TaxTMI 
TaxTMI 
1995 (10) TMI 27
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....ntants. The appropriate authority thereafter passed the impugned order dated December 26, 1994, annexure "A" to the petition. The petitioners thereafter filed a rectification application dated January 19, 1995, and also filed supplementary submissions before the appropriate authority on May 17, 1995. The competent authority by its order dated June 30, 1995, rejected the rectification application of the petitioners. The aforesaid order dated December 26, 1994, passed under section 269UD(1A) of the Act and the order dated June 30, 1995, rejecting the rectification application, have been challenged in this petition by the transferor as well as the transferee. Learned counsel for the petitioners contended that-- (1) the appropriate authority had failed to determine the fair market value of the property in question. He also contended that the finding of the appropriate authority that the property under consideration (PUC) was comparable to the sale instance properties (SIPs) was perverse ; (2) the order was also otherwise bad because the appropriate authority had not given any finding that the alleged undervaluation was done with a view to evade tax. Learned counsel for the petition....
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....on mentioned in the agreement dated June 11, 1992 (SIP), it was apparent that there was an attempt to evade tax. As far as the preliminary contention of Mr. Thakore regarding the alleged violation of the ULC Act is concerned, it is true that the agreement in question is for sale of property a substantial portion of which was otherwise liable to be declared as a surplus vacant land being in excess of the limit stipulated under the ULC Act and that granting any relief in favour of the petitioner in connection with the said agreement may prima facie amount to assisting the petitioners, who are about to commit breach of the provisions of the ULC Act, when in the exemption order under the ULC Act shown to this court, there is an express condition prohibiting transfer of the exempted land in favour of any other person and it is not pointed out that petitioner No. 1 has obtained any modification of the said condition or permission of the authority under the ULC Act for such transfer. However, Mr. Soparkar, learned counsel for the petitioners, has invited our attention to the judgment of the Delhi High Court in the case of Tanvi Trading and Credits P. Ltd. v. Appropriate Authority [1991] ....
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....s to the conclusion that the sale transaction was being effected against the provisions of any law then it could decline to give the certificate asked for. After considering the rival contentions the Division Bench of the Delhi High Court allowed the writ petition quashing the orders impugned in the petition and further issued a writ of mandamus directing the appropriate authority to issue "no objection certificate" in terms of section 269UL(3) of the Income-tax Act. In our view, the ultimate decision of the Delhi High Court in the above case was unexceptionable because the excess vacant land under the ULC Act was already demarcated and surrendered and respondents Nos. 3 to 10 in that case did not apply for a certificate under section 269UL of the Income-tax Act in respect of any such excess vacant urban land. However, the Delhi High Court went on to observe that the only power which is conferred upon the appropriate authority under section 269UD of the Act is the power to decide whether to purchase the property or not and that any investigation which will be undertaken by the appropriate authority is only with a view to determine whether the pre-emptive right of purchase should b....
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....ate authority could buy the property, or (ii) in the event of its decision not to buy, it has to issue a 'no objection certificate' leaving it open to the parties to deal with the property. In that view of the matter, the High Court was right in its conclusion." In view of the aforesaid binding decision of the apex court, the preliminary objection on behalf of the Revenue is overruled. We may also point out that the Bombay High Court has also taken the same view in the case of Irwin Almeida v. Union of India [1992] 197 ITR 609 and also in the case of J. Gala Enterprises Estate and Investments Pvt. Ltd. v. W. Hassan, CIT [1995] 216 ITR 110. Coming to the merits of the matter, we find that it is not necessary to consider the first contention of the petitioners as the petition deserves to be allowed and the impugned order at annexure "A" deserves to be quashed and set aside by accepting the second contention of the petitioners inasmuch as the appropriate authority has passed the impugned order dated December 26, 1994, without arriving at a specific finding that the apparent consideration mentioned in the agreement was not the real consideration or that it was with a view to evade ta....
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....nt undervaluation of the property to the extent of 15 per cent., the appropriate authority may draw a presumption about undervaluation having been done with a view to evading tax, a presumption which is rebuttable. However, such a presumption is not an obligation under the statutory provision. It is for the appropriate authority to raise presumption or not on the basis of the estimated valuation. Whether such presumption has in fact been resorted to and has not been rebutted must in our opinion be reflected in the order which is finally passed by the appropriate authority disclosing application of mind to all available ataterial on record. . . . As this exercise of the power depends upon the satisfaction of the appropriate authority and the appropriate authority is under an obligation to pass a speaking order by specifying the reasons for purchasing the property, its satisfaction about the facts must be reflected in the order and cannot be left, to guesswork or for raising the presumption by the court in favour of the appropriate authority, if the order is challenged. The order must speak for itself. The impugned order, in our opinion, does not even whisper about the satisfaction ....