Soaring City
Prices of real estate in Chandigarh have soared over the past year bringing it in the league of major metros, writes Pradeep Sharma

At a time when the world is yet to come to terms with recession and meltdown, which had hit the real estate sector hard, realty seems to be on a roll in Le Corbusier’s architectural wonder leaving several real estate pundits foxed. A square yard of residential land in Chandigarh’s not-so upmarket Sector 32 is worth Rs 1.06 lakh, bringing the city in the league of metropolitan cities.

The record price of Rs 1.4 crore for a 5-marla plot was just an indicator as the prices in the recent auction conducted by the Chandigarh Administration climbed up to a whopping Rs 74,820 per square yard from Rs 55,299 in the last auction held on October 23, 2008, registering a substantial increase of Rs 19,521.

However, the million dollar question is whether this real estate boom will last or is it just a passing phase paving the way for the “correctional period” to set in bringing property within the reach of the middle class? Even as the debate whether the city of the “tired and the retired” is turning into a mecca for the rich rages on, the real estate experts are unanimous that the current realty boom is for real.

In fact, arguably the most-livable city in the country has certain advantages over its counterparts in other parts of the country. Being a Union Territory directly administrated by the Central Government, funds for development have never been a problem for Chandigarh. In fact, being the joint capital of two of the most prosperous states — Punjab and Haryana — besides being the administrative headquarters, Chandigarh enjoys a special status.

“Chandigarh offers world-class living standards at Indian prices. With a limited area of 114 sq kms and hardly any scope for expansion, the recent property boom is not misplaced and is going to be a lasting one,” claims B.K Sanghi, chairman of the Haryana Group Housing Federation.

 Terming the next decade (2010-20) as the decade of the tricity, particularly of Chandigarh, as far as the realty sector is concerned, Sanghi said the easing of the property transactions rules and relaxations in the building bylaws were the major reasons for the sudden spurt in property prices in the city.

Realtors feel that Chandigarh offered best bet for both the investors and end users. The investors take fancy to the city as the property prices have never come down in the city even in during the worst phase of recession. On the other hand, the residents, including the NRIs, prefer the city to other cities for its living standards and cosmopolitan character. “It nearly matches the living standards abroad. This coupled with apolitical administration in the city makes it a favourite destination for the NRIs,” Avtar Singh Dhillon, an NRI investor, remarks.

Jaipur
Not in pink of green
Perneet Singh

Burgeoning population and subsequent surge in construction activity in the Pink City has not only thrown its modest infrastructure out of gear, but has also taken a toll on its green cover.

To cater to the rising demand of dwelling units, the land mafia has grabbed fertile land, besides depriving the residents of green belts and play areas. A town planner, pleading anonymity, said some influential builders had exploited vast tracts of fertile land in the Mansarovar, Jagatpura and Prithviraj Nagar areas for developing residential and commercial projects.

“A part of this area was used for producing vegetables earlier, but all this has turned into a concrete jungle over the years,” he added. All this rapid colonisation is also having an adverse affect on major tourist spots in the city. For instance, the famous Amber Fort reservoir didn’t get filled up this year, as its water source — Ramgarh Lake — has dried up as colonisers have blocked its water channels.

The land mafia has not even spared privately managed temples on the outskirts of the city. The vast stretches of fertile land along highways and in the suburban areas that “belonged” to these temples has been “utilised” by the colonisers.

They have carved out residential and commercial plots on this land and have minted huge profits from such deals.

Apart from this, the builders are also openly flouting the building bylaws vis-à-vis maintaining green cover while developing the housing units. “Except a few localities, building bylaws have been flouted in all other areas. For instance a developer has to ensure that 15 per cent of the area would be utilised for greenery and open space, but this norm is not being followed in most of the newly developed areas in the city,” said Dhirendra Mishra, an architect of a private construction company.

When The Tribune asked the Jaipur Municipal Corporation (JMC) authorities about the relevance of norms when they are not being complied with, an official said they didn’t have any power to take suo motu action. “Until and unless the state legislature empowers us to enforce the rules we cannot do much. There is also a need to ensure that all the builders are issued necessary certificates only after 100 per cent compliance to the building bylaws,” he added. According to him, those buying dwelling units should ascertain whether the building has got all the clearances before taking the possession of their house from the builders. “People often don’t get proper parking and green space due to this reason,” he said, adding that the violation of norms had added to the chaos in the city.

To promote greenery in the city, the town planning experts say the government should give incentives to group housing projects. “Promoting multi-storeyed group housing will not only help us conserve the ecology but also provide better civic amenities to the residents,” said Prem Kumar, a town planner. 

Commercial crash

The auction of property in Chandigarh presents a study in contrast. While the prices of residential property hit the roof, the auction of the commercial property evoked poor response, so much so that average price per square yard came down substantially to Rs 2.74 lakh from Rs 3.18 lakh in the last auction held on October 23, 2008.

Even the highest per square yard rate of Rs 3.14 lakh for a hotel site in Sector 43-B in the recent auction was less than the average price in the last auction.

 Chandigarh Administration’s unfair policy of selling commercial property on leasehold as against freehold for the residential property besides mushrooming of shopping malls and declining rentals appear to be the chief culprits for the poor response to the commercial auction, said J.P.S. Kalra, general secretary of Sector 17 Traders Association, Chandigarh. Since the allottees have to pay lakhs of rupees as the lease money to the administration besides the property tax, buying commercial property was not a profitable proposition, claims Sandeep Singh, an investor.

At a time when lakhs of square feet of space is available in shopping malls and other commercial establishments and rents are coming down in the wake of the recession, investing in commercial property is not a wise decision, he quips. And that was perhaps the reason that shop-cum-office sites in Sector 32 fetched a maximum of Rs 3.10 crore compared to Rs 4.75 crore in the October 2008, auction.

Hospitality destination

Six lodging-cum restaurant sites (hotel sites) in Sector 43 along the Chandigarh-Mohali road were the hot favourites in the commercial auction with maximum bid going up to Rs 12.21 crore and minimum Rs 8.5 crore. The good response to hotel sites underlined Chandigarh’s emergence as a hospitality and entertainment destination, observers said. Besides, it also showed that there was a shortage of good accommodation in the city, which acts a gateway to Punjab, Haryana and Himachal Pradesh.

Blend of tradition and modernity
Ehsan Fazili

An emblematic blend of traditional Kashmiri architecture with modern technological support has come up in the form of a unique shopping plaza of metro standards with an outstanding look and distinctive ambience in the heart of Srinagar. “Sangarmaal City Centre”, being constructed by the Srinagar Development Authority (SDA) at the cost of Rs 16.50 crore, has its first phase completed, while seven more blocks would be constructed in the next three phases. The first phase comprising two buildings, Module A and Craft Bazaar with a beautifully designed landscaping has many things to offer, as it has been designed and developed with the idea of “Shopping-in-Leisure.”

The complex is provided with every such facility that any modern Shopping Plaza in Delhi, Mumbai or for that matter any other metro city has got, said an official of the SDA. The completion of the first phase has taken more than five years of sustained and dedicated work under the supervision of a team of engineers and construction experts.

The Sangarmaal Shopping Plaza would offer a unique shopping experience in the city with several multi-national brands vying for a space there, said Vice-Chairman SDA, Kifayat Hussain Rizvi. “Visiting Sangarmaal would be an entirely new shopping experience in the city which is scarce in such facilities,” he said and added that the SDA has already received requests from several multi-national brands including KFC and McDonalds for a space in the Sangarmaal.

The complex has come up on the old yard of the State Road Transport Corporation (SRTC), which had been shifted to a new and spacious complex on the By-Pass at Bemina on city outskirts. Out of the total area of 64 kanals, the first phase of shopping complex has come up over an area of 20 kanals. The first phase has 62 shops, 11 office spaces, one restaurant, two food courts and 11 kiosks with parking facility for almost 350 vehicles, including basement parking for 100 vehicles. In addition, the craft bazaar has 38 shops with a distinct Kashmir heritage touch.

The most striking feature of the Sangarmaal is that it has been designed in tune with the distinct Kashmir heritage and architecture. “The doors, windows, ventilator frames and the roof flooring are being done in teakwood with ornamental wood-work like Khatamband and Jali to renew the traditional Kashmiri architecture,” said Riyaz A Kaul, the SDA Engineer associated with the construction of Sangarmaal.

Being unique in its features, the complex is a combination of traditional Kashmiri architecture and modern technology. It has four escalators and a lift in the main Module A that is also fitted with the latest firefighting alarm system. The traditional architectural items include the neatly carved Devri stones, Maharaja cladding, khatmband (wooden) ceiling cover, and jaffri jaali (wooden fencing network). “The use of these stones, bricks and ceiling, due to its intricate nature, has been time consuming”, said Kaul. Nearly 27,000 (Devri) stone and 1.40 lakh bricks from Maharaja brick kilns have been used, he said adding that these bricks have been conjoined by Red Lime which gives a traditional look to the complex.

While the allotment of shops, office and other spaces is in progress, the complex is expected to attract not only the local consumer, but also the domestic and foreign tourists visiting the Valley. 

Tata Group plans ‘Vivanta’ in Srinagar

Mumbai:Indian Hotels Company, a part of the Tata Group, has signed a management contract with SAIFCO Hill Crest Hotels for a hotel in Srinagar under the brand ‘Vivanta by Taj’, in a bid to expand its footprint in northern India.

SAIFCO Hill Crest Hotels is a part of the SAIFCO Group of Industries, which has presence in sectors like cement, real estate, flour mills in Jammu & Kashmir.

The six-acre property is located on a hilltop, 20 km away from the new airport, Indian Hotels said in a release.

The hotel will have 89 rooms at the time of opening, with suites and guest rooms spread out in villas and each providing a breathtaking view of the valley. This includes a Presidential Suite of over 2,500 sq ft and five other suites.

“We are highly appreciative of the warm response to this project by the state government. The Taj believes that Srinagar has potential to be developed as an important tourist hub,” IHCL, VP Business and Corporate Affairs, D K Beri said. “Vivanta – Srinagar fits into this bracket as there is a growing market to cater to the tourist who would like a contemporary and creative experience with traditional charm.

This property in Jammu and Kashmir is, for us, a meaningful step in expanding our national portfolio,” he added. — PTI 

GREEN HOUSE
The perfect HEDGE
Satish Narula

There are a few subjects in horticulture that need a rethink and choosing the right hedge for lawn is one of them. But this subject is not new. Many plants have been tried as hedges. But the key point here is that whether one should use a particular plant as hedge because one has heard about it or there is some logic behind using it? Can a hedge be a problem for your garden?

A hedge is that kind of planting that garlands the length and breadth of a garden. It is present in the vicinity of almost all the plants in the garden and has a significant bearing on the plants. Thus it becomes all the more important to learn all about hedges first and then select an appropriate species for your garden.

Choose sensibly

The hedging plants are like any other plant and have their own merits and demerits. Insects and diseases attack these plants also. But we normally ignore this aspect. A disease-infested hedge becomes a source of infection for other plants in the garden. Even when we spray our plants, the insects or diseases are never controlled effectively. This is because we never spray our hedges that become the hiding and breeding centre for insects and diseases. Take for example the hedge of Murraya Exotica (commonly called Murraya), with “shiny” leaves. This hedge is very prone to powdery mildew disease. One usually finds a white powdery mass on its leaves. This disease can spread from the hedge to other plants in the lawn, too. The affected leaves turn yellow and drop after some time and subsequently the whole plant starts wilting and you will find gaps in the hedge. This hedge is also prone to nematodes and becomes a source of their spread in the garden. Those fond of growing citrus species plants or vegetables should keep this aspect of Murraya in mind.

Aliar is another hedging plant. It is the one with long leaves. In the early stages it forms a thick hedge but with every cutting, it gains height and after some time there is thick foliage growth only at the top with whopping gaps in the middle and near the base of the hedge.

All species of Duranta — green, golden and variegated — prove to be good hedges. These plants are not much troublemakers and take the pruning well forming a thick wall. One of the best hedging plants, however, is Clerodendron inermii. The screening effect of this hedge is excellent. Another advantage with this hedge is that it can be grown to any height.

Some people also use bougainvillea and hibiscus for hedges, but I am skeptical about this. Such plants bear flowers at the terminals but due to repeated cuttings, it is not possible to get blooms. And if you want to have blooms at a particular time, then it is at the cost of screening and disciplined growth as the hedge plants, if not cut properly, start interfering with other plants. A plant should always be given its proper place for getting the best out of it.

Sometimes when you get landscape guidance from an unqualified person, you end up growing a hedge of Ficus species plants near the wall. No doubt it forms a good hedging in the initial stages but what about the roots that may even dislodge a wall when the plants age. It’s like growing near the wall a hedge of peepal that belongs to the same class.

This column appears fortnightly. The author is Senior PAU Horticulturist at Chandigarh and can be reached at

satishnarula@yahoo.co.in

Fortnightly Alert

Chrysanthemums are in full bloom now. But before the bloom is lost, make a note of its colour and type and mark the plant, as you will need this information at the time of giving training to the plant next year.

TAX TIPS 
Tax on compensation amount
S.C. Vasudeva

Q. My agricultural land situated within 8 km of the local limits of M.C was compulsory acquired by the government in 2003 at a paltry sum of Rs 8 lakh per acre. I filed an appeal for increasing the compensation amount. The compensation amount was enhanced by the District Court in 2006 from Rs 8 lakh to Rs 17 lakh per acre. I filed another appeal in the High Court for increasing the compensation amount further. The High Court has also enhanced the compensation in 2009 from Rs 17 lakh to Rs 20 lakh per acre. Now the state government has filed an appeal in the Supreme Court seeking reduction of the compensation amount from Rs 20 lakh to Rs 8 lakh per acre. The appeal is pending in the Supreme Court.

I have received a sum of Rs 24 lakh as enhanced compensation from the District Court in December 2007 and I have kept it in a savings bank account. But the compensation amount enhanced by the High Court has not been paid to me so far. My Advocate tells me that the amount of enhanced compensation already received by me from the District Court should be used for the purchase of agricultural land within two years of its receipt. But at this stage it is not possible for me to purchase the agricultural land because the state appeal for the reduction of enhanced compensation is pending in the Supreme Court. In case the SC reduces the enhanced compensation, then it will have to be refunded to the government. Secondly the compensation amount enhanced by the High Court has not been paid to me so far. So you kindly advise me on the following points:

Whether the time limit of two years will start from the date of the receipt of the balance amount of enhanced compensation from HC or from the date of the receipt of the enhanced compensation from the District Court i.e. December 2007 or from the final decision of the Supreme Court in the state appeal.

In case land is not available for sale can I use the amount for some other purposes, and what would be my tax liability.

— Balwant Singh

A. Your queries are replied hereunder:

Section 54B of the Income-Tax Act 1961 (the Act) deals with the exemption from taxability of capital gain arising on the transfer of agricultural land used by the assessee or his parent for agricultural purposes. The section provides that such exemption will be available in case the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes by utilising the capital gain, which arose on the sale of the agricultural land. The above time limit is to be reckoned from the date on which the transfer of the agricultural land being used by the assessee or his parent took place. The time limit as aforesaid has no connection with the date of the receipt of the amount of compensation.

The amount of compensation on the acquisition of the agricultural land by the government would not be taxable provided the following conditions are satisfied:

n The land is situated in the local limits of the municipal committee/corporation.

n Such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such individual or a parent of his;

n Such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India;

n Such income has arisen from the compensation or consideration for such transfer received by such assessee on or after April 1, 2004.

In case the amount received as compensation is exempt from tax, the same can, therefore, be utilised for any purpose. However, in case you do not comply with the conditions at (a) to (d) above, the capital gain arising on the acquisition of a land would be taxable in the year of receipt of compensation. It is not possible to compute the tax liability, as the particulars relating to cost of acquisition of agricultural land and the year of its acquisition are not indicated in the query. 

Entitled to exemption

Q. In your reply to a query (December 5) you had advised a reader that the full consideration of the sale of the plot be deposited in the bank under the Capital Gain Scheme account. It can be utilised in purchasing a self-financing scheme flat being built by the Chandigarh Housing Board with the condition that the flat should be handed over to you within three years from the date of the sale of the plots. Clarification as per Circular no: 471 (dated October 15, 1986) and Circular no.667 (dated October 18, 1993) is that the allotment of a residential flat in self-financing scheme is akin to the construction of residential house on behalf of the allottee. Now the problem can arise:

The construction is being done by the Chandigarh Housing Board i.e. other than the party himself. And the flat is not handed over within three years as promised and duly signed Agreement Document. The party has paid the full consideration of the agreed amount within three years (more than the long-term capital gain amount involved).

Completion Certificate cannot be procured. Will the party suffer Capital Gain Tax or it shall be taken as the flat is purchased within the stipulated period to exempt the party from paying any tax ?

At this stage do you suggest any other way of getting exemption in paying tax, as the party’s intentions are very much clear.

— Nnipander Parkash Khanna

A. Your queries are replied hereunder:

If the taxpayer pays full consideration or a substantial portion of it in terms of the purchase agreement within the period of three years, the exemption under Section 54F would be available even if the possession is handed over after the stipulated period or the sale deed is registered later on. In this connection your kind attention is invited to the decision of Bombay High Court in the case of Commissioner of Income-tax vs. Mrs Lilla J. B. Vadia (216 ITR 376).

There would not be any requirement of completion certificate in view of the above.

Question no. 3 and 4 of your query would not arise in view of the legal position explained above. 

What is capital asset?

Q. What is covered in the term capital asset for the purposes of computing capital gains under the provisions of the Income-Tax Act?

—A.K. Sareen

A. The expression “capital asset” means property of any kind held by an assessee, whether or not connected with his business or profession. However, the following assets are excluded from the definition of capital asset:

Any stock-in-trade, consumable stores or raw material held for the purposes of business or profession.

Personal effects of the assessee, that is to say, movable property, including wearing apparel and furniture held for his personal use or for the use of any member of his family dependent upon him.

Agricultural land in India provided it is not situated – In any area within the territorial jurisdiction of a municipality or a cantonment board, having a population of 10,000 or more; or in any notified area; 6.5 per cent Gold Bonds, 1977; or 7 per cent Gold Bonds, 1980; or National Defence Gold Bonds, 1980 issued by the Central Government; Special Bearer Bonds, 1991; Gold Deposit Bonds issued under Gold Deposit Scheme, 1999.