TaxTMI 
TaxTMI 
1991 (2) TMI 46
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....N. C. Thorvaldsen in favour of the respondent, Messrs. Duncans Agro Industries Ltd., vide agreement to sell dated August 31, 1985. The sale consideration of rupees one crore included a sum of Rs. 35,27,222 payable on account of unearned increase to the L & DO by the vendee on behalf of the vendor. A sum of rupees fifty lakhs was paid to the vendor on execution of the agreement to sell itself while a sum of Rs. 35,27,222 was paid to the Land and Development Office (L. & D. 0.) on behalf of the vendor by the vendee in April, 1986. The balance amount of Rs. 14,72,778 was paid to the vendor by the vendee on May 6, 1986, when the sale of the said property was registered. The sale deed was registered before the Sub-Registrar, New Delhi, on May 6, 1986. Statement in Form No. 37EE was filed with the Competent Authority on September 27, 1985, which was registered under section 269AB on November 7, 1985. The Competent Authority recorded reasons on April 9, 1986, as required under the proviso to section 269C(1). This was printed in the Gazette of India on August 9, 1986. After the registration of the sale deed on May 6, 1986, both the vendor and the vendee filed statements in Form No. 37G. ....
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....t Authority itself was wrong in the facts and circumstances of this case and, therefore, we need not go into the question of the stage of availability of the presumption under section 269C(2) of the Income-tax Act which is the subject-matter of finding No. 5 of the Tribunal and we leave the said question open for determination in an appropriate case. The Competent Authority recorded the following reasons for initiation of proceedings under section 269C(1) of the Income-tax Act: The subject property admeasuring 34,514 sq. ft. or 3,824 sq. yds. has been transferred, vide agreement for sale dated 31st August, 1985. Information in Form No. 37EE was received on 27th September, 1985, and was registered in this office on 7th November, 1985. A preliminary notice issued on 2nd July, 1986, requiring the transferee to file certain relevant information has remained uncomplied with. Though the property is stated to be in the occupation of some Kalki Investments Ltd., in the absence of details such as nature of occupancy, amount of rent, area under occupancy and other relevant conditions about it, I ignore it and treat the property as vacant. Its F. M. V. is, therefore, determined by land and ....
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....by the Tribunal in support of its said finding is not correct because the said case does not deal with that aspect of law at all. On the contrary, counsel for the respondent submits that the view taken by the Punjab and Haryana High Court is not correct. As already observed by us, this question need not be gone into in the facts and circumstances of the present case and the same can be decided in an appropriate case. In this case, there is otherwise ample material to hold that the order of the Competent Authority is not correct and as such the same was rightly quashed by the Tribunal. The other submissions are inter-connected and the same can be conveniently dealt with together. The Competent Authority has mainly taken into consideration the instances of sale of two properties, namely, J-7, Green Park, New Delhi, and K-114, Hauz Khas, New Delhi, where the rate of land per sq. yd was Rs. 5,000 and Rs. 4,000, respectively. This approach of the Competent Authority was, however, wholly erroneous in view of the fact that it ignores that the Green Park and Hauzkhas plots were small plots in freehold localities. It is well-recognised that small plots in developed colonies fetch much hig....
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....nt of India. The most important aspect which has been totally brushed aside by the Competent Authority is the fact that the L & D. O. itself has determined the rate of land in this very area at Rs. 2,000 per sq. yd. or Rs. 2,200 per sq. mt. for the purposes of charging unearned increase. Actually, it is on the basis of these rates that the vendee has paid unearned increase to the L. & D. O. as a condition precedent for grant of permission to transfer the lease of the property in favour of the vendee. We think that the L. & D. O. rates fixed by the Government itself ought to have been kept in mind by the Competent Authority before initiating any action in the matter. The Tribunal has also found that the Competent Authority had erred in ignoring the tenancy in favour of Messrs. Kalki Investments Ltd. in the subject property. The factum of tenancy is mentioned in the agreement to sell itself along with particulars of the tenant. The same finds mention in Form No. 37EE as also in the reasons recorded by the Competent Authority for initiation of the proceedings. In spite of this, no effort seems to have been made to find out about the nature of the tenancy. If there is genuine tenancy....