Acquisition proceedings require valid initiation, timely Gazette publication, and valuation based on the agreement date with property restrictions considered.

Acquisition proceedings under Chapter XX-A required cogent material at initiation to justify the statutory belief that consideration was understated; a mere valuation difference was insufficient, so initiation was invalid. Gazette publication completed only when the Official Gazette became publicly available, and delay beyond the prescribed period meant the proceedings were not validly commenced. An unregistered agreement to sell was not void and retained limited evidentiary value where it was acted upon through subsequent events. For fair market value, the relevant date was the agreement date, with urban land ceiling restrictions, litigation, and genuine comparable sales to be considered in the valuation exercise, leading to a downward adjustment.

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Issues: (i) whether the initiation of acquisition proceedings was valid and whether the statutory presumptions were available at the stage of initiation; (ii) whether the notice in the Official Gazette was published within time and validly commenced the proceedings; (iii) whether the unregistered agreement to sell dated 17 November 1975 had evidentiary value and remained binding on the parties; (iv) which date was relevant for determining fair market value and whether urban land ceiling restrictions, litigation and comparable sales had to be taken into account.

Issue (i): Whether the initiation of acquisition proceedings was valid and whether the statutory presumptions were available at the stage of initiation.

Analysis: The initiation had to rest on cogent material showing a legally sustainable basis for the belief that the apparent consideration was understated and that the transfer was with the object specified in Chapter XX-A. The record showed that the valuation report relied upon by the Revenue related to the later date of registration and not to the date of the agreement to sell. At the initiation stage, the required presumption under the statutory scheme was not available merely because a difference in valuation was asserted. The reasoning adopted by the Authority failed to supply the necessary foundation for a valid belief.

Conclusion: The initiation of acquisition proceedings was invalid and the presumptions were not available at the initiation stage.

Issue (ii): Whether the notice in the Official Gazette was published within time and validly commenced the proceedings.

Analysis: The statutory notice was printed in the Gazette on 26 October 1985, but the Gazette was made available to the public only on 1 November 1985, which was beyond the prescribed period. For proceedings under the acquisition chapter, publication is complete only when the Gazette becomes available to the public. Since the statutory requirement was not satisfied within time, jurisdiction to continue the proceedings was not properly acquired.

Conclusion: The Gazette publication was belated and the acquisition proceedings were invalid.

Issue (iii): Whether the unregistered agreement to sell dated 17 November 1975 had evidentiary value and remained binding on the parties.

Analysis: Although the agreement was unregistered, it was admitted to have existed and was acted upon through subsequent nomination, correspondence, litigation and the compromise decree of the High Court. Section 269F(9) of the Income-tax Act, 1961 excludes an unregistered agreement for a limited evidentiary purpose, but it does not render the agreement void or ineffective. In the facts of the case, the document remained the root of the transaction and could not be ignored.

Conclusion: The agreement to sell had evidentiary value and remained binding until the High Court decree.

Issue (iv): Which date was relevant for determining fair market value and whether urban land ceiling restrictions, litigation and comparable sales had to be taken into account.

Analysis: The relevant date for valuation was the date of the agreement to sell, not the later date of registration, because the subsequent transaction flowed from the earlier bargain and the consideration had to be assessed in that setting. The property was affected by urban land ceiling restrictions, pending and concluded litigation for specific performance, and other disadvantageous features that reduced its market value. The comparable sales had to be genuine, proximate in time and situation, and adjusted for plus and minus factors; the instances relied upon by the Revenue were not the proper comparables in the peculiar facts.

Conclusion: The agreement date was the relevant valuation date, and the valuation had to be scaled down after accounting for the encumbrances and restrictions.

Final Conclusion: The acquisition order could not be sustained, the proceedings were vacated, and the appeals were allowed.

Ratio Decidendi: In acquisition proceedings, initiation must be supported by material sufficient to found the statutory belief at the relevant stage, publication in the Official Gazette is complete only upon public availability, and an unregistered agreement to sell may still be relied upon for limited evidentiary purposes to determine the true valuation context, especially where the property is burdened by statutory restrictions and litigation.

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