TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court dismisses property sale confirmation demand, upholds pre-emptive purchase order under Income Tax Act</h1> <h3>Anand Mehta & Anr. Versus Union of India & Ors.</h3> Anand Mehta & Anr. Versus Union of India & Ors. - [2016] 385 ITR 379 Issues Involved:1. Confirmation of the sale of property.2. Determination of fair market value.3. Validity of the pre-emptive purchase order.4. Rights of successful bidders in public auctions.5. Refund of earnest money with interest.Issue-wise Detailed Analysis:1. Confirmation of the Sale of Property:The petitioners participated in an auction held on 15th February 1995 and offered the highest bid of Rs. 1.4 crores. Despite depositing 25% of the reserve price, the sale was not confirmed due to the pendency of WP (C) No. 524/1995. The court noted that the petitioners were always ready and willing to pay the balance amount but were unable to do so due to the writ petition by Mr. Raghbir Singh. The court ultimately held that the petitioners could not insist on the confirmation of the sale in their favor as there was no formal acceptance of their bid, in line with the legal position explained in U.P. Avas Evam Vikas Parishad v. Om Prakash Sharma.2. Determination of Fair Market Value:The Appropriate Authority determined the fair market value of the property at Rs. 73,72,495, which exceeded the declared consideration by 30.48%. The court upheld this determination, noting that adjustments for the time gap and FAR were reasonable, although they might be considered high. The court found no plausible explanation for the large gap between the declared consideration and the fair market value, affirming the pre-emptive purchase order.3. Validity of the Pre-emptive Purchase Order:The petitioners challenged the pre-emptive purchase order under Section 269 UD (1) of the Income Tax Act, 1961. The court upheld the order, stating that the sale consideration did not represent the fair market value and the conditions of Section 269 UD were satisfied. The property vested in the Central Government and was put to public auction.4. Rights of Successful Bidders in Public Auctions:The court referred to the Supreme Court's decision in U.P. Avas Evam Vikas Parishad, which stated that bidders in public auctions have no vested right to demand the transfer of property unless their bid is formally accepted. The court emphasized that the auction was only an invitation to offer, and no concluded contract came into existence without formal acceptance.5. Refund of Earnest Money with Interest:The petitioners sought a refund of the earnest money deposited, citing a letter dated 11th October 2004. The court directed the ITD to return the earnest money of Rs. 16.25 lakhs along with interest at 12% per annum from 15th February 1995 till the date of refund. The court found it reasonable to grant this relief considering the long delay in rejecting the petitioners' bid.Conclusion:The court dismissed the petitioners' demand for confirmation of the sale but directed the ITD to refund the earnest money with interest, acknowledging the prolonged delay in resolving the matter. The court upheld the pre-emptive purchase order and emphasized the need for a re-auction to determine the current market value of the property.
TaxTMI 