Prima facie belief for acquisition may suffice at initiation, but unrebuted valuation evidence can still defeat the merits.

For initiation of acquisition proceedings under Chapter XXA, the Competent Authority needed only a prima facie belief under Section 269C(1) read with Section 269C(2), and the jurisdictional challenge failed. On merits, however, the acquisition order could not stand because the transferee's valuation evidence and the Government valuer's report were expert material with probative value, and there were no reliable comparable sale instances or other adequate rebuttal to displace them. In those circumstances, the apparent consideration was treated as the fair market value, the basis for acquisition was not established, and the acquisition order was quashed.

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Issues: (i) whether the Competent Authority had valid prima facie reasons to believe for initiating acquisition proceedings under Chapter XXA of the Income-tax Act, 1961; (ii) whether the order acquiring the property under Section 269F(6) could be sustained on merits in the absence of reliable rebuttal to the transferee's valuation evidence.

Issue (i): Whether the Competent Authority had valid prima facie reasons to believe for initiating acquisition proceedings under Chapter XXA of the Income-tax Act, 1961.

Analysis: The recorded reasons were required to satisfy the statutory threshold of belief contemplated by Section 269C(1) read with Section 269C(2). The material before the Competent Authority need not establish the matter with mathematical precision at the initiation stage. It is sufficient if the belief is formed on a prima facie basis and is not vitiated merely because the material is later found to be imperfect or inadequate in detail.

Conclusion: The assumption of jurisdiction for initiation of acquisition proceedings was upheld and was in favour of the Revenue.

Issue (ii): Whether the order acquiring the property under Section 269F(6) could be sustained on merits in the absence of reliable rebuttal to the transferee's valuation evidence.

Analysis: The valuation reports furnished by the transferee and the Government valuer were expert opinions carrying probative value and could not be discarded lightly. In the absence of comparable sale instances from the same locality or other material rebutting those reports, the Competent Authority's subjective valuation was insufficient to displace the evidence based on comparable cases. On the facts, the apparent consideration was held to represent the fair market value, and the basis for acquisition was not established.

Conclusion: The acquisition order was quashed and the issue was decided in favour of the assessee.

Final Conclusion: The challenge to jurisdiction failed, but the acquisition on merits failed, resulting in a partial allowance of the appeals and setting aside of the acquisition order.

Ratio Decidendi: For initiation under Chapter XXA, only a prima facie belief is required, but an acquisition order cannot be sustained where expert valuation evidence based on comparable sales is ignored without adequate rebuttal material and the fair market value is not proved beyond the apparent consideration.

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