1993 (3) TMI 13 - HC - Income Tax

Appropriate Authority Movable Property Purchase Of Immovable Property By Central Government

Summary

Issues involved:
Challenge to de novo order u/s 269UD of Income-tax Act, 1961 regarding purchase of property. Contention of non-application of mind, erroneous order, and undervaluation of property.

Challenge to de novo order u/s 269UD:
The petitioner challenged the order dated February 18, 1993, under section 269UD, alleging non-application of mind and error. The court noted that previous directions from the Supreme Court required a hearing before passing such orders. The appropriate authority provided reasons for the order after a show-cause notice and a hearing to the petitioner. The court found that the authority considered various sale instances, including those cited by the petitioner, and concluded that the petitioner failed to provide necessary particulars for consideration. The court emphasized the limited time frame for the hearing and the petitioner's responsibility to present relevant material to support their case.

Consideration of property disadvantages:
The petitioner argued that the property's disadvantages led to a lower price compared to other instances. The court observed that the authority did consider these disadvantages and highlighted the need to assess each property comprehensively, taking into account both positive and negative aspects.

Argument on undervaluation due to future property purchase:
The petitioner contended that the property's sale proceeds would fund the purchase of another residential flat, thus negating any capital gains concerns. However, the court upheld the authority's decision that the price per square foot was lower than the market rate, indicating undervaluation. The court found no basis to consider the order as erroneous or illegal.

Discounting of apparent consideration:
The court addressed the issue of discounting the apparent consideration amount, as per the agreement terms. It analyzed the agreement clauses specifying payment timelines and calculated the discounted value as per the prescribed interest rate. The court upheld the proper calculation of the discount based on the agreement terms and relevant rules.

Auction price comparison and final decision:
The petitioner highlighted an auction where a property fetched more than the agreed price, suggesting no undervaluation. However, the court noted the lack of evidence regarding any price increase between the agreement and auction dates. The court emphasized that unless the authority's findings are unreasonable, interference with its order is not warranted.

In conclusion, the court dismissed the petition and allowed a 10-week possession delay upon the petitioner's application.