Chapter XXA acquisition depends on valid notice and a proven market value margin above apparent consideration.

Chapter XXA acquisition requires both a valid initiation based on recorded material and satisfaction of the statutory value threshold. Publication of notice in the official gazette is treated as the initiation requirement, while later individual notices under section 269D(2) are procedural and do not vitiate proceedings absent prejudice where the parties had knowledge and participated. On valuation, the property must be assessed as a whole using comparable sales, appropriate deductions for encumbrances and building condition, and realistic adjustments for depreciation and fittings. Scrap value is inappropriate. If the fair market value does not exceed the statutory margin over the apparent consideration, the acquisition cannot stand and the presumption of understatement is rebutted on the facts.

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Issues: (i) Whether the initiation and continuation of acquisition proceedings under Chapter XXA were invalid for want of proper satisfaction and for alleged non-compliance with section 269D(2); (ii) Whether the fair market value of the property exceeded the apparent consideration so as to attract acquisition under Chapter XXA.

Issue (i): Whether the initiation and continuation of acquisition proceedings under Chapter XXA were invalid for want of proper satisfaction and for alleged non-compliance with section 269D(2).

Analysis: The recorded reasons showed that the competent authority had material before it when proceedings were initiated. Publication of notice in the official gazette under section 269D(1) constituted the condition precedent for initiation. The later or individual notices contemplated by section 269D(2) were held to be procedural, and their non-issue at the relevant stage did not vitiate the proceedings where the parties had knowledge of the matter, participated in it, and suffered no prejudice.

Conclusion: The objection to validity of initiation and notice was rejected and was against the assessee.

Issue (ii): Whether the fair market value of the property exceeded the apparent consideration so as to attract acquisition under Chapter XXA.

Analysis: The property was valued as a combined whole, with the land and building assessed on the basis of comparable sales, encumbrance deduction, and the condition of the building. The scrap-value approach was found inappropriate. A reasonable deduction was allowed for the building standing on the land, and the building valuation was adjusted by rejecting excessive escalation, excess additions for electrical fittings and external services, and by allowing depreciation. On the resulting figures, the fair market value was found to be only a little above one lakh rupees and not sufficiently above the apparent consideration to satisfy the statutory threshold. Even assuming the deeming provision applied, the statutory presumption was treated as rebutted on the facts.

Conclusion: The statutory conditions for acquisition were not satisfied and the acquisition orders were unsustainable, in favour of the assessee.

Final Conclusion: The acquisition proceedings could not be sustained because the statutory threshold for invoking Chapter XXA was not met on the facts, and the presumption under section 269C did not survive the evidentiary rebuttal.

Ratio Decidendi: Acquisition under Chapter XXA cannot be upheld unless the fair market value exceeds the statutory margin over the apparent consideration, and where the statutory presumption of understatement is rebutted on the evidence, the acquisition order must fail.

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