2009 (6) TMI 595 - HC - Income Tax

Purchase of immovable property by Central Govt. - property purchased by entering into an agreement by the appellant is below the normal rate - no illegality in selling of the property Appeal dismissed

Summary

Issues:
1. Application to permit respondents to come on record as joint family property rights involved.
2. Contestation of property claim by Department.
3. Allegation of lack of diligence by proposed respondents.
4. Liberty granted to establish right in property in appropriate proceedings.
5. Rejection of Miscellaneous Writ No. 4823 of 2009.
6. Rejection of writ petitions questioning property sale by Appropriate Authority.
7. Refusal to grant relief in writ petitions based on legal contentions.
8. Adverting to legal contentions and rejection of writ petition by single judge.
9. Examination of Department's stand on property purchase order.
10. Consideration of RBI's approval and property value in judgment.

Analysis:
1. An application was filed during an appeal to permit seventh and eighth respondents to come on record due to joint family property rights. The Department contested the seventh respondent's claim, citing the property sale in 1993 and vesting with the Central Government. The proposed respondents were accused of lacking diligence in defending their rights.

2. The rejection of the Miscellaneous Writ No. 4823 of 2009 was based on the property being sold in 1993, preventing the court from delving into factual disputes. Liberty was granted for respondents to establish their rights in the property through appropriate legal proceedings.

3. Writ petitions challenging the property sale by the Appropriate Authority were dismissed, with the single judge extensively referring to facts and previous proceedings. The single judge declined to grant relief, citing the absence of violation of natural justice and market value comparison.

4. Legal contentions were raised and countered in the writ petitions, with the single judge finding no violation of natural justice. The judgment highlighted the importance of hearing both parties and making a decision based on merits.

5. The Department's stand on the property purchase order was examined, focusing on comparative property sales. The single judge upheld the authority's decision on property valuation, considering factors like land area, building specifications, and market rates.

6. The judgment also discussed the RBI's approval and its relevance in tax evasion prevention. The property's prime location and value were emphasized, leading to the conclusion that the property sale to the Central Government was legal and valid.

7. Citing previous Supreme Court judgments, the single judge affirmed the legality of the property sale, dismissing any grievances from the agreement holder. The judgment concluded that no interference was warranted, upholding the dismissal of the writ petition.