M.M.Dutt, J. - (1.) In this appeal, the revenue has challenged the propriety of the judgment of R. M. Datta J. ([1978] 112 ITR 111) whereby the learned judge has made the rule nisi obtained by the respondent No. 1, Smt. Bani Roy Chowdhury, on her application under Article 226 of the Constitution, absolute.
(2.) By a registered conveyance dated December 11, 1972, the respondent No. 1 purchased from the respondent No. 4, the Life Insurance Corporation of India, two plots of laud being plots Nos. 29/NA (E. P.) and 29/NA (W. P.) of Block B of the New Alipore Development Scheme, measuring 7 cottahs, at Rs. 5,000 per cottah. In the conveyance, the respondent No. 5, Hindusthan Building Society Ltd., was the confirming party. The said Society having been the controlled business of the Hindusthan Co-operative Insurance Society Ltd., its assets and liabilities were transferred to and vested in the Life Insurance Corporation of India on the appointed day, namely, September 1, 1956, by virtue of Section 7 of the Life Insurance Corporation Act, 1956. The said conveyance was preceded by an agreement for sale dated January 25, 1972, entered into between the respondent No. 1 and the Hindusthan Building Society Ltd. with the approval of the Life Insurance Corporation of India. Immediately, after such purchase, the respondent No. 1 had improved the land and started construction thereon and also on a contiguous one cottah plot of land purchased by her subsequently from the Life Insurance Corporation of India.
(3.) The respondent No. 1 received two notices, both dated June 18, 1973, issued under Section 269D(1) of the I.T. Act, 1961, by the competent authority wherein it was stated, inter alia, that the competent authority had reason to believe that the immovable property, namely, the said two plots of land, having a fair market value exceeding Rs. 25,000 had been transferred for an apparent consideration which was less than the fair market value of the property, that the competent authority had also reason to believe that the fair market value of the property exceeded the apparent consideration thereof, by more than 15% of such apparent consideration, and that the consideration for such transfer as agreed to by and between the transferor and the transferee had not been truly stated in the said instrument of transfer with the object of facilitating the reduction or evasion of liability of the transferor to pay tax in respect of an income arising from the transfer and/or facilitating the concealment of any income or any monies or other assets which had not been paid or which ought to have been disclosed by the transferee for the purpose of the Indian I.T. Act, 1922, the I.T. Act, 1961 or the W.T. Act, 1957. The competent authority, as stated in the said notices initiated proceedings in pursuance of Section 269C of the I.T. Act, 1961, by issuing the said notices to the Life Insurance Corporation of India, Hindusthan Building Society Ltd., and to the respondent No. 1, Smt. Bani Roy Chowdhury. Both the Life Insurance Corporation of India and the Hidusthan Building Society Ltd. were described as transferors and the respondent No. 1 was described as the transferee. Further, it was stated that objections, if any, to the acquisition of the said property should be made within the time as specified in the notices.;