1999 (9) TMI 77 - HC - Income Tax

Purchase Of Immovable Property By Central Government, Apparent Consideration, Interpretation Of Taxing Statutes, Literal Interpretation

Summary

Issues:
Challenge to order under section 269UD(1) of the Income-tax Act, 1961 regarding purchase of property by Central Government; Application of discounting principle under section 269UA(b) in determining consideration amount.

Analysis:
The petitioners challenged an order directing the purchase of their property by the Central Government under section 269UD(1) of the Income-tax Act, 1961. The dispute focused on the deduction made by the appropriate authority from the amount payable to the petitioners, applying the principle of discounting as per section 269UA(b) of the Act. The petitioners argued that discounting should only apply from the date of actual payment by the Central Government to the date specified in the agreement, not from the date of the agreement itself.

The definition of "apparent consideration" under section 269UA(b) was crucial in this case. It stated that where part of the consideration is payable after the agreement date, the value of such deferred payment should be discounted from the date of the agreement. The court emphasized that the statutory provision clearly mandated discounting from the agreement date, as per the plain language of the law. The court cited legal principles that statutory enactments must be construed based on their plain meaning without adding or altering words unless necessary to prevent ambiguity or inconsistency.

The court referenced previous judgments, including decisions by the Gujarat and Allahabad High Courts, to support its interpretation of the law. It disagreed with the Bombay High Court's view that discounted value should be determined with reference to the date of payment under section 269UG(1) rather than the date of the agreement. Ultimately, the court upheld the appropriate authority's determination of the discounted value of the consideration payable to the petitioners and dismissed the petition. The court found no flaws in the authority's decision and ruled that there was no merit in the petition, thus rejecting it without costs.