Chapter XX-C on co-owned property requires sharewise consideration, and undisclosed valuation material cannot sustain pre-emptive purchase.

In a co-owned transfer, Chapter XX-C is attracted by the consideration attributable to each co-owner's share, not by the aggregate consideration for the whole property; where each share was below the statutory threshold, the jurisdictional basis for pre-emptive purchase failed. The order was also vitiated because the valuation material and supporting particulars relied on by the authority were not fully disclosed, denying a fair opportunity to meet the case. The finding of undervaluation and intent to evade tax was unsustainable because the land-rate fixation lacked a cogent disclosed basis and the adverse inference drawn was inconsistent with the recorded facts.

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Issues: (i) Whether Chapter XX-C could be invoked where co-owners executed one agreement but each transferor's share of the apparent consideration was below the statutory limit; (ii) Whether the impugned order was vitiated for breach of natural justice by non-supply of the full valuation material relied upon by the appropriate authority; (iii) Whether the finding of undervaluation and intent to evade tax was sustainable in the absence of reasons and on the facts recorded.

Issue (i): Whether Chapter XX-C could be invoked where co-owners executed one agreement but each transferor's share of the apparent consideration was below the statutory limit.

Analysis: The property was jointly owned, each co-owner had a defined undivided share, and the material showed that the consideration attributable to each share was below the prescribed threshold. The fact that the parties used a single conveyance and filed one form did not alter the legal character of the transfer, because each co-owner was transferring only his or her own share. The reasoning adopted followed the view that Chapter XX-C is attracted by the consideration for each co-owner's share and not by the aggregate consideration of all co-owners together.

Conclusion: The provisions of Chapter XX-C were not attracted, and the jurisdictional objection succeeded in favour of the assessee.

Issue (ii): Whether the impugned order was vitiated for breach of natural justice by non-supply of the full valuation material relied upon by the appropriate authority.

Analysis: The show-cause notice referred to valuation reports and comparable instances, but the detailed valuation material containing the basis of comparison and the measurements used for fixation of land rate was not supplied. Since the authority relied on that material to draw an adverse presumption, the affected parties were entitled to know the full material and meet it effectively. A fair hearing required disclosure of the evidence forming the foundation of the proposed order, and non-disclosure of the relevant report and supporting particulars created real risk of prejudice.

Conclusion: The order was vitiated for denial of a fair opportunity to meet the material used against the petitioner, and this issue was decided in favour of the assessee.

Issue (iii): Whether the finding of undervaluation and intent to evade tax was sustainable in the absence of reasons and on the facts recorded.

Analysis: The order fixed a land rate without disclosing a cogent basis for the reduction made, and the reasoning for the final figure was not traceable from the record supplied. The authority also drew an adverse inference from an earlier transaction of the transferee in a manner that was inconsistent with the factual position already accepted by it. The combined effect of non-disclosure, lack of reasoned valuation, and unsupported inference rendered the conclusion that the apparent consideration was understated by more than the statutory margin unsustainable.

Conclusion: The finding of undervaluation and the presumption of intent to evade tax could not be sustained, and the issue was decided in favour of the assessee.

Final Conclusion: The impugned pre-emptive purchase order could not stand because the transaction fell outside the jurisdictional reach of Chapter XX-C on the facts found, and the decision-making process was also vitiated by denial of a fair hearing and unsupported valuation findings.

Ratio Decidendi: In a transfer by co-owners, Chapter XX-C is not attracted where each co-owner's share of the apparent consideration is below the statutory limit, and any adverse order based on valuation must be supported by full disclosure of the material relied upon and a reasoned determination.

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