- (1.) The question that falls for consideration in this appeal by special leave against the judgment of the Madras High court dated 21/6/1996 relates to he interpretation of the provisions of sub-section (4 of Section 269-UC of he Income Tax Act, 1961 (hereinafter referred to as 'the Income Tax Act'). section 269-UC is contained in Ch. XX-C relating to purchase by the central government of immovable properties in certain cases of transfer.
(2.) On 7/9/1995 the appellant entered into an agreement with the executors of Shri S. R. Unger for the purchase of urban property in the city of Madras (now Chennai) for a sum of Rs 5,50,00,000. 00. The extent of the property is 23.5 grounds comprising 5239 sq mt of vacant land and 954 sqmt of built-up area. On the same date, i. e. , 7/9/1995, an application in Form No. 37-1 was filed before the appropriate authority, Madras. The appropriate authority addressed a letter dated 30/10/1995 to the intending transferors and transferees seeking certain clarifications in respect of nine points mentioned in the said letter. One of the said points was that the extent of the property under transfer is about 24 grounds which includes 8. 01 grounds for which acquisition under the Tamil Nadu Urban Land (Ceiling and Regulation) Act (hereinafter referred to as "the Urban Ceiling Act") is in force and the stay order has been granted by the High court and that the total consideration towards the entire land is inclusive of the portion affected under the said Act. The appellant submitted his reply to the said objections but the appropriate authority, by order dated 11/12/1995, held that in view of the prohibition in Section 6 of the Urban Ceiling Act the agreement entered into between the parties on 7/9/1995 to transfer the entire land, including the excess vacant land of 2.284.5 sq mt, shall be deemed to be null and void. In said order it was also stated that the matter was already sub judice vide writ Petition No. 16211 of 1991 and that in view of the said petition the members of the appropriate authority could not effectively exercise theirpowers with regard to pre-emptive right to purchase the subject property and, therefore, the same has been lodged in the office. It was further stated that the petitioner, if so advised, may file a fresh Form No. 37-1 for transfer of the balance land or after finality was reached with regard to the excess vacant land. Feeling aggrieved by the said order, the appellant filed a writ petition (WP No. 17773 of 1995 in the Madras High court which was allowed by a learned Single Judge by his judgment dated 3/4/1996. The learned Single Judge directed the respondents to reconsider the matter and pass the appropriate orders keeping in view the said judgment.
(3.) The respondent filed an appeal (WA No. 429 of 1996 against the said judgment of the learned Single Judge which has been allowed by the division bench of the High court by the impugned judgment dated 21/6/19966. The High court has held that keeping in view Ss. (4 of Section 269-UC, the order passed by the appropriate authority was valid since the agreement was unenforceable and void being in violation of the provisions of Section 6 of the Urban Land Ceiling Act. Feeling aggrieved by the said judgment of the division bench of the High court the appellant has filed this appeal.;