Share-wise application of pre-emptive acquisition provisions: separate co-owner transfers in one agreement cannot be aggregated.

Where co-owners had already partitioned property by metes and bounds and each vendor transferred a separately identified share for separately stated consideration, the pre-emptive acquisition provisions under section 269UD had to be applied share-wise, not by aggregating independent transfers because they were recorded in one agreement. The Delhi HC held that Chapter XX-C operated on the value of the interest actually transferred, so the smaller shares could not be treated as one composite transfer merely due to a single document. Section 269UD(1) could still apply to the larger share whose consideration crossed the statutory threshold, and the acquisition order was therefore sustained only to that extent.

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Issues: Whether, for the purpose of section 269UD of the Income-tax Act, 1961, a single agreement executed by co-owners after partition, with separate consideration stipulated for distinct shares, had to be treated as one transaction or as separate transactions for each share transferred.

Analysis: The property had been partitioned among the co-owners by metes and bounds, and the agreement to sell identified the share of each vendor and the separate consideration payable by each vendee. On those facts, the transferors were dealing only with their own defined shares and not with a single undivided property as a whole. Chapter XX-C was held to operate on the value of the interest actually transferred, and not by aggregating distinct transfers merely because they were recorded in one document. The authority could not lawfully treat several independent transfers as one composite transfer for the purpose of invoking section 269UD, though the transfer by one vendor whose share crossed the statutory limit could still fall within the provision.

Conclusion: The transaction was to be treated as multiple distinct transfers, not as one single transaction. Section 269UD(1) was inapplicable to the transfers of the smaller shares, but remained applicable to the transfer of the larger share held by the vendor whose consideration exceeded the statutory threshold.

Final Conclusion: The impugned acquisition order was set aside to the extent it covered the transfers of the smaller shares, while the proceeding was sustained only in relation to the transfer of the larger share, leaving the matter to be proceeded with afresh in accordance with law.

Ratio Decidendi: Where co-owners have already crystallised their respective shares and each transfer is for a separately identified share with separately stated consideration, the applicability of pre-emptive acquisition provisions must be tested share-wise and cannot be determined by aggregating independent transfers merely because they are embodied in one agreement.

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