TaxTMI 
TaxTMI 
2007 (6) TMI 184
X X X X Extracts X X X X
X X X X Extracts X X X X
....1992, expressing its intention to exercise option to purchase the said property, however, without furnishing any material or reason in support of its intention to purchase. The petitioners, on December 23, 1992, replied to the show-cause notice and requested the appropriate authority to furnish material relied upon by them in support of their belief. The petitioners at the time of hearing on December 24, 1992, reiterated their contention and, thereafter, again wrote a letter to the said authority dated January 6, 1993, requesting for disclosure of the reasons and grounds on which the property was proposed to be acquired. On January 28, 1993, the petitioners received the impugned order dated January 15, 1993, without any reply to their repeated demands seeking reasons and grounds for proposed action. Being aggrieved by the aforesaid order, the petitioners filed this writ petition on February 8, 1993, under article 226 of the Constitution of India. The writ petition was admitted, but no interim relief was granted. However, liberty in favour of the petitioners, to move for any other appropriate interim order, in the event of changed circumstances, was reserved. The appropriat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts. The said judgment does not lay down any law as sought to be widely canvassed by Mr. Ashokan. This decision basically revolves around the peculiar facts found in that particular case; wherein the petitioners were not in a position to deposit the purchase price as such no interim relief was granted in favour of the petitioners at the time of admission of the petition. The vendor had accepted the consideration without any demur or protest. The vendor made the statement before the court that he did not desire to challenge the acquisition. The transaction in question was completed much prior to the decision of the Supreme Court in the case of C.B. Gautam v. Union of India [1993] 199 ITR 530. The Division Bench basically relied on the paragraph of the said judgment delivered in the case of C.B. Gautam [1993] 199 ITR 530, which reads as under: "We may clarify that, as far as completed transactions are concerned, namely, where, after the order for compulsory purchase under section 269UD of the Income-tax Act was made and possession has been taken over, compensation was paid to the owner of the property and accepted without protest, we see no reason to upset those transactions and h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g home the aforesaid contentions urged by him, which we propose to refer at the appropriate stage of the judgment. Mr. Ashokan, learned counsel for respondents Nos. 1 to 5 tried to support the impugned order on the merits. Consideration: Having heard the rival parties, the petitioners, in our considered view, deserve to succeed on all counts. Firstly, there is no understatement of consideration, which would be clear from the following data: "The appropriate authority has determined the market value at Rs. 3,400 per sq. ft. of which 85 per cent. would constitute Rs. 2,890 per sq. ft. The total consideration agreed was Rs. 64,00,000 as such actual BUA is 1991.10 sq. ft. with a garage. The value of the garage as per the petitioners is Rs. 1,00,000; whereas Rs. 2,00,000 as per the appropriate authority. The consideration of house as per the petitioners is Rs. 63,00,000; whereas Rs. 62,00,000 as per the appropriate authority. The discounted consideration as per the petitioners is Rs. 61,88,227; whereas Rs. 60,88,227 as per the appropriate authority. The calculations, if made, the rate of consideration as per the petitioners would be Rs. 3,164; whereas Rs. 3,114 as per the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; Rs. Reserve price: 73,60,000 Less: Value of garage: 2,00,000 --------- 71,60,000 Add: Estimated cost of construction 5,62,388 of 1,249 sq. ft. FSI &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....basic requirement, viz., observance of the minimal principles of natural justice is dispensed with. As held by this court in the case of Shreyas Builders v. M.D. Kodnani [2000] 242 ITR 320, a defective notice is one which does not disclose basis on which it is issued. As held by this court in Jagdish Electronics (India) (P.) Ltd. v. Appropriate Authority, Income-tax [2000] 242 ITR 326 and upheld by the apex court in Appropriate Authority of Income-tax v. Jagdish Electricians India P. Ltd. [2003] 264 ITR 468 where no reasons were disclosed for issuing the show-cause notice nor any material that was considered by the appropriate authority to reach that tentative conclusion was disclosed in the notice, order of pre-emptive purchase based on such defective notice would be liable to be set aside. In the case of Appropriate Authority v. Vijay Kumar Sharma [2001] 249 ITR 554, the apex court was of the view that, where there was gross breach of the principles, of natural justice, in passing the order of purchase of the property, the High Court was justified in quashing the proceedings instead of remitting it back for reconsideration. In Sona Builders v. Union of India [2001] 251 ITR ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Ltd. [2001] 251 ITR 7 that just as comparison of incomparable properties is fallacious, non-comparison of comparable properties is equally fallacious. This court in the case of Vimal Agarwal v. Appropriate Authority [1994] 210 ITR 16 held that an order passed merely on the basis of sale instances given by the appropriate authority without considering sale instances referred to by the aggrieved parties and setting out cogent reasons for not acting upon them is not a proper and valid order. Where the comparable sale instances cited by the parties have not been dealt with by the appropriate authority, its order of purchase could not be sustained and is liable to be quashed [Hunaida Jamnagarwala v. Appropriate Authority [1996] 217 ITR 679 (Guj); Chokhawala Associates v. Appropriate Authority [1999] 238 ITR 653 (Guj). Where the appropriate authority has failed to clearly determine the fair market value and to specify that undervaluation was intended to evade tax and refused to consider the comparable sale instances submitted by the affected party, its action stands vitiated on the face of it [Himmatlal Vadalia v. Union of India [1998] 232 ITR 854 (MP). The order of the approp....