H.S. AHLUWALIA, J.M These two appeals arise out of common order of IAC, Acquisition Range, Jaipur by which he ordered acquisition of Kishore Talkies under s. 269F(6) of IT Act. This property had been sold by appellant in appeal No. 25 to appellant in appeal No. 24 on 15th May, 1980 for sum of Rs. 3,16,000. departmental valuer was asked to estimate market value of t h e property and computed same at Rs. 8,37,000. On basis of this estimate IAC, Acquisition initiated acquisition proceedings and issued notice under s. 269D of IT Act. parties took objections to same and ultimately IAC was satisfied that market value of property in dispute on date of sale exceeded sale-price by more than Rs. 1 lakh and by more than 25 per cent of said consideration and same had been done with view to facilitate or evade liability of transfer or to pay proper tax and facilitate concealment of income or moneys, assets whereof had not been declared by transferee within meaning of s. 269C (1) of IT Act. He, therefore directed acquisition of property. Both seller and purchaser have come up in appeals before us. We have heard representatives of parties at length in both these matters. On behalf of appellants, it was contended that cinema hall in question had been purchased by seller on 17th June, 1977 for Rs. 2,81,000 and allied machines had been purchased for sum of Rs. 25,000 on 18th June, 1977. After purchase, seller entered into partnership and ran cinema for four years. During which it was so run, he incurred loss in every year ranging between Rs. 5,64,000 to Rs. 34,000. Departmental Valuer had valued cinema on basis of monthly rent of Rs. 9,000 which in fact, had never been earned by seller. It may be that after sale, purchaser was able to secure some high rent from one Shri Ramaswarup but even tenant could not make any profits from running of cinema and it would be impossible for tenant to pay agreed amount of rent. Moreover, computation of net rent made by Departmental Valuer was also on wrong basis. Commercial building including machinery and furniture do yield higher rent than building and method of computation was wholly improper. property should have been valued on land and building method and according to report of Registered Valuer Shri V.P. Admanabhan, value of building as on 19th May, 1980 on land and building method came to Rs.3,18,010 only. Further, it was argued that no material had been brought on record by acquisition authorities to justify their conclusion that under statement of sale consideration has been made with view to avoid liability for any tax or conceal any income. Next it has been contended that authorities below had relied upon rent which was stated to be payable by tenant introduced into premises long after sale in question which could not have been taken into consideration for determining market value of property in dispute, because it was income that was being earned by transferor at time of sale on which rent capitalisation method could have been supplied if at all to estimate fair market value of property. If rent fixed for property in question after date of sale was relevant factor to compute market value of property, tenant should be deemed to be person in occupation of property and notice should have been given to him under cl.(a) of s. 269D(2) of IT Act. Lastly, our attention was drawn to Circular No.455 issued by CBDT on 16th May, 1986 wherein it has been stated that with view to achieve early finalisation of proceedings, Board had decided that w.e.f. 1st April, 1986 acquisition proceedings under s. 269C will not be initiated in respect of immovable properties for which apparent consideration is of Rs. 5 lakhs and less and where acquisition proceedings had been initiated, proceedings would be dropped if apparent consideration of property was below Rs. 5 lakhs. On behalf of Department, no argument was specifically advanced except that reliance was placed upon order of IAC in question. After carefully considering all facts and circumstances of case we are of opinion that order of IAC was such cannot be sustained. IAC has not chosen to go into main question whether any money had actually passed between parties under table nor has he suspected bona fides of transaction otherwise. He has jumped to conclusion only relying upon report of Departmental Valuer. That report is solely based on rent capitalisation method. What is leased in cinema house is not only building of cinema, but also furniture and machinery. It is matter o f common knowledge that there is higher rate of depreciation in respect of furniture and machinery than building only. gross yearly rent of cinema is Rs. 90,000 out of which Rs. 81,034 has been capitalised by Valuation Officer. This figure is certainly very high because even in cases of urban properties, depreciation whereof is small usually 1/6th deduction on account of repairs is allowed besides collection charges and other payments. Even lease deed of property in question shows that according to agreement lessor had to get repaired and redone all furniture, fixture and fittings of cinema and get machines in perfect working order at his own cost before handing over possession of premises to lessee and if machine did not work properly, same had to be replaced by new one at cost of lessor. He had also to obtain water connection for building within two months. This shows that condition of cinema at time of leasing was not at all satisfactory. list of expenses debited to cinema account between 26th July, 1983 and 10th Feb., 1984 was furnished to us showing that something near about Rs. 2 lakhs land to be spent on it. Further multiple of about all which has been applied to net maintainable rent by Valuation Officer is only applicable in case of residential or only commercial buildings. Such high multiple may not be applicable to leasing of machinery, price whereof depreciates whereas price of other properties appreciate from year to year. number of authorities were cited in this behalf which we quote as under:(1) CIT vs. Smt. Vimla Ben Bhagwandas Patel, (1979) 13 CTR (Guj) 27: (1979) 118 ITR 134 (Guj) (2) Telerad Pvt. Ltd. vs. Competent Authority (1980) 16 CTR (Guj) 315: (1980) 126 ITR 1 (Guj) (3) Rai Bahadur G. V. Swaika Estate P. Ltd. & Ors. vs. M.N. Tewari & Ors. (1980) 126 ITR 310 (Cal) (4) CIT vs. Smt. Phoolmati Devi (1980) 16 CTR (Cal) 75: (1983) 144 ITR 954 (All) (5) All India Reporter Ltd. vs. Competent Authority (1986) 162 ITR 697 (Bom). Upon consideration of these and other all over facts and circumstances of case, we are of opinion that summary acquisition of property done in manner by IAC was not justified and more effort should have been made by him to find out true market value of property having regard to facts and circumstances of case. While we agree with Department that subsequent rent of property could be considered for purpose of estimating fair market value of property at time of sale, all other factors which we have pointed out above should also have been considered alongwith it. It would also have been appropriate if new tenant was served with notices of these proceedings so that he could explain circumstances under which he agreed to pay higher rent and extent to which he could run cinema profitably after paying rent amount in question. But there is another aspect of matter. As stated above, it was pointed out that proceedings for acquisition of this property should have been dropped in light of Circular No. 455 (supra). This argument appears to have been taken by appellants before IAC who rejected same on ground that recommendation for acquisition of this property had been submitted to CIT under s. 269-F(6) before issue of Circular and CIT had already approved same vide his letter No. 513 dt. 14th July, 1986. We, however, find that Circular in question had been issued by CBDT on 16th May, 1986 so that approval of Commissioner was definitely given after this circular had been issued. departmental representative was not in position to state as to when approval of Commissioner was sought for and whether provisions of this circular were specifically brought to notice of Commissioner and how they were interpreted. So far as this Tribunal is concerned, in Sanwal Ram Badhadhara 9, Tax World Part XI, page 504 and Radheyshyam Mittal vs. IAC (1986) 57 CTR (Trib) 59(Jp) acquisition of properties where apparent sale consideration was small had already been quashed by Tribunal was referring to Circular in question. Since procedure adopted by Department in this case and method of calculation of fair market value of property in question was not quite correct, we are of opinion that it would mean unnecessary harassment and inconvenience to parties if fresh effort is made to re-estimate market value of property. We accordingly, accept appeals and quash order of acquisition. In result appeals are allowed. *** KANHAYALAL & ANR v. COMPETENT AUTHORITY, IAC