR EXPERIENCE)

A. Flat:

1. Agreement for sale / transfer deed/sale deed / gift deed etc.

2. Index – II

3. Commencement Certificate for theconstruction.

4. Completion Certificate for the flat/building.

5. Approved Building Plan / TypicalFloor Plan by respective authorities.

6. Latest Property Tax Bill / Receiptfrom the respective authority.

7. Latest Electricity Bill.8. Appropriate Gunthewari Certificate /

Niyamit Karnyacha Dakhala, if theproperty is under Gunthewari rules& regulations.

9. Possession Certificate in the nameof the owner.

10. N.A. Order for the land/ Zone Certifi-cate (Residential, Commercial etc).

11. Share Certificate from the society


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

(In case of society).

12. Any other document the borrower ishaving, useful for carrying out thevaluation e.g. allotment of parkingarea if not mentioned in Index -II.

B. Land & Bungalow :

1. Land Agreement / Any other rel-evant document.

2. Index – II.

3. 7 / 12 Extract - Latest ( along withPherfar Document if essential ).

4. Appropriate Gunthewari Certificate ( Ifproperty is under Gunthewari Rules/ Regulation ). This is applicable forthe states where, already built-uphouses without authorization wereregularized at later stage by StateGovt.

5. N. A. Order for land.6. Layout Plan for plot showing other

structures in the plot premises.( such as overhead water reservoir,underground water reservoir, borewell, ETP Plant etc. )

7. Approved Building Plan fromrespective authority.

8. Property Tax Bill / Receipt fromrespective authority.

9. Electricity Bill / Telephone Bill -Latest.

10. Share Certificate from the respec-tive authority if applicable.

11. 8-A Extract. (In case of

Grampanchayat area).

12. Zone Certificate whether residential,commercial or otherwise.

13. Commencement Certificate for theconstruction from respective author-ity.

14. Completion Certificate from respec-tive authority.

C) LAND :

1. Land Agreement / Sale Deed /Relevant document.

2. Index – II

3. 7 / 12 Extract – Latest along withPherfar documents. ( If essential )

4. Latest Property Tax Bill / Receipt

5. Layout Plan of the land.

6. Zone Certificate.

7. N. A. Order if land is Non –Agricultural with approved layout byTown Planning Department.

8. Land Demarcation Layout preparedby respective authorities.

D) Land, Building & Structures (BE-LONGING TO THE INDUSTRYOR COMPLETE COMMERCIALOR RESIDENTIAL COMPLEX)

1. Land Agreement / Sale Deed orrelevant document.

2. Index – II

3. 7 / 12 Extract – Latest along withPherfar documents, if essential.

4. Latest Property Tax Bill / Receipt


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

5. Approved Layout Plan showing each & every building & structure on theplot by respective authorities.

6. Zone Certificate - Residential / Commercial / Or any other.

7. Commencement Certificate.

8. Completion Certificate.

9. Built – Up area in the following format : (Matching to approved plan)

Sr. Name of the Building/ Number of Floor Built-up AreaNo. Structure i.e. Ground, First etc. in Sq. Mtr./Sq. Ft.

1.

2.

3.

4.

10. List of the structures / building other than which are not shown on theapproved plan.

For the M.I.D.C. Property / Any other industrial area as per certifiedzone:

1. Lease Deed / Transfer Deed / any other relevant document.

2. Allotment Letter from M.I.D.C. / society of the industrial area.

3. Layout Plan / Building Plan approved by M.I.D.C. or other relevant authority/Industrial Development Corporation.

4. Commencement & Completion Certificate from M.I.D.C.

E. Plant & Machinery :

1. List of Machinery.

2. Invoices or bills showing Purchase Value / Bill of lading, custom clearancedocument in case of imported machinery.

3. List of plant & machinery details as per following table :(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Srl. Description Qty. Indian/ New/Second Purchase PurchaseNo. / Item Imported Hand Year Value (Rs)

1.

2.

3.

4.

F. Additional documents for factory valuation :

1. Insurance Policy

2. List of customers ( Indian & foreign in case of export ).

3. Flow Chart of production.

4. Fire Fighting System / Arrangement.

5. Leaflet / Brochure of the company.

6. Product Mix. ( Products manufactured ).

7. Balance Sheet having fixed asset page giving gross value, depreciation &net value details.

8. I.S.O. 9000 Certification or similar certification copy. ( If acquired ).

9. Quality Policy, if prepared.

10. Index of ‘ Quality Manual ’ in case of I.S.O. Certification.

11. Any appreciation letters if received from customers.

12. Factory Management Organisation Chart.

4. Preventive Maintenance Chart - If there is a system of P.M.

5. Quality Format for final quality inspection made for the product manufactured.

(Items mentioned in item ‘F’ are not compulsory but those are helpful to angive appropriate perspective of the organisation to the bank).

N.B. Please note that above list is prepared for guidance only. Valuer has to use hisjudgment regarding procurement of documents from the borrower to ensure thatthe valuation is appropriate and accurate and the required information isincluded in the Valuation Report property. IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Development in Mumbai is governed by the Development Control Regulations forGreater Mumbai, 1991 & as amended from time to time.

In 2010-11 Municipal Commissioner observed that Architectural features, air handlingunits, voids, flower beds & such other features which were permitted free of F.S.I.were misused by making alterations & forming part of the premises, therefore, herecommended to Urban Development Department to modify D. C. Regulations,accordingly, Government of Maharashtra issued notification on 6th January 2012.

As per the notification the regulation 35(3) & 35(4) were added in the D. C.Regulations, moreover, regulation 35(2) has been substituted by modified regulation.

In Regulation 35(3), the Government has given the list of users to be counted inF.S.I. for example covered parking space, fire escape balconies, air conditioned plantroom / A.H.U. / balconies, niches etc.

In Regulation 35(4), the Government has given the details of % of compensatoryF.S.I. which is termed as Fungible Compensatory F.S.I.

Vide Notification No. CMS 4311/452/CR-58/2011/UD-11 dated 6th January 2012 theUrban Development Department, Government of Maharashtra has modified the saidDevelopment Control Regulations. According to the modifications, sub regulations (3)& (4) are added to Regulation 35 wherein; list of users permitted free of F.S.I. withthe special permission of Commissioner, Fungible compensatory F.S.I. over & aboveadmissible F.S.I. may be permitted. Followed by the said modifications, MunicipalCorporation of Greater Mumbai issued circular No. CHE/22276/DP/Gen dated 12.01.2012wherein; the details of quantum of permissible fungible F.S.I. according to the useris quantified as under.

Residential user : 35%

Non residential user including commercial & industrial user : 20%

For valuers, it would be important to study the effect of Fungible F.S.I. on valuationas same would be required for preparing valuation report as well as project reportprepared for property proposed to be taken for redevelopment as well as for vacant

EFFECT OF FUNGIBLE F.S.I. ON VALUATION OFIMMOVABLE PROPERTIES

—Bharat ShahArchitect & Valuer

G.D. Arch, AIIA, FIVMumbai

✍


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

piece of land. In such reports, the potential in terms of F.S.I. forms the integral part.

Following case study of proposed redevelopment of a society building in Khar (West)will simplify to understand the working.

The existing building is of stilt plus six upper floors served by a staircase & alift. On each floor there are two flats; making total number of flats in existing buildingas 12.

Table – [I]

(a) Plot Area : 1,000.00 sq.mts.

(b) Permissible F.S.I. : 1.00

(c) Permissible built up area as per F.S.I. 1.00 : 1,000.00 sq.mts.

(d) As plot falls in T.D.R. receivable zone,T.D.R. permissible would be 100% of net plot area : 1,000.00 sq.mts.

(e) Total permissible built up area (c) + (d) : 2,000.00 sq.mts.

(f) 35% fungible F.S.I. on total permissible built up areaof 2,000 sq.mts. : 700.00 sq.mts.

(g) Total built up area including 35% fungible F.S.I. (e) + (f) : 2,700.00 sq.mts.

According to Government Notification dated 6th January 2012 read with M.C.G.M.circular dated 12.01.2012, with special written permission of Municipal Commissionerareas of staircase / lift wells including lobbies can be claimed free of F.S.I. by payingpremium at 25% of Stamp Duty Ready Reckoner rates for developed land.

In existing building full F.S.I. of 1.00 was consumed i.e. 1,000 sq.mts. of built uparea & 10% balcony, thus, built up area inclusive of10% balcony area works out to1,100 sq.mts.& in view of notification of 2012 the society succeeded in negotiating withthe developer to allot additional 25% area in new building. This was on the basisof 35% fungible F.S.I. available without any premium for rehab component, however,the developer has to incur cost of construction, hence, they amicably arrived at 25%,thus, total built up area towards rehab component is

1,100 sq.mts. + 25% of 1,100 sq.mts. = 1,375 sq.mts.

On the basis of above, built up area available to the developer works out to:

Table – [II]

(a) Basic F.S.I. in terms of built up area : 1,000 sq.mts.

(b) T.D.R. : 1,000 sq.mts.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

(c) Fungible F.S.I. of 1,100 sq.mts.

(i) 25% on rehab component : 275 sq.mts.

(ii) 35% on sale component : 350 sq.mts.

2,625 sq.mts.

(c) Add area of staircase & lift at 12% on totalbuilt up area of 2,625 sq.mts. : 315 sq.mts.

2,940 sq.mts.

(Generally, the extent of staircase & lift area is about 12%)

After deducting area to be handed over to existing societymembers, balance area available to the developer for salein open market remains as : 2,940 sq.mts.

Less 1,375 sq.mts.

1,565 sq.mts.

Project cost:

[A] Utilization of T.D.R. on the plot:

(a) 33% T.D.R. to be purchased from the Government

According to Government Notification No. TPB-4308/776/CR-127/2008UD-11 dated24th October 2011 in case of proposals in which it is proposed to utilize T.D.R.it is mandatory to purchase 33% T.D.R. from the Government at a premium tobe worked out based on the Stamp Duty Ready Reckoner Rate for the open landfor the year 2008.

Total area of T.D.R. permissible on 100% of net plot area : 1,000 sq.mts.

33% to be purchased from Government (1,000 sq.mts. × 0.33) : 330 sq.mts.

As per Stamp Duty Ready Reckoner 2008, the land rate is ‘83,400/- per sq.mt.and according to the annexure on page 5 & 6 of the Notification wherein workingof premium rate for additional 0.33 F.S.I. is illustrated, accordingly, for the presentcase the premium works out as under.

Premium towards purchase of 33% T.D.R. from Government:

Rate of developed land is ‘83,400/- per sq.mt. i.e. the rate is between ‘70,001/-to ‘1,00,000/- per sq.mt. & according to the annexure on page 5 & 6 of the Notificationit falls in Sr. No. 9 wherein for land rate between ‘70,001/- to ‘1,00,000/- rate of premium


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

is ‘20,300/- + 10% of Ready Reckoner rate exceeding ‘70,000/- per sq.mt.

i.e. ‘20,300/- + [10% of (‘83,400/- less ‘70,000/- = ‘13,400/-)]

= ‘20,300/- + ‘1,340/- = ‘21,640/- per sq.mt.

Thus, total premium amount towards purchase of 33% TD.R. from Government wouldbe:

330 sq.mts. × ‘21,640/- = ‘71,41,200/-.

(b) Cost towards purchase of balance T.D.R. from open market

Total T.D.R. permissible : 1,000 sq.mts.

Less 33% T.D.R. to be purchased from Government : 330 sq.mts.

Balance to be purchased from open market : 670 sq.mts.

For the locality, rate of general T.D.R. to be purchased from open market is about‘2,500/- per sq.ft. / ‘26,910/- per sq.mt., accordingly, cost towards purchase of T.D.R.including completing the formalities for transfer in Development Right Certificate (D.R.C.)would be:

670 sq.mts. × ‘26,910/- = ‘1,80,29,700/-.

Add cost towards stamp duty at 3%, registration charges at 1% & othermiscellaneous expenses estimated at 2% making a total of 6%, accordingly, total amountwould be:

‘1,80,29,700/- × 6% = ‘10,81,782/- & total cost towards purchase of balance T.D.R.from open market works out to: ‘1,80,29,700/- + ‘10,81,782/- = ‘1,91,11,482/- say‘1,91,11,500/-.

(c) Premium towards 35% fungible F.S.I. for free sale component:According to Government Notification dated 6th January 2012 read with M.C.G.M.

circular dated 12.01.2012, it is permitted to utilize fungible F.S.I. to an extent of 35%of admissible F.S.I. for residential user by charging premium at 60% of Stamp DutyReady Reckoner rates for developed land, which for the subject land is ‘1,32,800/-per sq.mt.

As per latest modifications to D. C. Regulations as sanctioned by Government,for residential buildings 35% additional FS.I. / Fungible F.S.I. is permissible on basicF.S.I. as well as on T.D.R., thus, total F.S.I. would be 2.70. The fungible F.S.I. includes10% balconies, flower beds, niches, etc. In case of redevelopment proposals, for rehabcomponent no premium shall be charged for consumption of 35% fungible F.S.I.,however, it is to be distributed on prorate basis for the area of each existing tenements,


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

moreover, fungible F.S.I. of one rehab tenement cannot be used for any other rehabtenement or for any of sale component.

Thus, total premium amount payable for 35% fungible F.S.I. for sale component wouldbe:

350 sq.mts. × ‘1,32,800/- × 0.60 = ‘2,78,88,000/-.

(d) Premium towards staircase / lift area to be paid to M.C.G.M:

According to Government Notification dated 6th January 2012 read with M.C.G.M.circular dated 12.01.2012, staircase / lift area can be claimed free of F.S.I. with specialwritten permission of Municipal Commissioner by paying premium at 25% of StampDuty Ready Reckoner rates for developed land, which for the subject land is ‘1,32,800per sq.mt.

Staircase & lift area : 315 sq.mts.,

Total premium amount towards staircase / lift area:

315 sq.mts. × ‘1,32,800/- × 0.25 = ‘1,04,58,000/-.

Total amount of (a) to (d) =

‘71,41,200/- + ‘1,91,11,500/- + ‘2,78,88,000/- + ‘1,04,58,000/- = ‘6,45,98,700/- [I]

[B] Cost of construction:

Prevailing cost of construction for residential buildings with standard amenities andspecifications is estimated at ‘27,500/- per sq.mt. of built up area.

# Total built up area : 2,940 sq.mts.

Estimated cost of construction : 2,940 sq.mts. × ‘27,500/- = ‘8,08,50,000/- [II]

[C] Cost towards transit accommodation & other related expenses to existingoccupants:

(i) Transit accommodation:

Cost towards transit accommodation to existing occupants for 24 months isestimated @ ‘850/- per sq.mt. of carpet area per month. Total carpet areainclusive of balconies in occupation of existing occupants admeasures 900sq.mts.

900 sq.mts. × ‘850/- × 24 months = ‘1,83,60,000/-

(ii) Brokerage for transit accommodation:

Brokerage for transit accommodation is estimated at two months rent :


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

‘1,83,60,000/- × 2 months ÷ 24 months = ‘15,30,000/-

(iii) Charges towards packers & movers for shifting to & from transitaccommodation:

Estimated charges towards packers & movers at ‘20,000/- per flat.

12 flats × ‘20,000/- = ‘2,40,000/-

Total of [C] (i), (ii) & (iii) = ‘1,83,60,000/- + ‘15,30,000/- + ‘2,40,000/- =‘2,01,30,000/- [III]

[D] Other expenses such as payment to be made to M.C.G.M. under various headslike scrutiny fee, development charges, premium, etc. as estimated : ‘6,500/- per sq.mt.:

2,000 sq.mts. × ‘6,500/- = ‘1,30,00,000/- [IV]

[E] Other expenses / out of pocket expenses as estimated : ‘6,500/- per sq.mt.:

2,000 sq.mts. × ‘6,500/- = ‘1,30,00,000/- [V]

[F] Payment towards professional fees to Architect, Structural Engineer, RegisteredSite Supervisor is estimated @ 10% on the cost of construction of ‘8,08,50,000i.e. ‘80,85,000/- [VI].

Total of [I] + [II] + [III] + [IV] + [V] = ‘ 6,45,98,700/-

+ ‘ 8,08,50,000/-

+ ‘ 2,01,30,000/-

+ ‘ 1,30,00,000/-

+ ‘ 1,30,00,000/-

+ ‘ 80,85,000/-

‘ 19,96,63,700/-

To which, add cost towards interest on block up capital @ 21% per annum i.e.42% for 24 months on ‘19,96,63,700/- which works out to ‘8,38,58,754/- say‘8,38,58,800, making a total of :

‘19,96,63,700/-

+ ‘ 8,38,58,800/-

‘28,35,22,500/- {X}


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Sale proceeds:As worked out in Table [II] area available to developer for sale in open market

would be: 1,662 sq.mts.Based on the sale instances, prevailing rate of ownership flats in newly constructed

buildings in the locality is estimated at ‘4,25,000/- per sq.mt. of built up area, accordinglyproceeds available to the developer on sale of 1,537 sq.mts.:

1,537 sq.mts. × ‘4,25,000/- = ‘65,32,25,000/-Deduct : Cost of project as worked out above {X} = ‘28,35,22,500/-

‘36,97,02,500/-Completion period for redevelopment project is estimated as two years, therefore,

present value of ‘36,97,02,500/- is deferred for two years @ 10%, accordingly, differedvalue works out to:

‘36,97,02,500/- × 0.82645 = ‘30,55,40,631.12 say ‘30,55,40,600/-.[After redevelopment, the property tax of existing members shall be revised,

therefore, society negotiates with the developer for corpus fund, and said amount isinvested by them in term deposits and interest generated from the same can reducethe burden of additional property tax to existing members.] IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

COST OF CONSTRUCTION OF SSM INSTITUTE OFENGINEERING & TECHNOLOGY BUILDING IN PALANIROAD, KUTTATHUPATTI VILLAGE, DINDIGUL TALUK

& DISTRICT, TAMIL NADU STATE, SOUTH INDIA.UNDER S. CHENNIMALAI GOUNDER CHARITABLE

TRUST @ TIRUPPURFRONT COMMERCIAL BLOCK

—A. BalasubramanianBE, MIE, FIV

Karaikudi (TN)(F. 3761)

1.0. BRIEF DESCRIPTION OF THE BUILDING:

This Building is of RCC Framed type of GF only. The Depth of Foundation is limitedto 2.10M below Ground level.

Ground floor comprises of Canteen, Textile show room with side staircase and toiletblock etc.

Common Sewage Treatment Plant is provided for the disposal of Drainage & Toiletwaste etc. Common Over Head water tank is provided with staging. Common BoreWell and Submersible motor is provided.

2.0. PERIOD OF CONSTRUCTION :

It is reported by the Assessee that the construction was commenced and completedas under.

Commencement : November ———2009

Completion : December ———2012

3.0. METHOD OF CONSTRUCTION :

This construction was executed by labour contract only. The Assessees havemaintained books of accounts & are in possession of the Bills & Vouchers etcfor the purchase of materials etc.

4.0. DETAILS OF PLINTH AREA :

Ground floor Gents Commercial building ofFH 3.35 M & PH 0.90 M RCC Framed

(From the previous issue)

✍


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

structure Building with the existingcondition and specification etc : 319.11 Sqm or 3,435 Sqft

5.0. DETAILED SPECIFICATION OF THE BUILDING :

5.1. Ground Floor:

Foundation : Individual Column footing with Mat,

: PCC & Sand filling etc

Super structure : Brick filler walls in CM

Roof : RCC Flat roof as per the Provisions

: Contained in the IS 456/78 - Flat type

Floor Finish : Ceramic tiled flooring with 10 cm

: Side dadooing.

Joineries : Doors: Country wood Frames and Shutters

: With Novapan & Wooden finish

: Windows etc are of C.Wood

: With Glass Panels etc.

Electrification works : Concealed type wiring works with PVC

: Conduit - Switch & Plug points,

: Superior Quality Provision.

Sanitary Provisions : Indian type water closet

: with FC of Superior Quality.

Water supply provisions : PVC pipes & Pipe specials are of Nickel

: Coated Brassware of Superior Quality.

Finishes : In & Out side portions Snowcem wash.

6.0. PROCEDURE ADOPTED FOR VALUATION :

This Building is of Gents Hostel Building of Ground floor only. The period ofConstruction of this building 2009-10 & 2012-13. These Gents Hostel Buildings underthe Category of RCC Framed structures in Moffusil Area are adopted as the Basicplinth area rates for the above periods.

The State PWD has issued Plinth area rates for different types of Buildings with


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

reference to different regions for the years 2009-10 to 2012-13. And these ratesare to be adopted in three headings namely Foundation, Superstructure and Rooffinishing etc with some limitations as mentioned below.

Type of Buildings:

Residential Buildings : 1. Load Bearing 2. Framedstructure

Non-Residential Buildings : 1. Load Bearing 2. Framedstructures

Hospital Buildings : 1. Load Bearing 2. Framedstructures

Regions are:

5. For works other than Corporation Limits

6. For works in Corporation limits

Again these Corporation Limits are sub-divided as

For works in Corporation Limits

e. Trichy, Salem, Madurai and Tirunelveli

f. Chennai & Coimbatore.

These Rates are exclusive for internal services. Before that periods i.e. 2002-03all rates are inclusive of internal services as 25% (Electrification @ 10%, bothsanitary and water supply each 7.50% each) or ACTUALS.

Suitable unit rates are provided for the works not covered under Plinth Area Rates.

Suitable additions are made for the Superior specifications and Extra items of work.

Provisions included in the Foundation Rate are:

This rate given for foundation is applicable for GF + 3 in the case of Framed structure.

The rate given for foundation is to be calculated based on plinth area at Groundfloor of the building only.

The depth of foundation is 1.80 M below GL, and is of isolated footing in the Caseof Framed structure.

The foundation rates are applicable for building with basement at 0.60 M Heightfrom Ground level.The foundation rate is inclusive of earth work, Sand filling, PCC 1:5:10, Brick work


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

in CM, Refilling the sides of foundation, plinth beam including cost of Centering,Reinforced cement concrete, steel, damp proof course, Sand Filling in basementand Flooring concrete in Ground floor etc.

Provisions included in Super structure rate are :

This rate is inclusive of Brick work, RCC, Steel, Centering, Plastering, Joinery itemswith steel frames and MDF shutters for doors, steel glazed windows and steel glazedVentilators, Grano flooring 25 mm thc in the case of residential & Non-residentialBuildings, Mosaic tile flooring in the case of Hospital Building and rain water downfall pipe of adequate dia.

The height of each floor has been taken as 3.30 m average.

This rate is also inclusive of provision for Anti-skid ceramic tile flooring and GlazedTile dadooing in toilets.

This rate is inclusive of plastering with CM 1:5:12mm thc, white washing two Coatsover one coat of white washing for interior walls and color washing. Two coatsover one coat of white washing for exterior faces.

Provisions included in Roof Finishing Rate are as :

This rate is inclusive of weathering course, finishing with pressed tiles, and providingParapet wall with brickwork in CM, Plastering, white washing for Interior faces andColour washing for exterior walls.

In General suitable allowances are given for the following:

Cheaper labour availability

Own construction etc.

Additions are made for the Direct Expenses like Preparation of Plans, Licence fees,E.B. Deposits, Watch and ward expenses, Meter provisions etc.

7.0. BASIC PLINTH AREA RATES :

Basic plinth area rates for the years 2009-10 for Non-residential building are:

Foundation : Rs. 2200/sqm

Super structure : Rs. 4400/sqm

Roof finishing : Rs. 655/sqm

Basic plinth area rate for the years 2012-13 for Non-residential building are:

Foundation : Rs. 2585/sqm


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Super structure : Rs. 5670/sqm

Roof finishing : Rs. 805/sqm

Basic Plinth area rates for this Ladies Hostel Building in floor wise :

Ground floor Rs. 7158/sqm

8.0. VALUATION NORMS:

* The plinth area of each floor was measured as per the CBDT Norms.

* Adopting the basic plinth area rates, the cost of each floor is estimated.

* The value of Superior specifications and extra items was added to the totaldepending upon the specifications & conditions.

* Direct expenses are added.

* The value of Services both internal & external was added according to thespecifications and conditions etc.

* Suitable Deductions are made for the factors, which affect the normal valuationprocedures.

* Suitable Allowances are made for the own construction (7.50% for the materialspurchase & 2.50% labour co-ordination) etc.

* Finally arrived figure is the amount certified as the probable COST OFCONSTRUCTION of the building.

9.0. DETAILS OF VALUATION :

9.1. Buildings

Ground floor Commercial Building ofFH 3.35 M & PH 0.90 M RCC Framedstructure Building with the existingCondition and Specification etc :

319.11 Sqm or 3,435 Sqft @ Rs. 8158/sqm : Rs. 26,03,299

: Rs. 26,03,299

9.2 SUPERIOR SPECIFICATIONS :

Granite flooring in lieu of MosaicFlooring at Ground floor only of


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

320 sqm @ Rs. 1300/sqm : Rs. 04,16,000Provision made for Alcopanel withAl. frames etc. of 233 sqm@ Rs. 610/sqm : Rs. 01,42,130

Provision made for Alcopanel withAl.Frames etc. of 233 sqm@ Rs. 610.sqm : Rs, 01,42,130

Provision made for Kitchen top Granite& Granite sink etc...................LS......... : Rs. 15,000

PP work using GI Channel with GypsumBoard of 264 sqm @ Rs. 3229/sqm : Rs. 08,52,456

Front elevation works etc.......LS...... : Rs. 01,50,000

Total : Rs. 15,75,586

9.3. EXTRA ITEMS OF WORK :

Provision made for Masonry Septic tankfor 30 students @ Rs. 400/user : Rs. 12,000

Provision made for OHT of Masonry withStaging of 1,000 litres capacity@ Rs. 10/litres : Rs. 10,000

Connection with Bore well using PVCPipes etc...............................LS.............. : Rs. 30,000Sewage disposal with the CommonSTP etc...........................LS.............. : Rs. 15,000Provision made for Cement paverBlocks of 160 sqm @Rs. 645/sqm : Rs. 01,03,200Front compound wall of 33 RM with1.50m height of medium designworks @ Rs. 2624/RM : Rs. 86,592Provision made for 1 No. compoundgate of design work 4.50M wide....LS..... : Rs. 45,000Provision made for 1 No. Low RCC roofMotor room etc........................LS................ : Rs. 28,000Total : Rs. 03,29,792


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

9.4. SERVICES (Internal):

9.4.1. Electricals

Provision made for Switch & Plug pointsof Superior nature of 180 points@ Rs. 950/points : Rs. 90,250

Provision of Dripper of 10 Nos @Rs. 900/each : Rs. 09,000

Provision made for 120 Cm swing CeilingFan of 40 Nos @ Rs. 2000/each : Rs. 08,000

Provision made for CFL bulbsof 60 Nos @ Rs. 230/each : Rs. 13,800

Other lights etc ..................... LS ... : Rs. 10,000

Total : Rs. 01,31,050

9.4.2. Water Supply Provisions

Provision made for Bib-cock usingPVC pipes etc 6 Nos @ Rs. 2600/each : Rs. 15,600

Provision made for Head level showerpoint of 2 Nos @ Rs. 1500/each : Rs. 03,000

Total : Rs. 18,600

9.4.3 Sanitary Provisions :

Provision made for EWC with FC ofSuperior quality of 4 Nos @Rs.5000/each : Rs. 20,000

Provision made for Table-mounted WashBasin 4 Nos @ Rs. 1500/each : Rs. 06,000

Provision made for Urinals of 4 Nos@ Rs. 1500/each : Rs. 06,000

Total : Rs. 32,000

9.5. DIRECT EXPENSES:

Plan preparation charges for this building : Rs. 04,000

Watch & Ward Expenses : Rs. 20,000


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Provision made for Electric ServiceConnection etc ................. LS ..... : Rs. 20,000

Total : Rs. 44,000

10.0. ABSTRACT COST OF CONSTRUCTION:

Cost of Buildings (GF) : Rs. 26,03,299

Cost of Superior Specifications : Rs. 15,75,586

Cost of Extra items of work : Rs. 03,29,792Cost of Services (Internal):

Electrification works : Rs. 01,31,050Water Supply provisions : Rs. 18,600Sanitary arrangements : Rs. 32,000

: Rs. 46,90,327

Less an Allowance of 7.50% only sincethe Trust has purchased the materialsprudently : Rs. 03,51,775

: Rs. 43,38,552

Add : Direct expenses : Rs. 44,000

Total : Rs. 43,82,552

SAY : Rs. 44,00,000

Station : KARAlKUDl REGISTERED VALUERDate : 03.12.2012 Category-1

11.0. CERTIFICATE :Certified that the Cost of Construction of the above mentioned SSMIET FrontCommercial Building with the existing condition and specification is Rs. 44,00,000/- (One Crore and ninety-one thousand only)This Value does not cover the land value.The Cost certified is as on the date of inspection, o.e. on 17.10.2012 in the presenceof the Assessees.The Value of any items added later this date does not fall in the scope of thisValuation Report.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

This Value does not include the following items:Land ValueHostel FurnituresPillows & MatressesSecond floor building is under construction.

Value varies with the purpose. The purpose of this report is to estimate the ProbableCost invested by the Assessee in this construction nearer to accuracy.

Station : KARAlKUDl REGISTERED VALUERDate : 03.12.2012 Category-1

IV

A unique and complete book on Real Estate Valuation

Title: “VALUATION PRINCIPLES AND PROCEDURES”Author: DR. ASHOK NAIN ISBN: 978-81-908295-0-2Publication date : 2010 Pages: xxviii + 651 (HB)

Valuation Principles and Procedures is a unique and complete book that attempts to bridge thetheoretical and practical aspects of real estate valuation. The book combines various aspects of themultidisciplinary subjects encompassing law, economics, engineering and accountancy in a simple andlucid manner. It covers practically all aspects of Real Estate Valuation. It provides a comprehensivestudy of material for a student or a practising professional with numerous examples. Professionals in othermultidisciplinary fields will also find the unique approach and various discussions, reference to case laws,technical data and other related information very useful. The book has now become a standard text invaluation of various Universities where valuation is taught.

Author’s Profile

Dr. Ashok Nain is a practising Consulting Engineer, Surveyor and Valuer having nearly 40 years experience.He is associated with a number of professional organizations and has published a number of technicalpapers in India and overseas. He has won awards for his writings from both the Institution of Surveyors andfrom the Institution of Valuers. He is also a Fellow of The Royal Institution of Chartered Surveyors. Dr. Nainhas also been engaged in teaching as a Visiting Professor at Institute of Urban Management, Kolkata, atISTAR, Sardar Patel University, Gujarat and at colleges under the West Bengal University of Technology.This is his second book on Valuation.

The price of the book is Rs. 825/- and by Courier/Post is Rs. 950/- and the same can be had fromthe office of the Institution of Valuers, Plot No. 3, Parwana Road, Adjacent to Bal Bharti PublicSchool, Pitampura, Delhi - 110 034. The book can also be had from Dew Drops Education Pvt.Ltd., 27-B, Dr. Rajendra Road, Kolkata – 700 020 (E-mail : [email protected]).


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

1. Introduction

Basically the structural steel is an alloy of iron, carbon-n-little parts of manganese,chrome nickel, sulfur, phosphorous-n-copper to form its rolled steel sections like angles,tees, channels, girders-n-plates which are used as beams, truss frames, column-bases,plate-girders etc to bear loads in the module of tensile-n-compressive stresses to safethe structure in deflection-n- bending. Structural steel is weather resistant and morestress bearing than normal steel. As normal specified steel is used in utensils, toys,vehicle-frames, furniture -n-watches etc. , where loads and incoming varying stressesare not of structural type. While designing the steel structure two codes are usuallyfollowed viz. IS-Code: 800-1984 and Code 800-2000 which are known as elastic methodand limit state method respectively.

Elastic method is simple-n-easy to design the structure, wherein stress-strain relationis considered linear till yield stress. The permissible stress is kept by dividing it byfactor of safety. Factor of safety is the failure load divided by working load. But itis not true for the material. As the material can resist load after the yield appear onthe fiber of steel . Hence the section becomes uneconomical.

In limit state working load is taken into account by multiplying the factor 1.5 tostrengthen n serviceability of structure. The limitable strength is desired to avoid thecollapse of the structure n safe the life. The permissible stresses are taken much higherthan working stresses. In working stress, stresses are taken like ft=150N/mm2, whileft=227 N/mm2-n-rupture stress 295N/mm2, are taken in limit state. Though the papertheme has no concern with design differentiation, however it is seem necessary togo to narrow analogous to the stresses in respective methods of design.

2. GENERAL CONCEPT:- So far the title of the paper is concern wherein the studyhas been made for angles of equal and unequal in size but having same cross sectionalarea, have been used as tension and compression members and their ends have either

Valuation of Strength of Structural Steel AngleSections, under IS Code: 800-1984—A Case Study

with Equal vis-a-vis Unequal Angles—Manoj Kumar Varshaney,FAE, FIPHE, FIIBE, FISCE,MIE, MIWRS, MISTE, MEA.

Sr.Lecturer/ HOD. Civil Engineering, D. N. Polytechnic, Meerut (U.P.)

(f. 19145)

✍


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

single riveted or double riveted. The strength has been calculated by using variousconditional formulas and higher strength bearing condition under IS Code 800-1984,is recommended to use at construction sites where steel structures are being erected.

To make it lucid and easy & to make understandable the title to the readers itbecomes necessary to illustrate by setting an example for choosing angle ISA-200*100*15 mm and ISA-150*150*15 mm having cross sectional area 4278 mm2 areattached with 20mm thick gusset plate for its long leg /short leg jointed by 20mm diameterrivet shank. The permissible stress in tension has been taken 150 N/mm2 for Fe-250grade steel and corresponding stresses in compression have been taken from standardtable by interpolation. It has been assumed that compression member is of discontinuoustype.

3. Methodology as Tension Member:- The angle members of truss are either singleor double, used as tension member either side to gusset plate or one side to gussetplate. Which connection will give higher strength, either long leg connected or shortleg connected to gusset plate of angle, will be treated as best in economical designfor valuation.

3.1-Case Study:-

1. Single angle with gusset plate as tension member riveted with 20mm rivet diameter.

3.1-1. Single Equal Angle ISA 150*150*15mm, Connected to 20mm thick gusset plate.

connected leg area=(150-21.5-7.5) 15=1815 mm2

outstanding area=(150-7.5) 15 =2137.5 mm2

K=0.72

ANET = 3354 mm2

Ft=503100N

3.1-2. Unequal Angle

200*100*15mm whose long leg connected to 20mm thick gusset plate.

connected area=(200-21.5-7.5) 15=2565 mm2

outstanding area=(100-7.5) 15=1387.5 mm2

K=0.85

Anet=3744.375 mm2

Ft=561656N


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

3.1-3-Unequal Angle

200*100*15mm whose short leg is connected with 20mm thick gusset plate.

connected area=(100-21.5-7.5) 15=1065 mm2

outstanding area=(200-7.5) 15= 2887.5 mm2

K=0.52

Anet= 2581.74 mm2

Ft=387260.79 N

3.2-Comparative Study Table as tension single member

Result-single unequal angle’s long leg connected to the gusset plate is showinghigher strength than equal angle, whose tensile strength Ft=561656 N

3.3-Two Angle as tension member:- Somewhere when load is more then to restrictthe stress in the tension member two members of same dimensions are used. Thetwo angle members are connected either side or only one side to the gusset plate.

3.3-1-Case Study 2:- ISA 150*150*15mm and ISA 200*100*15mm.

3.3-1.1- Equal angles either side connected with 20mm thick gusset plate means theplate is sandwiched between two angles.

Anet=(4278-43) 15= 3633 mm2

Ft= (3633)150 N

Ft=544950 N

3.3-1.2. Equal angles are one side to the 20 mm thick gusset plate without tackingrivet.

connected area=2(150-21.5-7.5) 15= 3630 mm2

outstanding area=2(150-7.5) 15=4275 mm2

K=0.72

Anet= 3630 +0.72(4275)=6708 mm2

Ft=6708(150)= 1006200 N


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Ft=1006200 N

3.3-1.3. Equal angles are one side to 20mm thick gusset plate with tacking rivet.

Connected area= 3630 mm2

outstanding area=4275 mm2

K=0.81

Anet= 3630 +0.81(4275)=7092.75 mm2

Ft= 7092.75( 150)=1063912.5 N

Ft=1063912.5 N

3.3-2.1. Unequal angles short leg is connected with 20mm thick gusset plate on itseither side

Anet=3633mm2

Ft= (3633) 150= 544950 N

Ft=544950 N

3.3-2.2. Unequal angles short leg is connected with 20mm thick gusset plate on itsone side without tacking rivet

Connected area= 2(100-21.5-7.5) 15= 2130 mm2

outstanding area= 2(200-7.5) 15= 5775 mm2

K=0.52

Anet= 2130 + 0.52(5775) =5133 mm2

Ft= 5133 (150)= 769950 N

Ft=769950 N

3.3-2.3. Unequal angles short leg is connected with 20mm thick gusset plate on itsone side with tacking rivet.

Connected area= 2130 mm2

outstanding area= 5775 mm2

K=0.65

Anet= 2130+0.65(5775)= 5883.75 mm2

Ft= 5883.75 (150) =882562.5 mm2

Ft=882562.5 N


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

3.3-3.1. Unequal angles long leg is connected with 20mm thick gusset plate on itseither side

Anet= 3633 mm2

Ft= 3633 (150)= 544950 N

Ft=544950 N

3.3-3.2. Unequal angles long leg is connected with 20mm thick gusset plate on itsone side without tacking rivet

Connected area=2(200-21.5-7.5) 15= 5130 mm2

outstanding area= 2(100-7.5) 15=2775 mm2

K=0.85

Anet= 5130 +0.85 (2775)= 7488.75 mm2

Ft= 7448.75 (150)= 1123312.5 N

Ft=1123312.5 N

3.3-3.3. Unequal angles long leg is connected with 20mm thick gusset plate on itsone side with tacking rivet

Connected area=2(200-21.5-7.5)15=5130 mm2

outstanding area=2(100-7.5)15=2775mm2

K=0.90

Anet= 5130+0.90(2775)=7627.5 mm2

Ft=7627.5 (150)=1144125 N

Ft=1144125N

3.4. Comparative table for tensile strength of two angles connected with 20mmthick gusset plate on its various positions

Result- Double unequal angles long leg connected with one side of gusset platewithout tacking rivet is giving higher strength in tension whose Ft=1144125N

(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

3.5. DiscontinuousComression member - The members are either single equalor un-equal and double equal single or unequal and their legs are connectedwith 20mm thick gusset plate on various conditions with ends rivet either singleriveted or double riveted with a length of 2000mm have been assumed andillustrated to get the result, for the theme of the paper.

3.5-1. Equal single member connected to the gusset plate with ends single riveted

rvv=29.2, l=2000mm, l/rvv =2000/29.2 =68.5

stress at l/rvv 68.5=113.5 N/mm2

Fc=4278(113.5)(0.8) =388442.4 N

Fc=388442.4 N

3.5-2. Unqual single angle any leg is connected with gusset plate with ends singleriveted

ryy=26.4, l=2000mm , l/ryy=2000/26.4 =75.75

stress at l/ryy75.75 =103.475 N/mm2

Fc= 4278(103.475)(0.8) =354132.8 N/mm2

Fc=354132.8 N

3.5-3:- Equal angle single with ends double riveted

rvv=29.2, l=0.85(2000)=1700mm, l/rvv =1700/29.2 =58.2

stress at l/rvv 58.2 =123.8 N/mm2

Fc= 4278(123.8)= 529616.4 N/mm2

FC=529616.4 N


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

3.5-4:- Unequal single angle any leg connected with ends double riveted

ryy=26.4, l=1700mm, l/ryy =1700/26.4 =64.4

stress at l/ryy 64.4 = 117.6N /mm2

Fc=117.6(4278)=503092 .8 N

Fc=503092.8 N

Comparative table for single compression member

Result=Equal angle single with ends double riveted is more strength full compressionmember than unequal angle, whose Fc=529616.4N

3.6. Discontinuous Compression member double equal and double unequalconnected with gusset plate under various positions may be there and they arehaving different strength. The higher resulting strength will show the goodvaluated strength steel angle section.

3.6-1-Equal angles either side of gusset plate with single riveted

l=2000mm, Ixx=2(8968000)=17936000mm4

Iyy=2(8968000) +2(4278)(52.6)2

=41608398.56 mm4

Imin=17936000mm4

rxx=45.8, l/rxx= 2000/45.8 =43.7

stress at l/rxx 43.7= 136.4 N/mm2

Fc=4278(136.4)(0.8)=466849.584 N

Fc=466849.584 N

3.6-2. Equal angles are one side of gusset plate with single riveted

Things will be same as in 3.6-1

Fc=466849.584 N

3.6-3-Equal angles either side to gusset plate, ends double riveted


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

l=0.85(2000)=1700mm, rxx=45.8, l/rxx=1700/45.8=37,

stress at l/rxx37 =141.8N/mm2

Fc=4278(141.8)=606620 N

Fc=606620 N

3.6-4. Equal angles one side to gusset plate, ends double riveted

This will be same as in 3.6-3

Fc=660620 N

3.6-5. Unequal angle long leg, connected either side to the gusset plate, ends singleriveted

Ixx=2(17500000)=35000000 mm4

Iyy=2(2981000) +2(4278)(32.2)2 =14833203 mm4

Imin.=14833203 mm4

rmin=41.63

l/rmin=2000/41.63 =48

stress al l/rmin48=133.4 N/mm2

Fc=2(4278)(133.4)=913096.32 N

Fc=913096.32N

3.6-6. Unequal angle long leg, connected either side to the gusset plate, ends -DOUBLERIVETED

l=1750mm, rmin=41.63

l/rmin =1750/41.63=40.83 or 40

stress at l/rmin 40=139 N/mm2

Fc=2(4278)(139)=1189284 N

Fc=1189284 N

3.6-7. Unequal angles short leg connected either side to gusset plate ends single riveted

lxx=2(2981000)=5962000 mm4

Iyy=2(17500000)+2(4278)(81.8)2=92250249.44 mm4

Imin=5962000mm4


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

rmin=26.4

l/rmin=2000/26.4=75.75

stressfor l/rmin 75.75=105.675 N/mm2

Fc=2(4278)(105.675)=904155.3N

Fc=904155.3 N

3.6-8. Unequal angles long leg connected one side to the gusset plate, ENDS SINGLERIVETED

The strength will be same as in 3.6-7

Fc=904155.3 N

3.6-9. Unequal angles long leg connected one side to the gusset plate Ends doubleriveted

l=1700 mm, rmin=26.4, l/rmin=1700/26.4=64.4

stress at l/rmin64.4=117.6N/mm2

Fc=2(4278)(117.6)=1006185 N

Fc=1006185N

3.6-10. Unequal angles short leg connected either side to the gusset plate ends doubleriveted

Fc=999600N

3.6-11. Unequal angles short leg one side to gusset plate ends single riveted

Ixx=35000000mm4

Iyy=1017782mm4

rmin=34.5, l/rmin=2000/34.5=58

stress at l/rmin 58=124N/mm2

Fc=2(4278)(124)=848160

Fc=848160 N

3.6-12. Unequal angles short leg one side of gusset plate, ends Double riveted

Fc=1132875 N

(PTO)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Result-Double unequal angle connected either side to the gusset plate with endsdouble riveted has been showing higher strength than equal or unequal angle in oneside to gusset plate.

Result and discussions:- The study reveals that the angles bearing same cross-sectional area of either equal or unequal angles, whether they are single or double,while using as tension member, unequal angles-long leg connected with gusset platewill show higher strength. Long leg connected one side to gusset plate with tackingrivet as tension member has shown highest strength than other conditions while usingdouble angles

So far the compression member is concerned, single equal angle has shown goodstrength with ends double riveted, than unequal angle. If double angles are used thenunequal angles long leg connection, either side to gusset plate, with ends double rivetinghas been showing the highest compressive strength than only side connection to gussetplate even equal angles.

Hence it is finally discussed with this paper and recommended to use single unequalangle with its long leg connected to gusset plate and using it as tension member ispreferable rather than equal angle rather than unequal short leg connected as constrain.Also if double angles are being used as tension member then unequal angles longleg connected to gusset plate to its one side with tacking rivet will be showing highesttensile strength than without tacking rivet. If constrain then equal angles one side to


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

gusset plate plus tacking rivet and then without tacking rivet may be used. Short legconnection is not recommended to use in structures.

As compression member single equal angle with ends double riveted is recom-mended to use in place of unequal angle. It is too recommended that if double anglesare being used as compression member than long leg connected either side to gussetplate is having highest strength rather than one side to gusset plate of long legconnected. Equal angles are not recommended to use as compression member.

Reference:-.M.K.Varshaney’s book design of steel & masonry structures.

SPECIAL CASES OF

PLANT PLANT PLANT PLANT PLANT AND MACHINERAND MACHINERAND MACHINERAND MACHINERAND MACHINERYYYYY VALUA VALUA VALUA VALUA VALUATIONTIONTIONTIONTION

&THOUGHTS ON PROFESSIONALTHOUGHTS ON PROFESSIONALTHOUGHTS ON PROFESSIONALTHOUGHTS ON PROFESSIONALTHOUGHTS ON PROFESSIONAL VALUA VALUA VALUA VALUA VALUATIONTIONTIONTIONTION

BY LATE DR. P.C. GUPTAB.Sc. Engg. (BHU), M.S. (Tax. Tech) MIT,

Ph. D. (Mech. Engg.). I.I.T. USA, A.S.M.E. (Life), M.I.E., F.I.V.

This is the 2nd book by the author on Valuation of Plant & Machinery.

The price of the above book is Rs. 375/- and by Registered post Rs. 400/- from the office of the Institution of Valuers, Plot No. 3, Parwana Road, Adjacentto Bal Bharti Public School, Pitampura, Delhi-110 034.

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

1. EXPERIENCE OF EMPANELMENT:

After retirement as Engineer-In-Chieffrom Irrigation Department of the A.P.State during May, 1993, written three booksfor DHV Consultants of Netherland during1993, worked with a consultancy firm atHyderabad, as a consultant for doingWorld Bank connected works during 1994to 1996 and trained about (8) batches ofin-service Engineers at the EngineeringStaff College of India (ESCI) Gachibowli,Hyderabad for preparation of operation &maintenance manuals for Medium & MajorIrrigation Projects and worked as guestfaculty member of the ESCI during 1996& 1997, did Hydrological investigation fortwo Cement factories & one paper factory,floated a society for doing irrigation con-sultancy works during 1997.

During 1988, after becoming a lifemember of the Institution of Valuers asFIV, got myself registered at Income TaxDepartment as a Valuer and applied tovarious Banks for empanelment as aValuer. Succeeded in empanelment in theAndhra Bank, Bhavana Co-Operative Bank,Deccan Co-Operative Bank, Vasavi Co-Operative Bank & Chaitenya Co-op Bank,Neta Co-Operative Bank at- Secunderabad

and at one of the Insurance Companiesat Hyderabad as loss assessor. I couldnot succeeded in my trials at SBI, SBH,Overseas Bank, Maharastra Bank, Syndi-cate Bank, LIC, Other Insurance Compa-nies, Allahabad Bank, & AP State Co-Operative Bank (APCOB). But withoutempanelment I gave Valuations for morethan a year to Allahabad Bank & APCOB.

2. HOW VALUATION INNINGS ENDEDIN THE FOLLOWING BANKS?

Chaitanya Bank: During one of the sum-mers, a owner of two plots, near FCI,Godowns, beyond Mallapur (V) in a largelayout approved by the Grama Panchayathhas shown main road facing two plots ofmore than 300Csq.yd each as against thesale deed a¢res of about, 350.0 sq.ydeach. According to the owner, the marketrate was more than Rs. 1,200/ per sq.yd.After his departure, my enquiry has re-vealed that the sale deed plots were about400m away from the main road and themarket rate was ranging between Rs. 175/to 225/- per sq.yd. When I had discussedwith the Bank Manager & the Chairmanabout the wrong plots shown to the valuerjand about the actual market rate, it wasnot relished by the Chairman. The result

A FEW TRUTHS & WHISPERSABOUT VALUER’S EXPERIENCES

—S.R. Rama MurthyB.E; CE(I), FIE; FICA; FIV

Engineer-in-Chief (Retd)Hyderabad (T.S.)

(F. 8009)

✍


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

was that they had stopped giving valuationsfor about 1-1/2 yrs, When a new Managerjoined the Bank, he had again givenvaluations for about a year and my inningsended when that Manager left the Bank.

Deccan Bank: It was a different story.Their Chief Manager referred Agriculturelands for valuation. I gave in writing thatI was not competent to give valuation foragriculture lands of their Vice-Chairman.The Manager requested orally and accom-panied me to the site for valuation. Aftera few months when I reminded the Man-ager for the fees, he expressed his inabilityto collect the amount from their Vice-Chairman and when the Vice-Chairmanhad threatened to terminate my empanel-ment, that paved the way for the end ofmy innings.

Netha Bank: After empanelment, valuationof an open plot of Begum Bazar belongingto a close relative of one of the Directorswas referred. The Managing Director hadasked me to handover the valuations tothe owner duly collecting the fees. Prob-ably as the owner was not happy with thevaluation amount and the fees, he did notturn up to collect the valuation. The Bankdid not entrust any more valuations.

Andhra Bank: I had contacted the BranchManager of a few Branches near myresidence at regular intervals, but couldnot succeed in getting valuations. A valu-ation of a plot at Mansoolabad (V) wasreferred by a friend of an employee of theAndhra Bank at Thorrur (V), WarangalDist. The employees son nor his friend

could show me the plot. After two daysof struggle, I could locate the layout andthe plot and gave its valuation. TheirThorrur Branch paid the fees as per theirscale by a cheque. Every year, their headoffice was asking for a performance reportin their proforma. Though I was submittinga nil report, there was no reaction fromthem. During 2006 when I was at USA,for more than six months, their HeadOffice at Hyderabad was restless aboutthe performance report. After my returnfrom USA, one day when their officerreminded me to send the report througha special messenger, I told him that I wasnot interested to send a nil report. Thanhe wanted me to apply for delisting myname which I did not oblige. With in twodays, by a speed post, a letter informingabout deleting my name from the panel; asrequested by me, was received. After aweek/or ten days, their KalwakurthyBranch, which was (80) km. away fromHyderabad, on Srisailam HYW, referredvaluation of a house near Santhosh Nagar,at Hyderabad. When I had informed theowner and the Branch Manager that Iceased to be their panel valuer, theywanted me to give valuation with an an-tedate. I told them that ethically it was notcorrect on my part to give valuation andthat was the end of my un-successfulinnings at Andhra Bank pitch.

Allahabad Bank: Ahead of the empanel-ment, the Officer in-charge of loans, atSanthosh Nagar Branch, started giving mevaluations. When ever I had asked forempanelment, he used to say “why do you


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

bother about it, when you are gettingvaluations”. I had stopped asking about it.When valuation stopped, I came to knowthat the officer was transferred toBangalore. One day when I got a tel-ephone message from him, I met theManager and the new Officer at the branch.The response was not encouraging andthat was the end of my innings at theAllahabad Bank.

Vasavi Bank: One of the Directors of theBank was a classmate & friend of my 2nd

son, who is an American Citizen. ThatDirector had taken my application andseen that I was empanelled. Through theMD of the Bank, he had sent a few casesfor my valuations. Enroute another valuerwas intercepting the clients and givingvaluations. Through one of such valuationsthat Director had noticed that the valuationreferred by him were not valuated by me.Until he revealed it to me, I was not awareabout such interceptions. Thereafter I hadgiven valuations for a few cases until itwas liquidated about 8 or 10 years back.

Thus I remain valuer for only oneBank, from 2006, which has four branchesat Hyderabad. Incidentally, that was theBank in which I had started my valuationcareer in 1998.3. WHISPERS ABOUT HALF A DOZENCASES:(i) A Commercial building with (G+4)floors situated on the main road fromGaddiannaram 'X' road on N.H.9 NearDilsikhnagar to Saroornagar:

The owners had offered only (G + 1)

floors as collateral security which werecovered by the OHMC sanction. As theywere fetching rents of Rs. 40.000/- for theGF and Rs. 30,000/- for the 1st floor, thevaluation was given for less than Rs.80.00 lakh on rent capitalisation methodduring Oct. 2010. Bank had sanctionedtwo loans of Rs. 20.0 lakh in the namesof the two owners. According to the Bank'snorms they were supposed to remit twoamounts in my account towards two loans.They had remitted only one amount andas the Bank does not furnish the list ofloans sanctioned, I was not aware aboutthe 2nd loan, until the end of the year 2011.

(ii) Valuation of an open plot of about870 sq.yd on Langer House to Gandipetmain road Nr. Narsingi (V):

During February, 2011 valuation of anun-even main road facing plot of about870.0 sq.yd was given for Rs. 130.0 lakh.Two loans of Rs. 30.0 lakh and Rs. 35.0Lakh were actually sanctioned in the namesof the wife and the husband, but valuationfees was given for Rs. 35.0 lakh loanalone. During November, 2011, I wasasked to give a revaluation for the sameplot as the owner wanted another loan ofRs. 25.00 lakh. When I told them that asper their practice, they could give the 2ndloan of Rs. 25.0 lakh chargeable to theoriginal valuation of Rs. 130.0 lakh ofFebruary, 2011, then they had revealedthat originally two loans were given, sothey wanted to verify whether the sameplot would permit them to sanction the 3rdloan. A revised valuation could be givenbased on the enquired market rate and


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

referring to the available data, for Rs.185.0 lakh. Based on the revised figure,an addl. loan of Rs. 25.0 Lakh was givenand for that they have paid fees. Thus theBank and the Loanee managed to avoidpayment of fees towards one of the firstloans of Rs. 30.0 Lakh.

(iii) Valuation of a house Nr. ShalivahanaNagar, DSNR on 26-05-2008:

Based on the valuation of Rs. 42.36lakh, a loan of Rs. 20.0 lakh as appliedwas sanctioned. The Bank should havepaid a fee of Rs. 4,000/- but they had paidonly Rs. 1,000/-. This had came to lightduring November, 2013, when the sameproperty had come for the latest valuation.

(iv) Two godowm Nr. Inner Ring Roadin Karmanghat (V) limits, behind aFunction Hall:

Valuation on 04-07-2009 was for Rs.40.90 lakh. The loan applied and sanc-tioned was stated to be Rs. 10.00 L. Afee of Rs. 2,000/- was remitted on 24-07-2009. When it had come for revaluationon 15-01-2014, it has come to my knowl-edge that the loan of Rs. 15.0 lakh wasactually sanctioned and released. The feesought to have been Rs. 3,000/-.

(v) A house for valuation on 07-07-2013at Mythrinagar Colony behind GlobalAware Hospital on IRR Nr.Bhairamulguda (V):

Based on the revaluation of Rs. 18.42lakh, a loan of Rs. 9.0 lakh was sanc-tioned. When the Dy. Manager of the Bankhad some objection, at my instance, the

M.D. of the Bank clarified to pay a feesof Rs. 1,800/-. Inspite of clarification duringSeptember, 2013, a fee of Rs. 1,200/- onlywas remitted.

(vi) Valuation of an open plot IIICherlapallv (V) residential layout during21-06-2011 :

Based on the valuation of Rs. 12.10lakh, an OD of Rs. 6.0 lakh was sanc-tioned though originally the loanee wasstated to have applied for Rs. 5.0 lakh. Afees of 1,250/- was paid based on the oldscale. The same property came for re-valuation on 18-07-2013 as the loaneewanted an additional O.D. of Rs. 5.0 lakh.After careful enquiries at site and near byreal estate, a valuation was given for Rs.20.16 lakh. So an addl. O.D. of Rs. 4.0Lakh could have been sanctioned, but anaddl. O.D. of only Rs. 2.0 lakh wassanctioned as in between they had alsoreleased another OD of Rs. 2.0 Lakh forwhich they should have paid an addl., feeof Rs. 800/-.

4. Remedial measures taken duringJanuary, 2014:

When I had brought the above discrep-ancies to the notice of the AssistantGeneral Manager of the Bank, he wantedme to give a list of an such cases alongwith the short payments and with a cut-off date so that he may take remedialmeasures to make the balance payments.While thanking him for such favourableaction, I requested him as under:(i) To furnish a list of loans sanctioned,

valuation wise or monitor the payment


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

of valuers fees at his level, so thatsuch short payments are avoided. Hehas agreed to furnish a list of theloans sanctioned, though hither to, itwas not the practice.

(ii) When I told him that I was not inter-ested in the payment of arrears ofshort payments, he had appreciatedmy gesture.

(iii) During 1st week of February, 2014

when I had requested for a copy ofthe loans sanctioned, he gave me thelist of loans sanctioned but asked meto note down the loans sanctionedinstead of giving me a copy of the list.Even this helps me in monitoring theremittance of the fees.

I have to wait and see how long thispractice continues.

“VALUATION PRACTICE OF IMMOVABLE PROPERTIES”(Revised & Enlarged Edition)

Written by

Shri C.H. Gopinatha Raoa prominent Valuer and

past President of the Institution of Valuers

The above book is available at Rs. 390/- and by Registered Post at Rs. 420/-(including packing and registered postage charges) from the office of theInstitution of Valuers, Plot No. 3, Parwana Road, Adjacent to Bal Bharti PublicSchool, Pitampura, Delhi - 110 034.

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Provisions and role of registered valuerunder Companies Act, 2013 have beenexplained as well as promises future.Wolds for the registers Valuers havebeen delineates.

It is the first time in the history of theIndian Company Law where the conceptof “Registered Valuers’ has been intro-duced by way of separate Chapter XVIIunder the Companies Act. 2013 and sec-tion 247 of the Act contains provisionsexclusively regarding registered valuers.

Notification for the effective date andthe relevant rules could not be notified bythe Central Government till now. However,the Ministry of Corporate Affairs havepublished draft Rules for the RegisteredValuer, these rules give a definite directionto the valuers and define clearly their rolesand responsibilities.

Requirement to include provisions forvaluer in the Companies Act

Globally there are Valuation bodiesregulating the Discipline of Valuation likeValuation Standards of American Instituteof CPAs (AICPA), American Society ofAppraisers (ASA).

Institute of Business Appraisers (IBA),National Association of Certified ValuationAnalysts (NACVA) and The Canadian

Institute of Chartered Business Valuers(CICBV). Whereas for so long, Valuationhas been debated in India as an Art orScience and substantial part of the litiga-tion in Mergers & Acquisitions (M&A)takes place on the issue of Valuation asit involves an element of subjectivity thatoften gets challenged. Further that thereare no standards for business valuationspecifically for unlisted and private com-panies so in many cases the Valuationlacks the uniformity and generally ac-cepted global Valuation practices.

In absence of any stringent course ofaction and Non Regulation under anyStatute is also leading to loose ends.Though a consensus is getting built amongstprofessional Valuers with regard to gener-ally accepted approaches, methods, andprocedures. nonetheless, numerous con-ceptual controversies still remain, evenamong the most prominent practitioners.Therefore, the introduction of concept ofRegistered Valuer in the Companies Act,2013 is a welcome. step in this directionas it is expected that this could now setthe Indian Valuation Standards leading totransparency and better governance.Impact of the Provisions

The concept of registered Valuer islikely to have huge impact on the Industry,

REGISTERED VALUER UNDER THE COMPANIES ACT,2013 OPPORTUNITIES VS RESPONSIBILITIES

—CS (Dr) D.K. JainPractising Company Secretary of Indore

✍


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Professionals, Shareholders and Govern-ment on the following grounds-

With the creation of personal liability onthe Valuer towards payment of dam-ages for the loss arising out of mis-leading or incorrect information. it ismost likely that the Valuation reportswould disclose a true, fair and com-plete view. Similarly, Inducement ofrepercussions relating to fraud leadingto imprisonment due to any intentionaldefault aimed to defraud the Companyor its members is also likely to inductmuch objectiveness in the valuationprocedure. -Registered Valuer-

Stakeholders confidence would largelyget boosted with the transparency andfairness which the system of valuationindicates to offer

Drain of Government revenue due toloopholes in valuations is also likely tobe regulated with this provision.

Meaning ofthe Registered Valuer

The Draft Rules defines ‘RegisteredValuer’ means a person registered as aValuer under Chapter XVII of the Act.

Who can act as a registered valuer?

As per Draft Rules, A person who isregistered as a Registered Valuer in pur-suance of Section 247 of the Act with theCentral Government and whose nameappears in the register of RegisteredValuers maintained by the Central Govern-ment or any authority, institution or agency,as may be notified by the Central Govern-ment only can act as a registered valuer.

The following persons shall be eligible toapply for being registered as a valuer:

(a) a chartered accountant. companysecretary or cost accountant who isin whole-time practice, or retiredmember of Indian Corporate LawService or any person holding equiva-lent Indian or foreign qualification asthe Ministry of Corporate Affairs mayrecognise by an order; Provided thatsuch foreign qualification acquired byIndian citizen.

(b) a Merchant Banker registered with theSEBI, and who has in his employmenterson(s) having qualifications pre-scribed under (a) above to carry outvaluation by such qualified persons;

(c) memberofthe Institute of Engineersand who is in whole- time practice;

(d) member of the Institute of Architectsand who is in whole-time practice;

(e) a person or entity possessing neces-sary competence and qualification asmay be otified by the Central Govern-ment from time to time.

Experience needs to become Regis-tered Valuer under the Companies Act

To have quality service the Draft RulesProvided that persons referred to in (a).(c) and (d) and qualified person in (b)above shall have not less than 5 yearscontinuous experience after acquiringmembership of respective institutions.

Provided further that in the case ofmerchant banker the valuation report shallbe signed by the qualified person.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

A person shall be deemed "to be inwhole-time practice", when individually orin partnership or in limited liability partner-ship or in merchant banker with otherpersons in practice who are members ofother professional bodies, he, in consid-eration of remuneration received or to bereceived:

(i) engages himself in the practice ofvaluation; or

(ii) offers to perform or performs servicesinvolving valuation of any-assets withthe object of arriving at financial valueof the asset being valued; or

(iii) renders professional services or-as-sistance in or about matters of principleor detail relating to valuation.

Valuer Needs to be Registered

The valuer must register with the CentralGovernment or institution or agency noti-fied by the Central Government by filingan application for registration as a valuer.

Opportunity for valuation by a regis-tered valuer under the Act

Any property. stocks. shares. deben-tures, securities or goodwill or any otherassets or net worth of a company or itsliabilities which requires valuation underthe provision of the Companies Act, 2013shall be valued by a registered valuer.

In the Act, specific mention aboutvaluation by registered valuer has beenmade in the following Sections:

(a) Section 62(1)©: Further issue of sharecapital. other than Rights Issue and

Issue under a Scheme of EmployeeStock Option;

(b) Section 192(2): - Non cash transac-tion involving directors;

(c) Section 230(2)(c)(v): For ValuingShares. Property and Assets of thecompany under a Scheme of Corpo-rate Debt Restructuring

(d) Section 230(3) and 232(2)(d): ForValuation including Share swap ratiounder a Scheme of Compromise/Arrangement, a copy of ValuationReport by Expert. if any shall beaccompanied

(e) Section 232(3)(h): Where under aScheme of Compromise/Arrangementthe transferor company is a listedcompany and the transferee com-pany is an unlisted company, for exitopportunity to the shareholders oftransferor company, valuation maybe required to be made by the Tri-bunal;

(f) Section 236(2): For Valuing EquityShares held by Minority Sharehold-ers;

(g) Section 260 (2)©: For preparing Valu-ation report in respect of Shares andAssets to arrive at the Reserve Priceor Lease rent or Share ExchangeRatio for Company Administrator;

(h) Section 281 (1 )(a): For ValuingAssets for submission of report byCompany Liquidator;

(i) Section 305(2)(d): For report on the


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Assets of the company for prepara-tion of declaration of solvency undervoluntary winding up;

(j) Section 319(3)(b): For Valuing theinterest of any dissenting member ofthe transferor company who did notvote in favour of the special resolu-tion, as may be required by theCompany Liquidator; and

(k) Section 325(1)(b): For valuation ofannuities and future and contingentliabilities in winding up of insolventcompany Registered Valuers.

The Methods for valuation and formatof valuation Report is standarised

A registered valuer shall make a valu-ation of any asset as on valuation date,in accordance with anyone or more of thefollowing methods:

(a) Net asset value method

(b) Market Price method:

(c) Yield method/Profit Earning CapacityValue (PECV):

(d) Discounted Cash Flow Method (DCF):

(e) Comparable Companies MultiplesMethodology (CCM):

(f) Comparable Transaction MultiplesMethod (CTM)

(g) Price of Recent Investment method(PORI)

(h) Sum of the parts valuation (SOTP)

(i) Liquidation value

j) Weighted Average Method

(k) Any other method accepted or notifiedby the RBI, SEBI or Income TaxAuthorities.

(I) Any other method(s) that the valuermay deem fit to adopt in the givencircumstances of the case, providedthat adequate justification for use ofsuch method(s) must be included inthe report.

The Registered Valuer shall makevaluation of any asset as on the, Valuationdate and in accordance with applicablestandards, if any stipulated for this pur-pose. To have uniformity the contents ofValuation report shall be in the prescribedForm under the Valuation Rules.

Duties and Responsibilities of Regis-tered Valuer

Section 247(2) has prescribed thefollowing duties of the valuer;

(a) make an impartial, true and fair valu-ation of any assets which may berequired to be valued;

(b) exercise due diligence while perform-ing the functions as valuer;

(c) make the valuation in accordance withsuch rules as may be prescribed; and

(d) not undertake valuation of any assetsin which he has a direct or indirectinterest or becomes so interested atany time during or after the valuationof assets.

Where any person who is registered asa valuer under section 247 or who hasmade an application for registration as a


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

valuer under that section is, at any timethereafter,-

(a) sentenced to a term of imprisonmentfor any offence; or

(b) found guilty of misconduct in his pro-fessional capacity by any associationor institute or other body of which heis a member or with which he isregistered;

he shall immediately after such convictionor finding, intimate the particulars thereofto the Central Government, institution oragency with which he is registered as avaluer and cease to act as valuer unlesspermitted by the Central Govt. institute oragency with which he is registered as avaluer, or the order imposing penalty/sentence has been stayed by competentauthority.

In case valuer is found guilty of pro-fessional misconduct or otherwise by theInstitute of which he is a member or byNFRA or where the SEBI removed theregistration of the merchant banker. suchvaluer shall cease to be the valuer auto-matically and their name shall be removedfrom the register of valuer unless suchorder has been stayed by the CompetentAuthority.

Penal Provisions (Section 247(3) & (4)):

(1) If a valuer contravenes the provisionsof section 247 or the rules madethereunder. he shall be punishablewith fine which shall not be less thanRs. 25.000/- but which may extend toRs. 1.00.000/-.

(2) If the valuer has contravened provi-sions with the intention to defraud thecompany or its members. he shall bepunishable with imprisonment for aterm which may extend to 1 year andwith fine which shall not be less thanRs. 1.00.000/- but which may extendto Rs. 5.00.000/-.

Where a valuer has been convicted asabove. he shall be liable to:

(i) refund the remuneration received byhim to the company; and

(ii) pay for damages to the company orto any other person for loss arising outof incorrect or misleading statementsof particulars made in his report.

Analysis of the Act! Draft Rules

Professional opportunities likely toemerge with the increase in the numberof valuation requirements as per the newconcept of Registered Valuer.

The system of valuation will offer moretransparency and fairness which will inturn uplift the shareholders confidence.

The Appointment of the Valuer by theaudit committee or the Board of Directorsfor all the requirements could be timeconsuming and may delay the valuationexercise.

The management of the companyshould also be empowered to appointvaluers where the valuation requirement isfor annual updation of value or for internalevaluation purpose or such other cases.

The law states that the Valuer should


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

exercise due diligence while performingthe valuation. "Due Diligence" should bemore specifically defined in terms of whatadditional steps a valuer needs to follow.Due diligence is a very broad term andmight imply various types of due diligencese.g. tax. financial or commercial whichneed specific expertise which might not beavailable with the valuer.

Other finance professionals such asperson holding post- graduate/ mastersdegree/ diploma in business management(MBA) or finance from India or equivalentforeign qualification. Chartered financialanalyst (CFA) from India or equivalentforeign qualification or consulting firmsproviding financial advisory services shouldbe included in the definition of a RegisteredValuer.

Conclusion

In view of above. it may be concludedthat though the overall move for Regulatingthe Valuation as a Law is in right direction.'however it remains to be seen how theRules governing such Valuations areframed as it has been observed thatdifferent regulators in India (RBI. IncomeTax. SEBI. etc) have prescribed differentand in some cases conflicting valuationmethodologies to be followed creatingpractical difficulties. It is thereby sug-gested that the Rules for. Registered Valuershould specify the manner of Valuationunder different circumstances which shouldbe rather be left open to the Valuerto beapplied on a case to case basis.

“DISPARITIES AND DISPUTES IN VALUATION OF LANDS”

(With 100 case - laws)

Written by

Shri C.H. Gopinatha Raoa prominent Valuer and

past President of the Institution of Valuers

The above book is available for sale at Rs. 750/- and by Registered Post atRs. 800/- (including packing and registered postage charges) from the office ofthe Institution of Valuers, Plot No. 3, Parwana Road, Adjacent to Bal Bharti School,Pitampura, Delhi - 110 034.

IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Capitalization Rate unwound, valuationsmade easier by the single componentleading to proper initial assessment.

A doctor, professional of human bodycan tell a lot by knowing a pulse at pointin time. Probably, Pulse is the decisivefactor to the treatment he intends to ad-minister. Does real estate also has apulse? Does this pulse communicate tous? If yes then what does it communicate?Let's see:

Capitalization rate by far is the mostneglected figure. It has to be, don't you seewe are more focused to arrive at marketvaluation for sale or lease. Probable theneed for decision maker is market valu-ation for sale or lease and nothing beyond.let's put aside our business of sale orlease valuation for few minutes and con-centrate on Capitalization Rate whichblends Sale Valuation and lease Valuationinto a single figure.

For the purpose of study I have takenDelhi - NCR region. 1st region is Old Delhidominated by data points in and aroundKarol Bagh, 2nd region is South Delhidominated by data points in and aroundVasantVihar, Panchsheel Enclave, SDAand 3rd region is Gurgaon dominate bydata point in and around high rise modern

condominium. Capitalization Rate for thesethree regions differ for Residential andCommercial properties. Let's converge toresidential properties and then we willfocus on commercial properties.

Residential Capitalization rate in Re-gion-1 is around 1.80%, in Region-2 isaround 2.00% and for Region-3 is 4.00%.Each region has its unique inherent char-acteristics in terms of Buildings. Road,Social - Civic Amenities and Gentry ofpeople. Region - 1 is dominated by OldBuildings, Congested Roads. Cycle Rick-shaw, Commercial - Residential Mix, Homefactories, crippling infrastructure, noise,pollution levels, high population density,un-authorized construction. On the otherhand, Region - 2 is dominated by newbuildings, wide roads, open gardens, wellplanned development, demarcation of com-mercial and residential settlements, nofactories. good infrastructures, low noiseI pollutions levels, comparatively low den-sity, construction as per law. Region- 3,has still newer buildings, poor road infra-structure, well planned commercial I resi-dential mix, good social - civic amenitiesand dominance of service class popula-tion.

If we were to correlate physical char-acteristic of each region with capitalization

CAPITAL RATE, IS IT PULSE OF REAL ESTATE?—Sachin Garg

(Head Authority Services)GAA

B.Tech, M.Vl (Real Estate)M. Val (Plant & Machinery)

✍


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

rate, then let's infer what CapitalizationRate has to say: Capitalization Rate isless than 2.00 % where buildings are old,roads are congested and infrastructurehas crippled. Rentals are low becausemiddle I upper middle class prefers tomove out to better well planned regions.On the other hand capital values are highdue to business and home factories, prox-imity to whole sale markets, proximity toRailway Stations. Low rental and highcapital values push the capitalization rateto less than 2.00%. Capitalization rate inRegion - 2 is 200% due to high compara-tive rentals and high capital values. levelof rental values and capital values isattributed to well planned development,congestion free infrastructure, well devel-oped social infrastructure and quality life,preferred by middle I upper middle classwho can afford.

Capitalization rate in Region - 3 is4.00% due to very high rentals and lowcomparative capital values. level of rentalvalues and capital values is attributed towell planned development, congestion freemodern infrastructure, well developedsocial infrastructure and good quality life.Apart from mentioned factors primary rea-son for high capitalization is moving popu-lation of educated professionals who can-not afford to buy and have no option butto be on rent. Demand for rented accom-modation pushes the capitalization rate.

To summarize part of city that is old,saturated in area with decade, dilapidatedstructures will show low capitalization rateas compared to new parts which is soughtafter due to modern well planned urbandevelopment. Whichever part of the cityhas moving population will have highest


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~766 Indian Valuer / June, 2015

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Indian Valuer / June, 2015 767

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

ToEditorIndian ValuerNew Delhi

Valuers – Beware !❏ All that glitters are not Gold

❏ Prevention is better than Cure

❏ Experience is the best teacher

These proverbs will be more relevant and more appropriate also in the field ofvaluation of properties.

While valuation of properties in and around Chennai, the valuers shall take adequateprecautions to assess the nature of various areas and zones in which the propertiesare located. Each area / zone is governed by separate development control rules ofthe local bodies. Valuers shall not be carried away simply by the magnitude of anyproperty due to its location in a primary arterial road in the city with considerable landvalue.

Irrespective of the positioning of these properties, magnitude, their location the realvalue of the properties depends on its marketablility. Marketablility in turn depends onthe development control regulations of the local body. These control and regulate rulesand stipulate guidelines depending on the road width, corresponding setbacks permis-sible and the permissible plot coverage.

A plot at the junction of number of arterial roads in the city will have restraintsin set backs, plot coverage based on the road width. Particularly, when the size ofthe plot is not regular the plot coverage permissible will still be reduced, in practice.Hence the plot detailed above will have a lesser marketability though it is supposedto be located in the heart of the city.

PLOTS IN ACQUIFER RECHARGE AREAS:

There are certain areas in the city earmarked as acquifer recharge areas andaccordingly the development control rules permit only lesser FSI in these areas whencompared to areas outside these zones. Though these plots are in prime localitieseasily accessible by arterial roads with high land value, will still have lesser developmentoptions permissible with reduced FSI as per rules.

VIEWS OF MEMBERS


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

ARCHAEOLOGICAL INFLUENCED AREAS

There are certain areas in and around Chennai city where there are restrictionsin development due to archaeological building influences in those areas viz. Mahabalipuram,Pallavaram, certain areas near Red Hills / Puzhal. These will have an influence onthe development and marketability of the property irrespective of their location and highland value nearby.

PROPERTIES IN St. THOMAS MOUNT CANTONMENT AREAS

St. Thomas Mount Cantonment Board has formulated separate rules for developmentin their areas due to nearness to Chennai airport and consequent restriction in heightof building in these areas. The permissible FSI is also less according to their rulesthough the locality is very close to the heart of the city. Valuer cannot apply FSI tothis area based on permissible FSI to other areas in Chennai City.

BASEMENT AREAS WITH NON FSI

In buildings where construction of basement is permitted and if the basement isentirely a non – FSI area, as it is common for all occupants of the building, suchbasement areas are not be sold separately. This aspect is to be considered carefullyby the valuers.

GENERAL

It is stressd here that the duty of the valuer does not end up only with inspection,survey, taking photographs, collection of data but also is to carefully go through thedevelopemnt control rules of the respective areas to assess the marketability at thefirst instance before proceeding with the valuation of properties irrespective of theimportance of the areas due to location and value of land.

Unless the valuer is equipped with sufficient knowledge of DC rules of various localbodies / regions he will not be able to render a correct valuation. Hence his complianceof these rules in his valuation is essential to arrive at the marketability of the properties.Any mistake committed on the part of the valuer either inadvertantly or due to notbeing aware of these rules, will not only bring in loss to the public but also will damagehis reputation considerably.

Hence valuers beware and render a correct valuation.—G. Ramasubramanian

BE, MIE, FIVChennai

(F. 4970)


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

To,Editor,Indian ValuerNew Delhi

Refer to article “ Vastu Shastra And Valuation” by Prof. (Dr.) S.V. Deodhar appearedin March-2015 issue. He has mentioned that “Vastu shastra should not play any rolein the value”. He also says that “ one can see that there is no considerable differecein planning of residential buildings”. He has given figures which has in his words “showsa house matches both the principles that is aspect consideration and vastu principle”& concludes that Vastushastra does not affect the market value.

About a decade above I recollect that there were several articles published on Vastushastra in our monthly magazine. I also recollect that most of the Authors wrote thatplanning as per Vastu shastra has a positive effect on value of property. It is amusingthat the present day Vastushatries has admitted that Vastu shastra does not affectthe market value. Our magazine publishes technical & scientific paper which are reallyhelpful. However I fail to understand that if the conclusions are that there is no valueaddition to the assets then why such articles should appear which only occupy previouspages & are far of from the art & science of Valuation ? Almost all Vastushatriesprivately admit that all the principles of Vastu shatra can not be applied in totality. Multidwelling apartments are classic examples of this kind. Then the importance of vastuprinciples, partly applied further, strengthens the findings of Mr.Deodhar ,i.e. do notadd to the value. I congratulate Mr. Deodhar for his open mindness & bold statements.

—Ar. D.L. NawareB.Arch, FIV

Nagpur (M.S.)(F-1093)

OBITUARY

The Institution of Valuers express their profound sorrow on the saddemise of Shri L. Nagaraj, F-11412, resident of ‘Parijat’, 49/1, K.R. Road, (Nr. ReservoirStreet), Basavanagudi, Bengaluru - 560 004 (Karnataka), who left for his heavenly abode.He was an eminent valuer and Fellow life member of this Institution.



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

INSTITUTION OF VALUERSPlot No. – 3, Parwana Road, Adjacent to Bal Bharti Public School,

Pitampura, Delhi–110034Election Notice for Council

For the years 2016, 2017 & 2018As per Bye-Laws of the Institution of Valuers duly amended, effective and enforceable w.e.f

11/04/2015, the council for the years 2016, 2017 & 2018 shall be formed through election.The Vacancies to be filled up are mentioned below:

Designation of Posts No. of Vacancy / iesPresident : 1 (One)Vice-PresidentVice-President (from NCR Delhi) : 1 (One)1 (One)Honorary General Secretary (from NCR Delhi) : 1 (One)Honorary Treasurer (from NCR Delhi) : 1 (One)Member (from NCR Delhi) : 2 (Two)Member : 11 (Eleven)

The schedule of programme for the proposed election is given below:❍ Last date of receiving nomination : 15.07.2015 (by 1600 hours)❍ Date of uploading of valid nominations : 22.07.2015❍ Last date of withdrawal of nomination : 31.07.2015 (by 1600 hours)❍ Last date of receiving marked ballot paper

by ordinary post duly stamped : 02.11.2015 (by 1600 hours)❍ Counting of Ballot Papers : 06.11.2015 (from 1100 hours)

❐ As per Bye-laws, only life corporate members can contest election for Office-bearers andmembership of the Council of Institution of Valuers, for the years 2016, 2017 & 2018.

❐ One corporate member shall be eligible to nominate one Life Corporate Member for onepost only.

❐ One corporate member shall be eligible to contest for one post only.❐ Corporate members of the institution, who are in arrears of subscription upto 31.03.2015,

will not be eligible to nominate any Life Member for the election.❐ Licentiate member is neither eligible to contest election for any post nor can vote to elect

Office-bearers and Council Members.❐ Corporate Member who is a member of the Council of any other organization /Institution

/body of Valuers in India running parallel activities to Institution of Valuers or holdingthe post of office bearer of any branch of such organization /Institution /body of Valuersin India, shall not be eligible to contest in the Council.

❐ Members retiring from the Council shall be eligible for re-election.❐ Nomination should be submitted as per the enclosed proforma and send to “The Convener,

Board of Scrutineers for conducting the Election for the Council for the years 2016, 2017& 2018”, Plot No.–3, Parwana Road, Adjacent to Bal Bharti Public School, Pitampura, Delhi–110034 by ordinary post/Courier.

❐ Any error, illegibility, overwriting, ambiguity, absence of fact etc. in the nomination formmay lead to rejection of the nomination.

❐ In case of any dispute the decision of the Board of Scrutineers shall be final and binding.

ConvenerBoard of Scrutineers for conducting

Election for Council for the years 2016, 2017 & 2018


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

NOMINATION FORMTo,The Convener,Board of Scrutineers for conductingElection for Council for the years 2016, 2017 & 2018,Plot No. 3, Adjacent to Bal Bharti Public School,Parwana Road, Pitampura, Delhi–110 034

Election of the members and office bearers of the Councilof Institution of Valuers, for the years 2016, 2017 & 2018

I…........................................................................of…………………………………………………………… theundersigned member of the Institution intend to propose the name of the following member who isqualified in accordance with the Bye-Laws of the Institution of Valuers for election as Member / Officebearer of the Council and attach hereto a consent cum declaration in writing from the nominee ofhis / her willingness to serve as office bearer / Member of the Council.I set my hands this………………. Day of …………………………… 2015

Proposer Member’s Signature……….……………………………………

Proposer Member’s Name in BlockLetter…………………………………………….

Proposer Member’s Membership No. withGrade………………………………………

Particulars of the Nominee:Name…………………………………………………………........................................................Address…………………………………………………………………………….........................Membership Number with Grade……………………………………………………………..Nominated for President / Vice President / Vice President (NCR) / Honorary General Secretary/ HonoraryTreasurer / Member / Member (NCR) of the Council (Strike out whichever is not applicable)

Consent of the Member who is willing to seek election asOffice-bearer / Member of Council for the Years 2016, 2017 & 2018

To,The Convener,Board of Scrutineers for conductingElection for Council for the years 2016, 2017 & 2018,Plot No. 3, Adjacent to Bal Bharti Public School,Parwana Road, Pitampura, Delhi – 110 034I hereby give my consent to stand for election as President / Vice President / Vice President (NCR)/ Honorary General Secretary / Honorary Treasurer / Member / Member (NCR) of the Council of theInstitution of Valuers for the years 2016, 2017 & 2018 and to serve in the Council of Institution ofValuers, if elected. I also hereby solemnly declare and agree that in the event of my election, I willconform to the Memorandum of Association, Bye-laws and Code of Conduct of the Institution of Valuersas now in force or as hereafter altered, amended or enlarged from time to time and shall always makemy best efforts to work for the welfare and progress of the Institution. I hereby undertake not to doanything against the policy and interest of the Institution. I shall attend the Council Meetings of theInstitution regularly at my own cost. I further declare that I am not a member of the Council of anyother organization /Institution /body of Valuers in India running parallel activities to Institution of Valuersor holding the post of office bearer of any branch of such organization /Institution /body of Valuersin India. Any violation of my above consent and declaration shall lead to cancellation of my candidature/ my council membership (if elected) at any point of time.

Signed this………………...... Day of ……………… 2015Signature………………………

Full Name in Block Letter………………………………… Membership No. with Grade …………………Qualification (in Brief)……………………….......................E-mail ………………………………………………..Mobile/Phone No. ……………………………………Full Address…………………………………………………


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

various activities held by Vadodara Branch of Institution of Valuers like monthly meetingsand educational programs. Shri Mihir Parikh, Secretary of the Institution of Valuers,Vadodara Branch, welcomed the speakers on to the Dais and gave brief introductionof speakers. The seminar was initiated after Saraswati Vandana & lighting the lamp.65 nos. members made registration to attend the Seminar from All over Central Gujarat.

Speaker Mr. Rashesh Shah, advocate has answered various questions asked bythe members pertaining to the legal aspects of valuations of immovable properties e.g.joint ownership, whether a common plot of the society (layout plan) can be sold or

NEWS AND NOTES

Report of Annual Seminar (CEP-8)The Institution of Valuers,

Vadodara Branch on08.11.2014 conducted a oneday seminar on the subject“Legality related to ValuationProfession” at Hotel Tulsi,Pratapgunj, Vadodara. It waspresided by Shri Hitesh Shah,Chairman, Institution of Valu-ers, Vadodara Branch. Hewelcomed the speakers andmembers to the seminar andgave brief description of the

Lighting the Lamp

Welcome Speech by Chairman

not. Even if all the membersof the society are agree andmaking a resolution for sellingthe common plot, it cannot besold. Ad. Rashesh Shah an-swered all the questions tothe satisfaction of the attend-ing members of the Seminar.The session was followed bygroup discussions on thesame questions.

Next speaker Mr. MukeshB. Thakkar, Techno-legal con-


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

the same. The session was followed by group discussions on the same questions.

There was a lunch break in between.

Next speaker Mr. Alpesh Majmudar, Town Development Officer, Vadodara MahanagarSeva Sadan, Vadodara, gave a very good speech on the ‘Development Plan’ ofVadodara & future scenario of Vadodara on implementation of Development plan. Healso gave good information on prevailing GDCR-2006 (General Development ControlRegulation-2006) effective from 18.01.2012. He also replied to the questions regardingunauthorized construction & its regularization by payment of impact fees. He alsodiscussed about 40% of land to be deducted from the total area of land for whichdevelopment permission is sought by the owner.

Guest Speaker honored by Chairman

sultant, member of Institutionof Valuers, Vadodara, an-swered various questions ofthe attending members. Thequestions were pertaining tosuper built up area, which areais to be considered if extent ofarea differs among the ap-proved plan, area mentioned intitle deed and extent of area asper physical measurement.After the question answersthere was group discussion on

Audience

Other lecture was followedby interesting interactive ses-sion where the members ac-tively participated and raiseddifferent questions and weresolved by the speakers. CEPParticipation Certificate givento all delegates.

The Seminar was con-cluded with vote of thanksproposed by Mr. HarishTahilramani, member of Insti-tution of Valuers, VadodaraBranch.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

INSTITUTION OF VALUERS, UTTAR PRADESH BRANCH

The UP Branch Lucknow organised Seminar on “All Types of Assets” on 22ndFeb. 2015 at Hotel Taj Residency, Lucknow. The Seminar was attended by a largenumbers of Valuers and delegates, not only from Lucknow but also from Kanpur,Faizabad, Lakhimpur Kheri, Sahajanpur, Raebareli as well . In addition Council membersfrom Chennai Kolkata and Hyderabad were also present to grace the occasion .Onthis occasion the Chief Guest was Prof. Thaper, Ex-Principal of the GovernmentCollege of Architecture, Lucknow. After lighting the Lamp to invoke the blessingsof God for the success of the event. Er. Khazan Chandra , Chairman of UP Branchof the Institution of Valuers welcomed all the guests members and delegates. Thereafter Er. A N Dubey, Secretary of the UP Branch of the Institution of Valuers gavea brief information about the UP Branch. After that the audience were addressed bythe Guests of Honors and the Chief Guest .The Chief Guest expressed the happinessthat the Valuers are doing a very good work in Lucknow. The Council members,Sarvashri I. Rama Rao, RS Baabu and Sandip Kumar Deb shared their immenselyvaluable experiences with the audience by reading their articles and giving innumerableexamples They cautioned the Valuers’ fraternity to take all possible care while doingthe valuation of lands with regard to their title and identification as this would help mitigatethe incidences the bad loans and NPA cases. The momentos were presented to theChief Guest and guest of honors.

After the tea break technical session was started. During the technical sessions15 articles were presented with lunch break in between.

First article was from Col. (Retd.) SR Prasad on ‘Development of Lucknow branchof the Institution of Valuers, since the year 1992 till today and how it raised its statusfrom a midget to a gigantic stature and its owning own office premises .

Second article was presented by Er. Khazan Chandra, Chairman of the UP branchon ‘Capital Gain‘. In this article the author elaborates the concept of Capital gain ,howto calculate it, Investment amount, the situation when the amount of sale considerationis less than the Stamp Value and supported the above with a Case Study.

Third article was presented by Er. A L Kalra on ‘Valuation of First Floor residence’of a two storied house. The author has enumerated the precautions to be taken atthe time of inspection so that a realistic value could be worked out . He has givena Case Study also.

Fourth article was presented by Er. M K Goel which dealt with the Valuationof a Commercial property constructed in different years. In this the author opines thatComposite Rate Method of Valuation gives a higher value and it should be verified


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

with the value obtained by adopting Land and Building method. He has given a CaseStudy to substantiate his contention.

Fifth article was on Valuation of a residential Building by Er. A N Dubey. Theauthor has discussed the valuation of the property for securing a Collateral Securityfrom a bank. He has given an example of the Valuation of a three storied building.

Sixth article was presented by Er. V P Nigam who has given a Case Study ofworking out the Construction Cost of a building required for Income Tax Department,by adopting Plinth Area Rates of UP;PWD instead of that of CPWD in view of variousjudicial pronouncements that there is no appreciable difference between the Plinth AreaRates of State PWD and of CPWD.

Seventh article was on Valuation of a Cold Storage and an Ice Factory byCol.(Retd.) SR Prasad taking into account practically all the Civil Engineeringcomponents which go in for making a Cold Storage.

Eighth article was presented by Er. Khazan Chandra which was on working outthe Cost of Construction of a building by adopting CPWD Plinth Area Rates. The authorhas assessed the investment cost of a building for Income Tax Department in a CaseStudy by taking into account all the values of each components of the building.

Ninth article was presented by Er A L Kalra was titled as ‘Compendium on TechnicalInformation on Lucknow Metro Rail .

Tenth article was presented by Er. A N Dubey, Secretary of UP Branch it dealtwith ‘Calculating the Property Tax\. In the article the author has outlined the,Methodology of working out the property Tax. The example

Was also given by him

Eleventh article was from Architect Kamal Roy, Kanpur on ‘Foreign AccountCompliance Act’ USA . The author, in his article has said that the Government of USAhas recently introduced ‘Foreign Account Tax Compliance Act’ and included in ‘InternalRevenue Service’, to arrest the menace of Tax Avoidance and subsequent siphon ofRevenue. He has dwelt on various provisions of the Act.

Twelfth article was on ‘valuation of Used Cars’ at a glance by Er. PrabhatSrivastava . The author has valued different brands of used cars like Cheverolet,Ford, Honda, Hyundai, land Rover, Mahindra , Tata ,Toyota, Maruti ,Volkswagon andpresented it in a Tabular form.

Thirteenth article was on ‘Concept of Valuation on Plants and Machinery’ writtenby Er. S K Ahuja and E.r Kaushak Acharya. The authors in this article have givenan insight into the concept of valuation of Plant and Machinery including the purpose


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

of Valuation, like to insurance, for Financial aspects, for disposal etc. They have alsogiven various international methodologies.

Fourteenth article was presented by Er. Rakesh Kapoor which was on’ valuationof a Factory manufacturing PVC pipes. This is an NPA case. The valuation wasdone by adopting ‘Land and Building Method’.

Fifteenth article was presented by Er. MK Goel which dealt with the chronologicalrise of price of gold and Silver starting from the year 1925 till March end of year 2014.He has also given the value of US Dollar in terms of Rupees from the year1925to the period August 2013.

The Seminar ended with the vote of Thanks by the Secretary, Er. AN Dubey.

Five photographs (on three sheets) of the seminar are enclosed for record. Thecopies of the souvenir has already been sent to head office as well as to the allthe executive members of the council.

INSTITUTION OF VALUERS, VIJAYAWADA BRANCH

Institution of Valuers, Vijayawaqda Branch conducted monthyly Technical meetingon 22-02-2015 at 10.. a.m. at our own office permises at Falt No. 7 & 8 Sravya Towers,Gayatri Nagar, Polyclinic Road, Vijayawada, Snacks and Tea served to the membersattended the meeting.

On the request of our Fellow Valuers this month we had discussed on the Topic:SBI new format of Valuation Report".

Our Valuers are having doubts regarding the SBI new format of Valuation. So oursenior Valuers discussed on the following points with the Bank Officials also.

Implementation of Format of Valuation Report – Annexure-II

The formats for preparation of valuation reports were revised for the immediateimplementation by panel valuers. It may not be difficult to implement theAnnexure-I.

However in case of Annexure-II, we the valuers are of the opinion that it is difficultto implement it in totality since it contains many items that are not falling within thescope of valuers. (for example legal points.)

We would like to cite the following points from the annexure-II for your perusaland consideration.

Item : 3 , (a) Transferability of Developmental rights - It is a question of right oftransfer, it involves a question of law.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Item : 4 Document details & Legal Aspects of the property.

The Legal Aspects are not within the scope of the Valuers

For example the following can be examined.

Item : 4, (c) Restriction on transfer of Lease hold -

This can be commented only when the owner submits a writtenstatement as to the availability or otherwise the document of lease. Nooral statement can be considered. However it includes the right oftransfer, it is a legal point.

Item : 4,(a)(ii) TIR of the Property

Item : 4 (p) Qualification in TIR / Mitigation suggested if any

In most of the cases the TIR & Valuation Report are preparedsimultaneously due to urgency. It can be commented only when TIRis provided to Valuer along with other documents. However both theabove points are legal points.

Item : 4 (h) Comment on transferability of property ownership.

Since it involves the right of transferability, It is a legal point.

Item : 4 (i) Comment on existing mortagages / charges / encumbrances on theproperty if any.

It can better be commented by legal expert.

Item : 4 (j) Comment on whether the owners of the property have issued anyguarantee (personal or corporate) as the case may be.

It is difficult to ensure the owner is revealing the truth unless it is givenin writing in the way advised by the legal expert.

Item : 4 (m) Whether the property is SARFAESI Compliant.

It involves the interpretation of SARFAESI Act 2002, which is a legalpoint.

In addition to the above Legal points the information asked in Annexure-II is elaborate and takes considerable time to collect ( from customers,tenants, neighbours and from others documents like TIR ) and process.

Preparation of each valuation report omitting the legal aspects enumer-ated above will take not less than a week . It appears that the annexture-II is drafted without discussing with fraternity of valuers.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

since it requiresa detailed dis-cussion withthe valuersstationed atother placesalso, we sug-gest that the oldformat mayplease be al-lowed to beused so thatthe delay inprocessing andgranting loans can be avoided till adequate discussion takes place andthe Annexure-II is corrected for implementation.

We request you sir to look into the matter and do the needful sothat we can expedite the service to customers.

We eagerly look forward for your valuable suggessions and guidance.

Er. Siva Prasad, Hon. Secretary said vote of thanks to the members attended.IV


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

ASSAM

DAS, RONJEEVB.E., F.I.E., F.I.V.Govt. Reg. No. Cat-VII/7/2005-06Approved ValuerCirrus Court, By Lane 5,Lachit Nagar,Guwahati – 781 007Phone : 2453364Mobile : 9435196096E-mail : [email protected] LM C7 AM

PAUL, AJAYB.E.(Elect.), F.I.V.Approved ValuerH. No. 53, Green Wood Lane,Odalbakra Lalganesh,Guwahati – 781 034Mobile : 9864035187E-mail : [email protected] LM C7 AM

ANDHRA PRADESH

SONTHI, DURGA PRASADB.Tech., M.Tech., A.I.V.Approved ValuerF1, 8-4-6, Vasavisowgandhika,Tirumalarao Street, Gandhi Nagar,Kakinada – 533 004Mobile : 9542802666E-mail : [email protected] LM C1 AP

GARAPATI, SRINIVASA RAOB.E.(Mech.), F.I.V.Approved Valuer44-22-42, Ramalayam Street,Rly. New Colony,Visakhapatnam – 530 016Mobile : 8978880854F-24453 LM C7 AP

TOTA, GANGADHAR SAIKUMARB.Tech., A.I.V.Approved ValuerShanti Nagar, Nidadavole,West Godavari Dist. – 534 301Mobile : 9440500360E-mail : [email protected] LM C1 AP

BIHAR

SINGH, DEVENDRA PRASADB.Sc.(Engg.)(Civil), F.I.V.Approved ValuerMoh. Khajasarai,P.O. & P.S. Laheriasarai,Darbhanga Dist. – 846 001Mobile : 9430638411E-mail : [email protected] LM C1 Bi.

DELHI

SRIVASTAVA, J.P.B.Arch., F.I.V.Approved Valuer80/57, (Basement), Malviya Nagar,New Delhi – 110 017Phones : (R) 26123551 (O) 26689674Telefax : 26687536Mobile : 9810005978E-mail : [email protected] LM C1 Di.

AARORA, NEERAJICWA, LLB, PGD, F.I.V.Approved ValuerD-10/4, Opp. Balaji Plaza,Sector-8, Rohini,Delhi – 110 085Phone : 27940129Mobile : 9871435035, 9311140190E-mail : [email protected] LM C6 Di.

LIST OF LIFE MEMBERS ENROLLED DURINGTHE MONTH OF MARCH 2015


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SINGH, RAKESHICWA, F.I.V.Approved ValuerPocket-C, 211-B,Siddhartha Extension,New Delhi – 110 014Phone : 26340553Mobile : 9910020124E-mail : [email protected] LM C6 Di.

GOA

PRABHAVALKAR, SATISH VASANTRAOAMIE, F.I.V.Approved ValuerHouse No. 9/15/23,Manguirish, Kadapabandh,Ponda – 403 401Phone : 2314810 Mobile : 9420690080E-mail : [email protected] LM C1 GO

GUJARAT

TALATI, BIMAL ARVINDBHAIG.D.Arch., F.I.V.Govt. Reg. No. Cat,-I/484/2004-2005Approved Valuer304, President House,Opp. C.N. Vidyalaya, Ambawadi,Ahmedabad – 380 006Phones : (R) 26613934 (O) 26421682Mobile : 9824033579E-mail : [email protected] LM C1 Gt.

PATEL, JASVANTBHAI BHAGWANDASB.E., F.I.V.Govt. Reg. No. Cat-I/579/ABD/CC-IV/2011-12Approved Valuer2, Shreeji Nagar, Nr. Rambag,At. & P.O. Unjha,Mahesana Dist. – 384 170Phone : 326210Mobile : 9909921229, 9408969998E-mail : [email protected] LM C1 Gt.

GAJERA, VINOD VITHTHALBHAIB.E., AMIE, F.I.V.Govt. Reg. No. SRT/CCIT/ITO(OSD)/34AB/07/2014-15Approved Valuer410-Gokulam Arcade,Nr. Rison Plaza, Sarthana Jakatnaka, Sarthana,Surat – 395 006Mobile : 9033977149, 9879362949E-mail : [email protected] LM C1 Gt.

HARYANA

AGGARWAL, RAJANM.Arch., B.Arch., F.I.V.Approved ValuerH. No. 41/3, Aster Block,4th Floor, Sector – 49,Vatika City,Gurgaon – 122 018Phone : (R) 2218416Mobile : 9958364242E-mail : [email protected] LM C1 Har.

AGGARWAL, VIRENDER KUMARB.Sc.(Engg.)(Civil), F.I.V.Approved ValuerH. No. 167, Sector- 13P,Hisar – 125 005Phone : 245101Mobile : 9416336020E-mail : [email protected] LM C1 Har.

GAUR, PHUL KUMARD.C.E., B.E., F.I.V.Approved Valuer251 P, Sector-15A,Hisar (Haryana)Mobile : 9582945326E-mail : [email protected] LM C1 Har.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

GOEL, SATISH CHANDERAMIE, F.I.V.Approved Valuer150, Sector-7,Panchkula – 134 109Phone : (R) 2596111Mobile : 9780891507E-mail : [email protected] LM C1 Har.

SAINI, SANDEEPB.Arch., A.I.V.Approved Valuer991/2, Nand Colony,Hisar Road,Rohtak – 124 001Mobile : 9416260666, 9255533339E-mail : [email protected] LM C1 Har.

JAMMU AND KASHMIR

WANDKOO, BASHIR AHMEDB.E.(Elect.), F.I.V.Approved ValuerMohalla Bagi Islam,Irank Sheven Colony, Sopore,Baramulla Dist. – 193 201Mobile : 9419039903E-mail : [email protected] LM C7 J&K

KARNATAKA

MAHADEVAN, N.B.E., F.I.V.Approved ValuerNo. 78, 14th ‘B’,Main Mahalaxmipuram,2nd Stage, 2nd Phase,Bengaluru – 560 086Phone : 23193588Mobile : 9845426010E-mail : [email protected] LM C1 Ka

RAJASHEKAR PRADEEPB.E., M.I.E., F.I.V.Approved Valuer# 255, Manjushri Nilaya,J.C. Extension, Vijayapura,Devanahalli TQ.,Bengaluru Rural Dist. – 562 135Phones : (R) 27668551 (O) 27668744Mobile : 9845536713E-mail : [email protected] LM C1 Ka

SRINAGESH, N.G.B.E., F.I.V.Approved Valuer431, 38th ‘B’ Cross, 26th Main,9th Block, Jayanagar,Bengaluru – 560 069Phone : 26649393Mobile : 9449458393E-mail : [email protected] LM C1 Ka

VISHAL, M.B.E., A.I.V.Approved ValuerNo. 91, Flat No. 301, Vmaks Residency,2nd Main, Chamarajpet,Bengaluru – 560 018Mobile : 9590686611, 8041152524E-mail : [email protected] LM C1 Ka

PRASANNA KUMAR, B.S.M.Sc.(Agri.), A.I.V.Approved ValuerC/o Govindappa B.C.,A-9, Police Quarters,Berlie Street Cross, Nanjappa Circle,Shanthi Nagar,Bengaluru – 560 025Mobile : 9900569911E-mail : [email protected] LM C2 Ka


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

NATARAJA B.C.B.E., M.Tech.(Envir.), F.I.V.Approved ValuerMallikarjuna Nilaya,2nd Cross Achutha Rao Layout,Shimoga – 577 201Mobile : 9591779743E-mail : [email protected] LM C1 Ka

KERALA

MENON, RAMACHANDRANB.E.(Mech.), M.I.E., F.I.V.Approved ValuerMenon Associates,Sreemoolanagaram P.O.,Aluva – 683 680Phone : 2602702Mobile : 9446544968, 9495944968E-mail : [email protected] LM C7 Ke

COCHU, KANNAN CHANDRABABUB.Tech., F.I.V.Approved ValuerVimal Garden, Vettuvila Junction,Kalakkodu (P.O.), Paravur,Kollam – 691 302Phone : (R) 2514877Mobile : 9447894608F-24783 LM C1 Ke

MUHAMMED SALIM N.B.Sc.(Elec.&Comm.), F.I.V.Approved ValuerJabees, Thengazhikom,Vadakkevila P.O.,Kollam – 691 010Phone : (R) 2727918Mobile : 9447243785E-mail : [email protected] LM C15 Ke

MURALIDHARAN NAIR G.B.Sc.(Engg.)(Civil), F.I.V.Approved ValuerRamanilayam, Champady Lane,Perumbavoor P.O. – 683 542Phone : 2525244Mobile : 9447331808E-mail : [email protected] LM C1 Ke

SEETHI SAHIB, P.A.B.Sc.(Engg.)(Civil), M.I.E., F.I.V.Approved ValuerH. No. 70, TC5/897,Devapalan Nagar, Peroorkada,Thiruvananthapuram – 695 005Phone : 2432525Mobile : 8281075777E-mail : [email protected] LM C1 Ke

MADHYA PRADESH

PANDEY, MANOJ KUMARB.E., AMIE, F.I.V.Govt. Reg. No. Cat.-I/201/57/07-08Approved ValuerNarmada Colony,Sandiya Road, Pipariya,Hoshangabad Dist. – 461 775Phone : 220755Mobile : 9893761307F-17400 LM C1 MP

JAISWAL, RAKESH KUMARB.E., F.I.V.Approved ValuerVishvanath Bhavan,Dr. Garg Chowk, Malviya Ganj,Katni – 483 501Mobile : 9425800535, 9425323505E-mail : [email protected] LM C1 MP


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

AGRAWAL, DEEPAKB.Arch., A.I.I.A., F.I.V.Approved Valuer62/3, Manoramaganj,Indore – 452 001Phone : 2498999Mobile : 9981999999E-mail : [email protected] LM C1 MP

MAHARASHTRA

SATPUTE, MANESH BADSHAHB.E., M.E.(Stru.), F.I.V.Approved ValuerSampada Niwas, Laxminagar Township,Ghulewadi, Tal-Sangamner,Ahmednagar Dist. – 422 608Mobile : 9028039707, 9922196470E-mail : [email protected] LM C1 MS

SHAIKH, MUKHTAR NIJAMODDIND.C.E., B.Tech., F.I.V.Govt. Reg. No. NSK/CCIT/Tech./34AB(81/23(Imm.Prop)/Cat-I/2013-14Approved ValuerAmin Manzil, Nr. Tek Masjid,Osmanpura,Latur – 413 512Phones : (R) 251123 (O) 256085Mobile : 9423076085E-mail : [email protected] LM C1 MS

MUKHERJEE, AVIJITB.E., F.I.V.Approved Valuer201, Sai Krupa Tower,Plot A-3/1, Sector-20, Nerul (West),Navi Mumbai – 400 706Mobile : 9930465604E-mail : [email protected] LM C1 MS

SHAH, JAYKUMAR UMARSIB.E., F.I.V.Approved Valuer4, Rajkamal, Dr. R.P. Road,Mulund (West),Mumbai – 400 080Mobile : 9879108277E-mail : [email protected] LM C1 MS

KARNAWAT, SULTAN SINGHB.E.(Mining), F.I.V. 301/302 Bhakti Prayag Apartment,Plot No. G-11, Laxminagar,Opp. Purti Super Bajar,Aath Rasta Chowk,Nagpur – 440 022Phone : 2242855Mobile : 9158881449, 9422923357E-mail : [email protected] LM C5 MS

TANKHIWALE, SANJAY DEVIDASB.E.(Elect.), F.I.V.Approved Valuer115, “Renuka” Pawan Bhumi Layout,Wardha Road, Somalwada,Nagpur – 440 025Phone : 6453022Mobile : 9823035911E-mail : [email protected] LM C7 MS

AYYADURAI, KALLUR SUBRAMANIAMB.E., AMIIM, F.I.V.Approved ValuerFlat – 6, 3rd Floor, Chintangad Apts.,Gulmohar Lane, Aundh,Pune – 411 007Mobile : 9822096219, 9822911843E-mail : [email protected] LM C1 MS


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SATHE, RAHULB.Sc.(Mech.), F.I.E., F.I.V.Approved Valuer201, Riya Apts., 21,Mrutyunjay Colony,Pune – 411 038Phone : (R) 25466169Mobile : 9765567001E-mail : [email protected] LM C7 MS

PUDUCHERRY

MURUGAN, D.B.Tech., M.Tech., F.I.V.Approved ValuerDMS INEFRA,357, 1st Floor, M.G. Road,Puducherry – 605 001Phones : (R) 2210515 (O) 2226007Mobile : 8903306661E-mail : [email protected] LM C1 Tn

TAMIL NADU

KRISHNAMOORTHY, M.B.E., M.E.(Stru.), F.I.V.Approved Valuers2/1, Kambar Nagar,2nd Cross Street, Periyar Nagar,Chennai – 600 082Phone : 25507383Mobile : 9444282676, 9750995566E-mail : [email protected] LM C1 Tn

SHANKAR, V.M.E., B.E., F.I.V.Approved Valuer61, Anna Street,I-1, Subham Apartment-3,Thiruvanmiyur,Chennai – 600 041Phone : 24463578Mobile : 9481153804E-mail : [email protected] LM C1 Tn

VENKATACHALAMURTHY,SUNDARESHWARANB.E., M.I.E., F.I.V.Approved ValuerA-2, “Vidyatheertha”, Ramachandran Street,Saravana Nagar, Seevaram, Perungudi,Chennai – 600 096Phone : 43204090Mobile : 9445566223E-mail : [email protected] LM C1 Tn

MOHANASUNDARAM, T.B.E.(Mech.), F.I.V.Approved ValuerG2, Ashok Manor,No. 28, Thilakar Street,Perungalathur,Chennai – 600 063Phones : (R) 22741947 (O) 24342756Fax : 24327447, Mobile : 9444851448E-mail : [email protected] LM C7 Tn

SIVAKUMAR, N.B.E., F.I.V.Approved Valuer4, Santhi Nagar, B.K. Pudur,Kuniamuthur,Coimbatore – 641 008Phone : 2253085Mobile : 9489911131E-mail : [email protected] LM C1 Tn

BALRAJRETHINAM, K.B.E., F.I.V.Approved ValuerNo. 12, NSP Nagar,Thenpathi, Sirkali,Nagapattinam Dist. – 609 111Mobile : 9488925435, 9443912731E-mail : [email protected] LM C1 Tn


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

VIJAYAKUMAR, S.R.B.E., M.Tech.(Envl.), F.I.V.Approved Valuer50, Ram Nivas, Arattu Road,Ozhginasery,Nagercoil – 629 001Mobile : 9443413080E-mail : [email protected] LM C1 Tn

SENTHILKUMAR S.K.B.E., M.E., F.I.V.Approved ValuerM/s Chola Builders,119-C, Green Ways Road, Fairlands,Salem – 636 016Phone : 2445752Mobile : 9842744352E-mail : [email protected] LM C1 Tn

JEYAKUMAR, R.M.Tech.(Stru.), B.E., F.I.V.Approved Valuer2/665, Danya Nagar,Madavarvalagam, Srivilliputtur,Virudhunagar Dist. – 626 125Mobile : 9443243632E-mail : [email protected] LM C1 Tn

SOUNDRAPANDI, THOMAS GNANADURAIB.E., Ph.D.(Arch.), F.I.V.Approved Valuer68B, A.J. Nagar, Dalla Patti Road,Thiruttangal,Virudhunagar – 626 130Phones : (R) 230100 (O) 230616Mobile : 9442775560E-mail : [email protected] LM C1 Tn

TELANGANA

AYITAPU, V. SURYA NARAYANAB.Tech., F.I.V.Approved ValuerFlat No. 201, 2nd Floor,Sai Kota Residency, H. No. 2-2-647/79/1/201,Central Excise Colony, Sivanandanagar,Eagh Amberpet,Hyderabad – 500 013Phone : 27405940Mobile : 9177775940E-mail : [email protected] LM C1 TG

SAMALETI, BHUPENDRA KUMARB.Tech., F.I.V.Approved ValuerH. No. 1-5-298, Road No. 11,New Murthi Nagar, Kothapet,Hyderabad – 500 060Phone : 24141668Mobile : 9160025456E-mail : [email protected] LM C1 TG

RACHA, SHIVA PRASADB.Tech., F.I.V.Approved Valuer8-4-56, New H. No. 8-4-78,Nr. Bruzu, Siddipet,Medak Dist. – 502 103Mobile : 9440388582E-mail : [email protected] LM C1 TG

UTTER PRADESH

AGRAWAL, AMITABHAMIE, M.I.S., F.I.V.Approved Valuer401, Bharat Residency,Ahinsa Khand – II, Indirapuram,Ghaziabad – 201 010Mobile : 8527782592E-mail : [email protected] LM C1 UP


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

RAY, DAYA SHANKARB.E., F.I.V.Approved ValuerB-4/60, Vinay Khand, Gomti Nagar,Lucknow – 226 010Phone : 4001453Mobile : 9336599755E-mail : [email protected] LM C1 UP

JAIN, SANJAYB.Tech., F.I.V.Approved ValuerD-166/9, Sector-50,Noida – 201 301Mobile : 9413777777E-mail : [email protected] LM C1 UP IV

NONONONONOTICE OF SUBSCRIPTION TICE OF SUBSCRIPTION TICE OF SUBSCRIPTION TICE OF SUBSCRIPTION TICE OF SUBSCRIPTION TTTTTO MEMBERSO MEMBERSO MEMBERSO MEMBERSO MEMBERSThe Annual Membership subscription of the Institution of Valuers has fallen

due on 1st January, 2015. Hence members are hereby requested to sendthe subscription for the year 2015 alongwith arrears, if any, before 30th June,2015 (other than Life Members).

It is further informed that according to Rule No. 32 of the Rules andRegulations of the Institution, members in arrears are not entitled to vote.Besides, they will not get any benefit or privilege of membership of theInstitution if they have not paid their subscription alongwith arrears, if any,before 30th June, 2015.

The members are also informed that if they do not clear the annualsubscription for the year 2015 amounting to Rs. 1200/- alongwith arrears, ifany, before 30th June, 2015 the monthly journal Indian Valuer will be stoppedsending to such members.

(P.C. GOEL)Hon. Gen. Secretary

INSTITUTION OF VALUERS

WEST BENGAL

SAHA, PRADIP KUMARC.E., M.I.E., F.I.V.Approved ValuerWard No. 2, P.O. Tufanganj New Town,Coochbehar Dist. – 736 160Mobile : 9474386157, 9476392402E-mail : [email protected] LM C1 WB


INSTITUTION OF VALUERS · Goa - 403 602. Mob.: 9422635027 E-mail : ... Plot No. 3, Parwana Road, Adjacent to ... major projects assignment in ...

Documents