Compulsory purchase under Chapter XX-C failed where fair market value was not determined and undervaluation was not proved by comparable sales.

A compulsory purchase order under Chapter XX-C could not be sustained without a determination of fair market value and proof that the agreed consideration was lower by 15% or more. The sale instances relied on were not properly comparable because the stated disadvantages of the flat, including its location, floor position, absence of sea view, and lack of similar amenities, were not adequately tested. Nearby approved sale instances from the same locality and building were not convincingly distinguished, so the statutory basis for finding undervaluation was absent and the acquisition order was quashed.

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Issues: Whether the purchase order under Section 269UD(1) of the Income-tax Act, 1961 could be sustained where the fair market value of the property was not determined and the alleged undervaluation was not established on the basis of comparable sale instances.

Analysis: The authority could invoke Chapter XX-C only on a finding that the agreed consideration was lower than the fair market value by 15% or more. Since the fair market value was not determined, the statutory basis for concluding undervaluation was absent. The sale instances relied upon were not properly tested against the stated disadvantages of the flat in question, such as location, floor position, absence of sea view, and lack of comparable amenities. The petitioners also relied on nearby approved sale instances from the same locality and even the same building, and those comparables were not convincingly distinguished.

Conclusion: The purchase order could not be sustained and was liable to be quashed.

Final Conclusion: The impugned acquisition order was set aside because the statutory requirement of establishing undervaluation with reference to fair market value was not satisfied.

Ratio Decidendi: An order of compulsory purchase under Chapter XX-C cannot stand unless the authority determines fair market value and demonstrates undervaluation of 15% or more on the basis of properly comparable sale instances.

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