Pre-emptive purchase under section 269UD requires objective comparable sales analysis; failure to do so vitiates the order.

An order of pre-emptive purchase under section 269UD was held unsustainable where the appropriate authority failed to base its satisfaction on objective material and did not properly evaluate relevant comparable sale instances. The authority relied on one later sale, rejected earlier sales without applying a consistent price-rise adjustment, and treated same-society flats as non-comparable for an incorrect reason. It also did not adequately address factors such as earlier token payment, building condition, claimed FSI difference, and the basis for deduction. The order was quashed because valid satisfaction under section 269UD requires positive, reasoned findings on relevant comparable material showing understatement of consideration.

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Issues: Whether the order of pre-emptive purchase under section 269UD of the Income-tax Act, 1961 was sustainable when the appropriate authority ignored relevant comparable sale instances and did not base its satisfaction on objective material showing understatement of consideration by more than 15 per cent.

Analysis: The authority relied heavily on one later sale instance while rejecting earlier sale instances cited by the transferor and transferee on the ground of price rise, but did not apply the same price-rise adjustment consistently to the relied-upon instance. It also declined to treat flats sold in the same society as comparable merely because the consideration was below the threshold for pre-emptive purchase, whereas the proper inquiry was comparability, not jurisdiction to purchase. The order further failed to deal adequately with relevant factors such as the earlier token payment, the condition of the building, the claimed FSI difference, and the basis for allowing a 14 per cent deduction. The satisfaction under section 269UD had to rest on objective facts and positive reasons, not merely on rejection of the parties' submissions.

Conclusion: The impugned order was illegal and liable to be quashed because the authority did not consider relevant comparable instances on a proper legal basis and did not record a valid objective satisfaction of understatement.

Final Conclusion: The challenge succeeded, the pre-emptive purchase order was set aside, and consequential clearance formalities were directed to be completed.

Ratio Decidendi: An order under section 269UD can be sustained only if the appropriate authority reaches a positive, objective, and reasoned satisfaction on relevant comparable material that the apparent consideration is understated; failure to consider or properly evaluate comparable sale instances vitiates the order.

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