TaxTMI 
TaxTMI 
2009 (8) TMI 31
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....ance of Rs. 1,03,50,000/to be paid at the time of the sale which was to be completed within 4 months. In accordance with the provisions of Chapter XXC of the Income Tax Act (for short "the I.T. Act"), the petitioners and the respondent no.3 filed a statement in Form No.37I as required under section 269UC of the I.T. Act. After notice to the petitioners and the respondent no.3 and after giving them an opportunity of being heard, the appropriate authority (the respondent no.2) passed an order acquiring the said property. That order is impugned in this petition. 3. Mr. Porus Kaka, learned counsel appearing for the petitioners, assailed the order of acquisition on several grounds. He firstly submitted that in C.B. Gautam v. Union of India, (1993) 199 ITR 530, the Supreme Court has held that the provision of preemptive purchase, for apparent consideration by the Government of the immovable property proposed to be transferred does not confer arbitrary or unfettered discretion on the appropriate authority to compulsorily purchase immovable properties. The acquisition is to be effected only when there is a significant undervaluation in the agreement of sale with a view to evade tax and ....
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....om the properties of which sale instances were relied upon by the Department. The sales were therefore not comparable and were irrelevant for determining market value of the said property. He further submitted that the respondents had pointed out several sale instances of comparable properties or properties situated near the said property which were not properly considered by the appropriate authority. On proper consideration of the sale instances relied upon by the petitioners, the market value of the said property would be more or less equal to the agreed price. Mr. Kaka also handed over to us a map obtained from "Google Earth" showing the locations of the said property, properties of the sale instances relied upon by the petitioners and the properties of the sale instances relied upon by the appropriate authority in its order. Counsel for the respondents did not dispute the correctness of the said map which is taken by us on record. 4. Mr. Ashokan, the learned counsel for the Union of India and the Appropriate Authority supported the impugned order. He submitted that the sale instances relied upon by the appropriate authority could be looked into after giving an appropriate d....
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....gnificant undervaluation in the agreement of sale, that is to say where the apparent consideration falls short of the fair market value by 15% or more, then only the order for compulsory acquisition of the property can be made. We would therefore be required to consider whether the finding arrived at by the respondent no.2 that the apparent consideration was substantially less than the market value, is in any way perverse. Perversity may arise on account of ignoring the materials produced by the parties before the respondent no.2 or on account of looking to and taking into consideration the materials which were not admissible and/or where the finding is such that no reasonable person trained in law would, on the available materials, arrive at the conclusion arrived at by the appropriate authority. 8. For the purpose of ascertaining the market value of the said property, the appropriate authority relied upon the report of the valuation officer (see para 3 of the impugned order). The valuation officer has held that the area of the said property was 465 sq. m. and the permissible FSI was 0.75. Thus, the total buildable area of the said property was 3754 sq. ft. The said property co....
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....250 sq. ft. or 1000 sq. ft. area to the tenant and submitted that if any one of these probabilities was taken into consideration, the value of accommodating a tenant arrived at Rs.4,34,400/by the appropriate authority was abysmally low. We see considerable force in the contention of Mr. Kaka. We also notice that the appropriate authority has not given good reasons why it assumed that cost of settling the tenant was only Rs.4,34,400/as held by the valuation officer. Acceptance of the valuation report prepared by the valuer attached to its office by the appropriate authority, in our view, suffers from nonapplication of mind. In any event, the appropriate authority has not disclosed reasons why the report was accepted by it in the light of the submissions of the petitioners. 10. The appropriate authority has relied upon the three sale instances brought to its notice by the valuation officer for estimating market value of the said property. The two sale instances viz. case no. 16260 and case no. 17841 are in respect of commercial apartments situated in Corporate Park and Swastik Chambers which abut main SionTrombay Road. The third sale instance viz. case no 17529 is in respect of a ....