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2007 (10) TMI 264 - HC - Income TaxPurchase of immovable property - appropriate authority failed to consider the merits and demerits of the case pointed out by the petitioners. In these circumstances, it is difficult to hold that the sale instances relied upon by the Appropriate Authority were comparable and consequently, it is difficult to hold that the flat in question sought to be purchased by the petitioners has been undervalued by 15% or more than the fair market value order of pre-emptive purchase is invalid
Issues:
Challenge to order under Section 269UD(1) of the Income Tax Act, 1961 regarding acquisition of a flat under Chapter XX-A or Chapter XX-C. Analysis: The petitioners agreed to purchase a flat and filed necessary forms with the Competent Authority. Subsequently, Chapter XX-C was introduced, leading to a dispute over the applicable chapter for the transaction. The petitioners challenged an ex-parte order, which was set aside for reconsideration based on a previous court judgment. The Competent Authority dropped proceedings under Chapter XX-A but issued a notice under Chapter XX-C, initiating a new round of objections and submissions by the petitioners. The petitioners argued that the order under Chapter XX-C lacked jurisdiction and failed to determine the fair market value of the flat accurately. They contended that the sale instances used by the Appropriate Authority were not comparable and that the decision to purchase the property was unjustified. On the other hand, the revenue's counsel defended the Authority's decision, citing past court rulings and justifying the lack of a specific fair market value determination. The court noted that the fair market value of the flat was crucial for determining undervaluation under Chapter XX-C. It found that the Authority's reliance on sale instances was flawed as they did not adequately consider the differences between the flat in question and the properties used for comparison. Additionally, the court highlighted discrepancies in the valuation of the flat compared to similar properties in the same building and locality, ultimately leading to the conclusion that the flat was not undervalued by the required percentage. In light of these findings, the court quashed the order passed by the Appropriate Authority under Section 269UD(1) of the Act, ruling in favor of the petitioners. The judgment favored the petitioners' arguments regarding the valuation and comparability of the flat, ultimately resulting in the success of their petition with no costs imposed.
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