1995 (6) TMI 10 - HC - Income Tax

Court upholds fair market value determination under Income-tax Act despite petitioner's challenges.

The court upheld the appropriate authority's determination of fair market value under section 269UD(1) of the Income-tax Act, 1961, despite the ... Appropriate Authority, Auction Sale, Finding Of Fact, Immovable Property By Central Government, Movable Property, Writ Petition Issues:Challenge to order under section 269UD(1) of the Income-tax Act, 1961 regarding fair market value determination based on apparent consideration. Validity of auction sale price compared to valuation for transfer of office premises.Analysis:The petitioner filed a petition challenging the order passed by the appropriate authority under section 269UD(1) of the Income-tax Act, 1961, regarding the transfer of office premises. The Valuation Officer inspected the property and found the apparent consideration inadequate. The appropriate authority determined the fair market value to be Rs. 41,10,000, exceeding the declared consideration by more than 15%. The petitioner sought rectification, but the application was disposed of. The petitioner moved the court for an ad interim stay of the auction, which was initially granted but later vacated at the petitioner's request. Consequently, the auction proceeded, and the property was sold to a third party. The petitioner contended that the auction price of Rs. 1,00,92,000 indicated the earlier valuation was incorrect, citing a previous sale at a lower rate per sq. foot. However, the court found no merit in the petitioner's contentions due to their conduct in allowing the auction to proceed and creating rights in a third party. The court declined to exercise writ jurisdiction based on these grounds.The court further held that the authority's decision on fair market value was a factual finding based on evidence and could not be disturbed through writ jurisdiction. The court rejected the argument that the instances cited by the authority were not comparable, emphasizing that precise valuation was not always possible. The court dismissed the petitioner's claim that the property's location influenced its value, stating that the commercial nature of the area made all properties valuable. Ultimately, the court found no infirmity in the appropriate authority's order and summarily dismissed the petition. The petitioner's request for maintenance of status quo was also refused by the court.