DATTARAM BHIKAI TELGE Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) The petitioners have challenged the order passed under Section 269UD(1) of the IT Act, 1961 by the Appropriate Authority for purchase of the property belonging to the petitioner Nos 1 and 2 and agreed to be sold to the petitioner Nos. 3 and 4.

(2.) To state in brief, admitted facts are that petitioner Nos. 1 and 2, being brothers inter se, hold the property situated at Ghatla Village, Chembur. The property bears plot No. 565 and is having total FSI 870.8 sq. mtrs. The petitioner Nos. 1 and 2 hold half share each in the same. Petitioner Nos. 1 and 2 separately entered into development agreement with petitioner Nos. 3 and 4 and the consideration of the property to be sold was fixed at Rs. 26 lakhs each. As per the agreement, the petitioner Nos. 3 and 4 were to construct and give one flat of 988 sq. ft. area to each of the petitioner Nos. 1 and 2. The value of the construction was about Rs. 6 lakhs. They were also to be provided with alternative accommodation till the said flat could be ready and given to them. The period for development and construction of flat was fixed at 18 months and the approximate rent for the alternative accommodation to be provided to each of them was assessed at Rs. 4,000 per month. The agreement with petitioner No. 1 was entered into on 20-4-1994 and the agreement with petitioner No. 2 took place on 17-5-1994. As per the provisions of Section 269UC, the statements in the prescribed proforma were submitted by the petitioners to the respondent No. 1--Appropriate Authority. On 12-8-1994, the Appropriate Authority issued show-cause notice to the petitioners as to why the said property should not be purchased by the Central Government by passing an order under Section 269UD(1) of the Income Tax Act. According to the Appropriate Authority, the consideration as per the agreement between the parties was much less than the market value. The respondent No. 1 quoted three different transactions in the show-cause notice in support of the view taken by him. The petitioners submitted their reply to the show-cause notice and explained that the transactions in respect of the three properties quoted in the show-cause notice were not relevant taking into consideration the area in which they were located and the nature of the properties in comparison, to the property to be sold by the petitioner No. 1 and 2 to the petitioner Nos. 3 and 4. They also relied upon certain transactions to show that the consideration fixed by them was certainly not less than the market value and it was slightly higher than the consideration in those transactions. It was pointed put that the highest consideration in a transaction dated 28-2-1994 was around Rs. 840 per sq. ft FSI, while as per the calculation made by the petitioners, the consideration in their transaction comes to Rs. 1,017 per sq. ft. of the FSI. They contended that the valuation report, showing the consideration in the present case at Rs. 932 per sq. ft. of FSI was not correct.

(3.) After hearing the petitioners, the respondent No. 1 passed the impugned orders dated 30-8-1994 under Section 269UD(1) of the Income Tax Act and directed that the share of the petitioner No. 1 in the property be purchased for consideration of Rs. 18,70,340 and the share of the petitioner No. 2 be purchased for Rs. 18,68,430. Accordingly, order was issued on the same day to the petitioner Nos. 1 and 2 to handover the necessary documents and the possession of the property to the Appropriate Authority. These two orders have been assailed in the present petition by the transferors and the transferees.