Reason to believe for acquisition proceedings must rest on tangible material, not unsupported market-value assumptions.

Initiation of acquisition proceedings under Chapter XX-A required the competent authority to record a reasoned belief, based on relevant and tangible material, that the immovable property's fair market value exceeded the apparent consideration by the prescribed margin before issuing notice under section 269D. A belief founded on general impression, unsupported assumptions, or an untested valuation approach was insufficient. Here, the reasons relied on a comparable sale and an assumed rate escalation for semi-commercial property, but the assumption lacked supporting material and the transferee's valuer's report was not meaningfully considered. The absence of tangible material meant the statutory precondition for initiation was not met, and the acquisition proceedings were not sustainable.

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Issues: Whether the initiation of acquisition proceedings under Chapter XX-A of the Income-tax Act was valid when the competent authority formed the requisite belief without relevant and tangible material supporting the fair market value estimate.

Analysis: The statutory scheme required the competent authority to record reasons to believe that the immovable property's fair market value exceeded the apparent consideration by the prescribed margin before issuing notice under section 269D. Such belief had to rest on some relevant material; it could not be based on general impression, mere surmise, or an ipse dixit assessment. The reasons recorded relied substantially on a comparable sale instance and an assumed doubling of rates for semi-commercial property, but no supporting material was shown for that assumption and the approved valuer's report furnished by the transferee was not meaningfully considered. The absence of tangible material meant that the statutory precondition for initiation was not satisfied.

Conclusion: The initiation of acquisition proceedings was invalid, and the challenge to the Tribunal's setting aside of the acquisition order failed.

Final Conclusion: The appeal was dismissed, as the acquisition proceedings under Chapter XX-A could not be sustained in the absence of a legally supportable basis for the recorded belief.

Ratio Decidendi: A statutory belief for initiation of acquisition proceedings must be founded on relevant and tangible material, and not on conjecture, general perception, or unsupported assumptions as to market value.

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