TaxTMI 
TaxTMI 
2001 (7) TMI 52
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....eduction made on account of stamp duty payable by the vendor, as cost of conveyance, while calculating the apparent consideration for the purposes of arriving at the payment to be made under section 269UF of the Act. FACTUAL MATRIX The factual matrix lies in a narrow compass and it is thus: By an agreement dated November 30, 1988, the petitioner-company agreed to sell to Suraj Diamonds (India) Limited, the property consisting of land and factory building situated at village Gundavali, Andheri (East), bearing City Survey Nos. 253, 253(1) to (3) (part) for an apparent consideration of Rs.2,49,25,500 on the terms and conditions set out in the said agreement. The said agreement provided that stamp duty and registration charges on the conveyance shall be borne by the petitioner-company. In compliance with the provisions of Chapter XX-C of the Act the petitioner-company and Suraj Diamonds (India) Ltd. submitted the requisite statement in Form No. 37-1 in respect of the proposed immovable property. In the said statement, it was specifically mentioned that the apparent consideration for the agreement for transfer of the property was Rs.2,49,25,500. Respondents Nos. 2 to 4 he....
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....ore, requested them to rectify the said mistake. On receipt of the application, the petitioner was personally called for hearing and at such hearing the petitioner's representative reiterated the said stand and submission. In the meanwhile, pending the disposal of the application for rectification, the petitioner handed over possession of the property as required under the provisions of Chapter XX-C. The petitioner also received a cheque of Rs.2,18,62,052 dated February 23, 1989, subject to the decision on the rectification application. Pending disposal of the rectification application, certain more events leading to public auction of the property and consequent objection thereto have taken place. However, those facts are not being referred to as the same have no bearing on the question with which we are concerned in this petition. Be that as it may, on March 21, 1989, the petitioner received an order dated March 20, 1989, passed by respondents Nos. 2 to 4 under section 269UJ (hereinafter referred to as the "second impugned order" for the sake of brevity). By the said order, respondents Nos. 2 to 4 rejected the request for rectification of the order. It was stated in parag....
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....) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882), or in any other law for the time being in force, no transfer of any immovable property of such value exceeding five lakh rupees as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as the transferor) and the person to whom it is proposed to be transferred (hereinafter referred to as the transferee) in accordance with the provisions of sub-section (2) at least three months before the intended date of transfer.... 269UD. Order by appropriate authority for purchase by Central Government of immovable property. - (1) The appropriate authority, after the receipt of the statement under sub-section (3) of section 269UC in respect of any immovable property, may, notwithstanding anything contained in any other law or any instrument or any agreement for the time being in force, and for reasons to be recorded in writing, make an order for the purchase by the Central Government of such immovable property at an amount equal to the amount of apparent consideration.... 2....
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....nly adjustment or alteration, which respondents Nos. 2 to 4 could in law make to that amount was to discount that part of the apparent consideration the payment of which was deferred. In his submission, that having been done, the appropriate authority may be justified in directing deduction of Rs.5,65,898 from the amount of apparent consideration in the impugned order. The petitioner has no objection to that adjustment or deduction. The petitioner, however, contended that no other adjustment or deduction in law was to be made by the appropriate authority. It was thus contended by learned counsel for the petitioner that the deduction of Rs.24,97,550 as mentioned in clause 16 of the agreement of sale was equally illegal and de hors the aforesaid provisions and hence the respondents are required to be directed to restore this amount to the petitioner with interest at the rate of 18 per cent. thereon from January 27, 1989. Learned counsel for the petitioner further contended that by virtue of section 269UE(1) when a purchase order under section 269UD is passed in respect of an immovable property, such property thereupon vests in the Central Government, free of all encumbrances. The ....
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....t is precisely what is done by the appropriate authority and, hence, according to learned counsel for the respondents, no fault can be found with the said deduction of Rs.24,97,550. THE ISSUE In the light of the rival contentions, the following question arises for our determination: "Whether the appropriate authority was justified in deducting Rs.24,97,550 by way of cost of stamp duty and registration charges agreed to be borne by the petitioner seller for execution of the sale deed to sell as per clause 16 of the agreement of sale, while computing the apparent consideration for the purpose of sections 269UD(1) and 269UF(1)? ANALYSIS OF SUBMISSIONS In order to answer the aforesaid question, it is necessary to turn to the relevant scheme of Chapter XX-C of the Act and the relevant provisions incorporated therein. It is crystal clear from the relevant provisions falling under Chapter XX-C of the Act that the thrust of section 269UD(1) read with section 269UF(1) is that if the appropriate authority takes a view that, in exercise of its statutory powers of pre-emption, the immovable property in question, which is sought to be transferred under the agreement of sale is re....
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....on the premise that in future if sale takes place, the petitioner would have been out of pocket to that extent. On such premise, such a deduction could not have been effected by the appropriate authority. The said deduction was absolutely unwarranted as found hereinabove on the canvass of the statutory scheme of the Act. The aforesaid question fell for consideration of the Gujarat High Court in the case of Pradip Ramanlal Sheth v. Union of India [1993] 204 ITR 866, wherein it was held: "The second part of the definition of 'apparent consideration', therefore, rules out such deferment of any unascertained amount of consideration and contemplates only specified amount of consideration which is clearly fixed in the agreement but payment of which is deferred to a future date. We entirely concur with the aforesaid contention of Mr. Shah and hold that, for the purpose of the definition of the term 'apparent consideration' only that part of the consideration is to be reckoned which is clearly fixed and ascertained in the agreement of sale itself and which is not likely to be ascertained and computed at a future date. Even on this ground, clause 14 which does not indicate any specifi....
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....t of the same High Court in the case of Pradip Ramanlal Sheth v. Union of India [1993] 204 ITR 866. Learned counsel for the Revenue states that the papers before us suggest that a special leave petition was preferred against that judgment but he has no instructions as to what happened thereafter. Learned counsel for the respondents states that their enquiries with the Registry reveal that no appeal against that judgment was preferred by the Revenue. If the Revenue did not accept the correctness of the judgment in the case of Pradip Ramanlal Sheth v. Union of India [1993] 204 ITR 866 (Guj), it should have preferred an appeal there against and instructed counsel as to what the fate of that appeal was or why no appeal was filed. It is not open to the Revenue to accept that judgment in the case of the assessee in that case and challenge its correctness in the case of other assessees without just cause. For this reason, we decline to consider the correctness of the decision of the High Court in this matter and dismiss the civil appeal." (Also see Union of India v. Satish Panalal Shah [2001] 249 ITR 221 (SC)). Learned counsel for the respondents was also not in a position to con....