TaxTMI 
TaxTMI 
TaxTMI 
2004 (5) TMI 30
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....le property purchased under section 269UD(1) stands revested in the petitioner as per section 269UH(1) of the Act. Accordingly, it is submitted that the orders passed under Chapter XX-C of the Act which are impugned in the petition are liable to be quashed and set aside. The petitioner is a company incorporated under the Companies Act, 1956. The petitioner inter alia, owned a plot of land admeasuring 1446 square metres together with a structure consisting of ground, first and second floor situated at Andheri-Kurla Road, Sakinaka, Bombay-400 072. By an agreement dated June 24,1989, the petitioner had agreed to sell the aforesaid property to H. Parson Private Limited (hereinafter referred to as "the purchaser"), at a total consideration of Rs. 74,00,000. On execution of the said agreement, the petitioner had received a sum of Rs. 4,00,000 from the purchaser and the balance amount of Rs. 70,00,000 was to be paid by the purchaser on completion of the sale. As per the agreement, the purchase was to be effected within one month from the date of receiving the no objection certificate from the appropriate authority. Under the said agreement pocket expenses, stamp duty and registration fe....
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....of the aforesaid amount of Rs. 5,06,200 from the total consideration was in accordance with law and there is no mistake apparent from the record which could be rectified under section 269UJ of the Income-tax Act. Challenging the aforesaid orders passed by the appropriate authority under section 269UD(1) dated August 29, 1989, as well as the order dated February 22, 1990, passed under section 269UJ of the Income-tax Act, the present petition has been filed. To complete the narration of facts, it may be noted that on March 23, 1990, the above purchased property was auctioned by the appropriate authority and on completion of the auction sale the auction purchaser was put in possession of the said property on June 8, 1990. Thereafter, some time in July, 1990, the present writ petition was filed and the same was admitted on August 21, 1990, without any interim relief. Subsequently, on November 16, 1990, conveyance of the property has been executed by the appropriate authority in favour of the auction purchaser. Mr. Mistry, the learned advocate appearing on behalf of the petitioner, submitted that the order passed by the appropriate authority under section 269UD(1) of the Income-tax Ac....
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....writ petition challenging the order passed under section 269UD(1) was filed on September 11, 1990, and pursuant to the interim order passed in the above writ petition, the said property was sold in auction held on January 6,1994. At the final hearing of the said writ petition, on behalf of the Central Government it was contended that the transaction being a concluded transaction, the case was covered by the excluded category carved out by the apex court in C.B. Gautam's case [1993] 199 ITR 530 and that the main decision given by the apex court was not applicable. Rejecting the above contention, this court held that it was not a case of a completed transaction because, in that case: (i) the writ petition was filed long prior to the pronouncement of the law by the Supreme Court in C.B. Gautam's case [1993] 199 ITR 530, (ii) the refund of earnest money was accepted under protest, (iii) the writ court was approached within three months from the date of the passing of the purchase order, and (iv) the auction sale was held during the pendency of the writ petition pursuant to the interim order passed in the writ petition. Strongly relying upon the above judgment of this court in the ....
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....he entire consideration to the petitioner on or before September 30, 1989. However, in the present case, a sum of Rs. 5,06,200 was deducted from the total consideration of Rs. 74,00,000 and only a sum of Rs. 68,93,800 (Rs. 64,93,800 to the petitioner and Rs. 4,00,000 to the purchaser) was paid on September 27, 1989. Since, the whole of the amount of consideration has not been paid to the petitioner on or before September 30, 1989, as per section 269UH(1), the order passed under section 269UD(1) stood abrogated and the purchased property stood revested in the petitioner. Accordingly, it was submitted that this court be pleased to declare that the order dated August 29, 1989, passed under section 269UD(1) of the Act stood abrogated and the purchased property revested in the petitioner. Mr. Mistry further submitted that the deduction of the amount of Rs. 1,33,700 by way of discounting charges from the total consideration was not authorised under the Act. According to Mr. Mistry, where the Central Government decides to purchase an immovable property in respect of which an agreement for sale is entered into by and between the vendor and the purchaser, then as per section 269UA(b) of th....
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....ipulated time would abrogate the order passed under section 269UD(1) of the Act so as to revest the H property in favour of the transferor. In the facts of that case, the apex court held as follows: "The plain language of section 269UG(1) leaves no doubt that in the facts and circumstances of the case, as a result of non-payment of the balance amount of Rs. 50 lakhs in terms of the express requirement of section 269UG(1), the failure of the Central Government has resulted in attracting section 269UH of the Act. Accordingly, the order dated January 27, 1994, made under section 269UD(1) by the appropriate authority stood abrogated and the property was revested in the transferor in terms of sub-section (1) of section 269UH of the Act with any other consequential resultants including those specified in sub-section (2) of section 269UH and sub-section (3) of section 269UG." In the light of the aforesaid decision of the apex court, Mr. Mistry submitted that, in the present case, deduction of the amount of Rs. 1,33,700 towards discounting charges was unauthorised and since the said amount has not been paid to the petitioner within the stipulated time, the order passed under section 269U....
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.... liable to be quashed and set aside. Mr. Asokan, the learned advocate appearing on behalf of the respondents submitted that in the present case, before filing the petition, not only the possession of the property was taken by the appropriate authority, but even the auction sale has been completed and the auction purchaser has been put in possession of the property purchased under section 269UD(1) of the Act. He submitted that in the light of the decision of the apex court in the case of C.B. Gautam [1993] 199 ITR 530 the case of the petitioner being a concluded transaction no interference is called for in exercise of writ jurisdiction. Mr. Asokan further submitted that the principle of discounting has been upheld by the apex court in the case of Ratnesh Bhai J. Patel [2001] 247 ITR 182 and, therefore, no fault can be found with the deduction of the amount of Rs. 1,33,700 from the apparent consideration on account of discounting. As regards the deduction of the amount of Rs. 3,72,500 on account of stamp duty and registration charges, it was submitted that in view of the decision of this court in the case of Polycon Paper Ltd. [2002] 253 ITR 182 the appropriate authority would refu....
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....o the orders of this court and that sale having taken place and this court having affirmed the same and the proceedings by way of special leave petition filed under article 136 of the Constitution coming to an end as having become infructuous, the High Court could not have brushed aside that sale in the manner it has been done. The impact of such decision ought to have been taken note of by the High Court. Indeed in K. Basavarajappa v. Tax Recovery Commissioner [1997] 223 ITR 297 this court has held that an agreement to sell creates no interest in the property and in the absence of a decree of specific performance of an agreement even though authorised by the general power of attorney holder of the original owner of the property had no locus standi to move an application for setting aside the auction sale on offer to deposit full tax dues. If we extend the said principle to the present facts, we find it hardly possible to come to the conclusion the High Court has arrived at. It is possible that the writ proceedings were still pending before the High Court but those writ proceedings were not at the instance of the owner of the subject property and the agreement holder did not have a....
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....re the transferor without demur allowed the property to be sold and the sale has been confirmed whether during the pendency of the writ petition or not, then such transactions should not be disturbed by the courts. In the present case much before the decision of the apex court in the case of C.B. Gautam's case [1993] 199 ITR 530, possession of the property was taken, the apparent consideration determined has been paid and accepted by the petitioner and the said property has been auctioned and the auction purchaser has been put in possession of the property. Therefore, the case of the petitioner clearly falls under the category of completed transactions and hence the order passed under section 269UD cannot be assailed on the ground of violation of the principles of natural justice. The contention of the petitioner that the appropriate authority could not have deducted a sum of Rs. 1,33,700 from the total consideration by way of discounting and because of the failure to pay the said amount of Rs. 1,33,700 within the stipulated time, the order passed under section 269UD(1) stood abrogated is also without any merit. The consistent view taken by this court as well as the apex court is ....
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....x court it is futile on the part of the petitioner to contend that there is no provision under the Income-tax Act for discounting the price mentioned in the agreement of transfer. In the present case, under the sale agreement the purchase was to be effected within one month from the date of receiving no objection certificate from the appropriate authority. Under section 269UD(1) an order for purchase by the Central Government cannot be made after the expiration of a period of two months from the end of the month in which the requisite statement is received by the appropriate authority. Thus, the discounting of the consideration amount specified in the sale agreement by three months is justified. The petitioner has not raised any dispute regarding the quantum of the amount deducted by way of discounting. In this view of the matter we hold that the deduction of sum of Rs. 1,33,700 from the total consideration by way of discounting was justified and consequently, on account of non-payment of Rs. 1,33,700, it cannot be said that there was any failure on the part of the Central Government to pay part of the consideration within the stipulated time, so as to hold that there is abrogation....
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....es not support the contention of the petitioner. Similarly, the decision of the apex court in the case of Dr. A.K. Garg [2002] 256 ITR 660 is also distinguishable on facts. In the said case it is held that where the amount of consideration is tendered beyond the stipulated period, then section 269UG is attracted thus resulting in abrogation of the purchase order. In the said decision the issue pertaining to deduction on account of discounting was neither raised nor considered by the apex court. Therefore, the said decision does not support the case of the petitioner. As regards the deduction of Rs. 3,72,500 on account of stamp duty and registration charges is concerned, it is fairly conceded by the counsel for the respondents that in view of the decision of this court in the case of Polycon Paper Ltd. [2002] 253 ITR 182 the claim of the petitioner to recover that amount is liable to be upheld. The question now to be considered is whether, for non-payment of the said amount of Rs. 3,72,500 from the total consideration within the stipulated time, can it be said that there is failure on the part of the Central Government to tender part of the total consideration so as to abrogate the....