Mr. JUSTICE ALLOY
delivered the opinion of the court:
This is an appeal from an order of the Circuit Court of Fulton County which affirmed the decision of the Property Tax Appeal Board with regard to classification of the Norris Mine preparation plant as well as the level of assessment which was used by the Board in computing the assessed valuation of plaintiff’s property, but in which the trial court reversed the determination of the actual values of plaintiff’s property made by the Property Tax Appeal Board. The appeal is taken from that portion of the trial court’s order which reversed the determination of the actual values of plaintifFs property.
On appeal in this court, the defendants (Property Tax Appeal Board of the Department of Local Government Affairs of the State of Illinois and the Fulton County Board of Review) contend that the finding and decision of the Property Tax Appeal Board are supported by substantial competent evidence and are not against the manifest weight of the evidence; that the Property Tax Appeal Board used a proper method of evaluation in the instant case; that the figure which the trial court set as the actual value of the preparation plant was erroneous; and that the trial court erred in entering its own valuations as to the property in question.
Plaintiff Consolidation Coal Company (hereinafter called “Consolidation”) commenced a strip mining operation at its Norris Mine in the middle of 1969, and moved in substantial heavy equipment and machinery in anticipation of an estimated 1970 output of over 3,000,000 tons of coal. It soon became apparent, however, that the mine would not be that productive. Consolidation was able to mine only 1.8 million tons in 1970. Revised forecasts disclosed that the amount of coal in the mine was much less than originally anticipated.
The Fulton County Board of Review determined the valuation for 1970 tax purposes of plaintiff’s property at the mine. Plaintiff then sought to challenge the valuations of 11 pieces of heavy machinery (6 shovels, 3 wheels, and 2 drag lines) and of the coal preparation plant (the plant was classified as realty). Plaintiff appealed from the county valuations to the Property Tax Appeal Board under the provisions of section 111.1 of the Revenue Act of 1939 (Ill. Rev. Stat. 1969, ch. 120, § 592.1).
At the hearing before the Tax Appeal Board, plaintiff called five witnesses to establish estimated values of the property involved. These witnesses were the sales director of a power shovel company, the president of a dealer in heavy mining equipment, a self-employed used equipment broker, and two representatives of the American Appraisal Company, professional appraisers. Not all the witnesses testified to values for each item in dispute. The American Appraisal estimates totaled $4,475,000 actual value for all but one of the pieces of machinery and $1,600,000 for the preparation plant. The highest figure estimated for each item by any one of the plaintiff’s witnesses would total, as the greatest total valuation for all of the 11 pieces of equipment, the sum of $5,148,000.
The County Board responded with testimony of a witness (Mr. Miller) from the Jacobs Company which had appraised the plant and equipment for the county. The estimates of the Jacobs Company representative, which are now challenged by the plaintiff, were $11,332,780 for the equipment and $2,659,320 for the preparation plant. The Jacobs appraisal for each item was determined by use of a formula in which the original cost of the item was “trended” up to 1970, a so-called current “replacement” cost, and then a factor for depreciation was subtracted to arrive at a value. Plaintiff’s witnesses, on the contrary, testified as to what they estimated they could sell the various items for, although they admitted that for several of the items there would be little, if any, demand. Testimony indicated that most of the equipment was fairly old or obsolete compared to modern mining equipment, and much of it was in disrepair, though still functioning.
The Property Tax Appeal Board in its opinion, distinguished the “As is, Where is” appraisal method of plaintiffs witnesses from the "value in use” concept of the Jacobs appraisal, and held:
“* * * these specific pieces of mining machinery must be appraised for value in use as an integral part of a coal producing operation and, therefore, (the Board) accepts the Jacobs Company, Inc. appraisal as being the only one using the correct appraisal concept.”
The Board, therefore, adopted the Jacobs figures for actual value though it did use a lower level of assessment and thus reached a somewhat lower value than imposed by the County Board.
Plaintiff brought an action for review of the Board decision in the Circuit Court of Fulton County under the Administrative Review Act (Ill. Rev. Stat. 1969, ch. 110, §§ 264—279). At the request of both parties for findings of fact by the trial court, the court made a determination as to the values and found that the equipment had an actual cash value of $7,197,070 and accepted the American Appraisal Company figure of $1,600,000 for the preparation plant. The trial court held that the Jacobs Company appraisal was not shown to be related to the statutory basis of faff cash value and that it was error for the Tax Board to rely exclusively on the Jacobs figures.
The parties agree as to the basic principles for judicial review of administrative proceedings. It is agreed that an administrative agency decision is upheld by the courts where it is supported by substantial competent evidence in the record and is reversed only where it is against the manifest weight of the evidence or where such evidence clearly indicates a contrary decision. Schnulle v. Board of Fire & Police Commissioners, 16 Ill.App.3d 812, 818, 306 N.E.2d 906 (1974).
There are also well-established rules for the challenge of property valuations for tax purposes. In Illinois, for purposes of property tax, both real and personal property are to be assessed according to “fair cash value.” (Ill. Rev. Stat. 1969, ch. 120, §§ 501, 502.) This is generally interpreted to mean “fair market value” or the price that the property would bring at a sale where both parties are willing, ready and able to do business and under no duress to do so. Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill.2d 428, 430, 256 N.E.2d 334 (1970); People ex rel. Rhodes v. Turk, 391 Ill. 424, 427, 63 N.E.2d 513 (1945).
It is weE settled that a mere difference of opinion as to value will not be sufficient to warrant judicial interference in the assessment process. (Clarendon Associates v. Korzen, 56 Ill.2d 101, 104, 306 N.E.2d 299 (1973); People ex rel. Frantz v. M.D.B.K.W., Inc., 36 Ill.2d 209, 211, 221 N.E.2d 650 (1966), and cases cited therein.) It has been stated that constructive fraud must be shown though it need not be actual fraud. (Clarendon Associates v.
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Mr. JUSTICE ALLOY
delivered the opinion of the court:
This is an appeal from an order of the Circuit Court of Fulton County which affirmed the decision of the Property Tax Appeal Board with regard to classification of the Norris Mine preparation plant as well as the level of assessment which was used by the Board in computing the assessed valuation of plaintiff’s property, but in which the trial court reversed the determination of the actual values of plaintiff’s property made by the Property Tax Appeal Board. The appeal is taken from that portion of the trial court’s order which reversed the determination of the actual values of plaintifFs property.
On appeal in this court, the defendants (Property Tax Appeal Board of the Department of Local Government Affairs of the State of Illinois and the Fulton County Board of Review) contend that the finding and decision of the Property Tax Appeal Board are supported by substantial competent evidence and are not against the manifest weight of the evidence; that the Property Tax Appeal Board used a proper method of evaluation in the instant case; that the figure which the trial court set as the actual value of the preparation plant was erroneous; and that the trial court erred in entering its own valuations as to the property in question.
Plaintiff Consolidation Coal Company (hereinafter called “Consolidation”) commenced a strip mining operation at its Norris Mine in the middle of 1969, and moved in substantial heavy equipment and machinery in anticipation of an estimated 1970 output of over 3,000,000 tons of coal. It soon became apparent, however, that the mine would not be that productive. Consolidation was able to mine only 1.8 million tons in 1970. Revised forecasts disclosed that the amount of coal in the mine was much less than originally anticipated.
The Fulton County Board of Review determined the valuation for 1970 tax purposes of plaintiff’s property at the mine. Plaintiff then sought to challenge the valuations of 11 pieces of heavy machinery (6 shovels, 3 wheels, and 2 drag lines) and of the coal preparation plant (the plant was classified as realty). Plaintiff appealed from the county valuations to the Property Tax Appeal Board under the provisions of section 111.1 of the Revenue Act of 1939 (Ill. Rev. Stat. 1969, ch. 120, § 592.1).
At the hearing before the Tax Appeal Board, plaintiff called five witnesses to establish estimated values of the property involved. These witnesses were the sales director of a power shovel company, the president of a dealer in heavy mining equipment, a self-employed used equipment broker, and two representatives of the American Appraisal Company, professional appraisers. Not all the witnesses testified to values for each item in dispute. The American Appraisal estimates totaled $4,475,000 actual value for all but one of the pieces of machinery and $1,600,000 for the preparation plant. The highest figure estimated for each item by any one of the plaintiff’s witnesses would total, as the greatest total valuation for all of the 11 pieces of equipment, the sum of $5,148,000.
The County Board responded with testimony of a witness (Mr. Miller) from the Jacobs Company which had appraised the plant and equipment for the county. The estimates of the Jacobs Company representative, which are now challenged by the plaintiff, were $11,332,780 for the equipment and $2,659,320 for the preparation plant. The Jacobs appraisal for each item was determined by use of a formula in which the original cost of the item was “trended” up to 1970, a so-called current “replacement” cost, and then a factor for depreciation was subtracted to arrive at a value. Plaintiff’s witnesses, on the contrary, testified as to what they estimated they could sell the various items for, although they admitted that for several of the items there would be little, if any, demand. Testimony indicated that most of the equipment was fairly old or obsolete compared to modern mining equipment, and much of it was in disrepair, though still functioning.
The Property Tax Appeal Board in its opinion, distinguished the “As is, Where is” appraisal method of plaintiffs witnesses from the "value in use” concept of the Jacobs appraisal, and held:
“* * * these specific pieces of mining machinery must be appraised for value in use as an integral part of a coal producing operation and, therefore, (the Board) accepts the Jacobs Company, Inc. appraisal as being the only one using the correct appraisal concept.”
The Board, therefore, adopted the Jacobs figures for actual value though it did use a lower level of assessment and thus reached a somewhat lower value than imposed by the County Board.
Plaintiff brought an action for review of the Board decision in the Circuit Court of Fulton County under the Administrative Review Act (Ill. Rev. Stat. 1969, ch. 110, §§ 264—279). At the request of both parties for findings of fact by the trial court, the court made a determination as to the values and found that the equipment had an actual cash value of $7,197,070 and accepted the American Appraisal Company figure of $1,600,000 for the preparation plant. The trial court held that the Jacobs Company appraisal was not shown to be related to the statutory basis of faff cash value and that it was error for the Tax Board to rely exclusively on the Jacobs figures.
The parties agree as to the basic principles for judicial review of administrative proceedings. It is agreed that an administrative agency decision is upheld by the courts where it is supported by substantial competent evidence in the record and is reversed only where it is against the manifest weight of the evidence or where such evidence clearly indicates a contrary decision. Schnulle v. Board of Fire & Police Commissioners, 16 Ill.App.3d 812, 818, 306 N.E.2d 906 (1974).
There are also well-established rules for the challenge of property valuations for tax purposes. In Illinois, for purposes of property tax, both real and personal property are to be assessed according to “fair cash value.” (Ill. Rev. Stat. 1969, ch. 120, §§ 501, 502.) This is generally interpreted to mean “fair market value” or the price that the property would bring at a sale where both parties are willing, ready and able to do business and under no duress to do so. Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill.2d 428, 430, 256 N.E.2d 334 (1970); People ex rel. Rhodes v. Turk, 391 Ill. 424, 427, 63 N.E.2d 513 (1945).
It is weE settled that a mere difference of opinion as to value will not be sufficient to warrant judicial interference in the assessment process. (Clarendon Associates v. Korzen, 56 Ill.2d 101, 104, 306 N.E.2d 299 (1973); People ex rel. Frantz v. M.D.B.K.W., Inc., 36 Ill.2d 209, 211, 221 N.E.2d 650 (1966), and cases cited therein.) It has been stated that constructive fraud must be shown though it need not be actual fraud. (Clarendon Associates v. Korzen, 56 Ill.2d 101, 104, 306 N.E.2d 299 (1973).) Pursuing this rule, it is apparent that it should be shown that the afleged overvaluation of the property of plaintiff is such as to be constructively fraudulent, so that the Board’s approval of the valuation could be considered as being against the manifest weight of the evidence.
Defendants argue that since the trial court refused to say that the Jacobs Company appraisal was wholly wrong, there could be no finding by the trial court that the decision adopting the Jacobs figures was against the manifest weight of the evidence. This contention misapprehends the trial court’s decision and reflects a viewpoint which is mistaken, that the Board was required to accept either the Jacobs appraisal or the American appraisal. The trial court is not required to rigidly follow either appraisal. The trial court held that it was against the manifest weight of the evidence for the Property Tax Appeal Board to rely solely on the Jacobs estimates to the exclusion of all other testimony.
In the briefs filed in this court as weE as in the proceeding before the Property Tax Appeal Board and in the circuit court, the parties seem to view the issue as a battle between two conflicting methods of valuation, i.e., the “market value” doctrine and the “value in use” concept. The Board found that there was insufficient evidence of market values for the equipment, and that a “value in use” appraisal was necessary. It then looked to the Jacobs figures as the only ones based on “value in use.” We do not specificaUy dispute the “value in use” concept, as it is obvious that a machine which is functioning as part of a production process may have little or no value to an outside buyer, while being worth more to the owner as a working piece of equipment. It may be proper in such instances to value the property for tax purposes at the latter level. In the cause beforé us-, however, the testimony of plaintiff’s witnesses indicated that there was a market (in several cases restricted) for most of the items in dispute. It also appears from the testimony of Anders, the equipment broker (and defendants appear to agree with this in their reply brief) that a “value in use” estimate could be arrived at by taking a market price and adding to it the other expenses a buyer would incur in putting the machine in use himself. This extra expense would include dismantling, transportation, and re-erection on the buyer’s site.
The Jacobs Company appraisal figures, as explained by the witness Miller, were based on a formulaic “reproduction cost less depreciation” method. Miller admitted that he had not attempted to investigate possible market values for the equipment; that he did not take the necessity of repairs into consideration; and that he had not had a great deal of experience in appraising heavy mining machinery. On the other hand, American Appraisal’s experts examined the items thoroughly on the mine site, although plaintiff’s other three witnesses had not.
Market values generally are the standard to be used in valuing property for tax purposes. It is true that there are instances where no market value can be determined, or where a market value is not truly reflective of an item’s worth. In such situations, valuation methods such as “reproduction cost less depreciation” and “capitalization of income” are helpful. They are not, however, solely determinative of valuation. People ex rel. Wangelin v. City of St. Louis, 367 Ill. 57, 69-70, 10 N.E.2d 369 (1937); and People ex rel. Wangelin v. St. Louis Bridge Co., 357 Ill. 245, 252, 191 N.E. 300 (1934).
Elements such as depreciation, obsolescence and lack of marketability are properly considered in valuing property. (People ex rel. Toman v. Pickard, 377 Ill. 610, 612-13, 37 N.E.2d 330 (1941).) The age of the property, its life expectancy, its income production capabilities, its condition and location are all factors in valuation. (People ex rel. Hellyer v. Hendrickson, 373 Ill. 99, 295 N.E. 507 (1940).) While there is testimony in the record before us as to all these factors, neither the Jacobs appraisal nor plaintiff’s witnesses appear to have taken all such factors into consideration. While estimates of plaintiff’s witnesses cannot be taken as absolutely correct, we believe it certainly can be said about the Jacobs appraisal, in the language of the court in People ex rel. Rhodes v. Turk, 391 Ill. 424, 426 (1945):
“There is nothing in the record to explain the formula. * * * Also, no consideration is given to the age or type of the building, if reproduced, or the desirability or salability of such a building. The assessor does not pretend to give an independent estimate of fair market value. By his sole reliance upon a formula not explained, and not shown to have any relation to market value, the appellee is in the position of having no proof of value in the record, except what appears upon the assessors’s books. If this stood alone, without contradiction, it would be prima facie proof of lawful assessment, but when the assessor testified as to how the value_ was arrived at, together with appellants’ proof, the presumptive effect of the correctness of the assessed valuation is vitiated.”
Paraphrasing the Turk case, it must be said in the instant case that there is nothing in the record to explain the formula. Also, by the reliance of the assessor upon a formula, not explained, and not shown to have any relation to actual cash value, the assessor is not in a position of having any proof of value in the record. There was testimony that the value was arrived at by arbitrarily taking original cost and, so-called, “trending” it up to 1970 to get what is summarily labeled as “replacement cost.” A factor for depreciation is then subtracted. This procedure does not establish “actual cash value,” particularly in light of direct testimony relating to actual cash value of the equipment as submitted by plaintiffs evidence.
As previously noted, the court arrived at a figure between those suggested by the parties. In most cases the court either took the market value suggested by plaintiffs witnesses and added freight and erection costs in order to obtain a total “value,” or else took the Jacobs figures and deducted additional amounts for needed repairs or further depreciation. On review of the record, it appears that the trial court’s figures are more accurate than those suggested by any one appraiser and were arrived at by a method which is proper. Additionally, the court’s finding represents a compromise between conflicting valuations, particularly where the Jacobs and the American Appraisal valuations were demonstrated to be partly erroneous. We find that the court was right in rejecting the method used by the Jacobs company which was not shown of record to be a correct method of determining actual cash value.
We, therefore, agree that the trial court properly found that the valuations established by the Property Tax Appeal Board as to the 11 pieces of heavy machinery were erroneous. To the extent, however, that the circuit court decreed that the figures of “fair cash values” of such property as found by the trial court are binding upon the parties, that portion of the judgment should be modified and such portion should provide for a remandment as hereinafter specified.
. The. valuation of the preparation plant, however, involves a different question. Both parties used a replacement cost-less depreciation method to arrive at the value for the plant of $2.7 million to $2.8 million. Plaintiffs witnesses, however, testified that an absolescence factor had to be considered and that it would reduce the plant’s value for 1970 tax purposes to about $1.6 million. The board refused to apply this obsolescence factor on the ground that it had to do with the coal and not with the plant. The trial court indicated, without persuasive reasons, that it would adopt the American Appraisal figures of $1.6 million. Defendants contend that the trial court could not reject total reliance on the reproduction cost method for equipment and then adopt it for the plant. This, however, was the only method used by either party. Since the plant is realty there is no error in using a different method of assessment from that used for the personal property. People ex rel Toman v. Pickard, 377 Ill. 610, 614 (1941).
The basic question is whether or not the obsolescence factor was properly applied. Mr. Nichols of American Appraisal Company testified that the preparation plant was practically new and in good condition, but because the latest data showed that the mine could not supply nearly as much coal as previously expected, Nichols felt that the obsolescence factor was necessary to arrive at an actual cash value. This would reflect the fact that the plant would necessarily operate at a far lower capacity than the level for which it was constructed. Mr. Miller of the Jacobs Company disputed the use of the obsolescence factor for two reasons: (1) because the problem lay in geological make-up of the mine itself and not with the plant, and (2) because there was no evidence of any coal shortage whatever on April 1, 1970, the date of the assessment (although such evidence was available by the time the actual assessment was made a year later).
The value of realty such as the plant is to be assessed at the assessment date (now January 1 of the tax year and not April 1) and, therefore, subsequent events should have no effect on the value for that particular year. It is clear, contrary to defendant’s assertions, that the availability of coal in the mine is a relevant consideration in determining the plant’s value, since the plant exists for the sole purpose of processing the coal in the Norris mine. Without any coal, the plant has much less value either to Consolidation or to a prospective buyer. However it is phrased, the “income of property” (People ex rel. Toman v. Marine Trust Co., 375 Ill. 488, 493, 31 N.E.2d 933 (1940)), the return on real estate investment (People ex rel. Johnson v. Robison, 406 Ill. 280, 284-5, 94 N.E.2d 151 (1950)), or earning capacity (Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill.2d 428, 431 (1970)), are all normally factors which may be considered in determining fair cash value for tax purposes.
In the cause before us, however, the Tax Board determined, on the basis of conflicting evidence, that it would not be proper to apply the obsolescence factor. Testimony indicated that it was not clear until some time in 1970, that the coal supply in the mine was considerably less than expected. Other testimony was that plaintiff’s loss in the mine in 1970 may have been caused by factors other than the coal supply. The trial court gave no reason for adopting the American Appraisal estimate (which used the obsolescence factor).
On the basis of the record, therefore, we cannot say that the Tax Board’s decision as to the preparation plant was against the manifest weight of the evidence. Accordingly, we reverse the trial court as to the finding of value for the preparation plant and conclude that the Board’s valuation for the preparation plant of $2,659,320 should be reinstated. As to the valuation of the 11 items of machinery, it is clear that the trial court correctly found that the valuation by the Property Tax Appeal Board was constructively fraudulent in its over-valuation. It becomes necessary, therefore, that we remand this cause to the Circuit Court of Fulton County with directions' to remand this cause to the Property Tax Appeal Board with specific directions to establish an actual cash value for the 11 items of machinery on the basis of the record heretofore made in this cause, and in accordance with the views expressed in this opinion.
The order of the trial court is, therefore, reversed, as to the valuation of the preparation plant, and is affirmed as to the determination that the valuation of the 11 items of machinery were improperly established by the Property Tax Appeal Board. As we have indicated, the portion of the order of the trial court decreeing that its valuations of the 11 items of machinery were binding on the parties, we find to be improper. Such portion of the trial court’s order is herewith vacated. It is true that the trial court stated that, on motion of both petitioner and respondent, which was allowed by the trial court, the court stated that it: “* * * makes the following determination as to fair cash value of the items in dispute.” We believe, however, that the joint motion of the parties was intended to be made under the provisions of section 12(3) of the Administrative Review Act (Ill. Rev. Stat. 1973, ch. 110, § 275(3)), pursuant to which the trial court is to make findings of fact or to state propositions of law upon which its judgment is based. While we likewise agree that specific valuations made by the trial court, if such valuations had been made by the Property Tax Appeal Board, would have been proper valuations, we believe that orderly procedure requires that this cause be remanded ultimately to the Property Tax Appeal Board for the purpose of establishing fair cash values, on the record which has been made in this case.
For the reasons stated, therefore, we remand this cause with respect to the valuation of the 11 items of machinery to the Circuit Court of Fulton County with directions to further remand this cause to the Property Tax Appeal Board with specific directions to proceed to make the valuations as to such items of machinery, on the record as heretofore made, and in accordance with the views expressed in this opinion.
Reversed in part, affirmed in part and remanded in part.
STENGEL, J., concurs.