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TMI Blog2005 (11) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... nging to petitioners Nos. 1 to 3 under section 269UD(1) of the Income-tax Act, 1961 ("the Act" for short). According to the petitioners, the findings recorded in the impugned order that the apparent consideration has been undervalued by 15 per cent, or more than the fair market value is wholly erroneous because, firstly, the sale instance property ('SIP' for short) referred to in the impugned order is not comparable, and secondly, even on the basis of the price of the SIP, it is not established that the alleged undervaluation exceeds 15 per cent, or more than the fair market value and, therefore, the impugned order is liable to be quashed and set aside. The relevant facts are that petitioners Nos. 1 to 3 are owners of an open plot of land bearing Survey No. 113 admeasuring 3 hectares and 93 acres situated at village Varje, Taluka Haveli, district Pune. Out of the said lands, development rights in respect of seven acres of land were given by petitioners Nos. 1 to 3 to petitioner No. 4 for development under the development agreement dated November 14,1994. The said seven acres of land are situated to the north of National Highway No. II on the hilltop and the consideration shown in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuate at Village Varje, whereas, the SIP is situate at Village Pashan. (b) The PUC is situated outside the Pune Municipal Corporation limits, whereas the SIP is situated within the Pune Municipal Corporation limits. (c) The PUC is governed by the Development Control Rules, whereas the SIP is governed by the Pune Municipal Corporation Rules for Development. (d) The PUC is not situated within the developed area, whereas the SIP is situated within the developed area and is surrounded by constructions. (e) The approach road is not provided to the PUC, whereas the approach road is separately provided for SIP (f) Internal road area at 15 per cent, of balance area is required to be provided for the PUC whereas no internal road area is required for the SIP. (g) As the PUC is outside the Pune Municipal Corporation limits, the amenity open space requirement is 25 per cent., whereas, in respect of the SIP, the amenity open space requirement is 10 per cent. (h) The PUC does not have a service road and will have to leave 132 M land in length for the purpose of service road from the highway, whereas the same is not required in the case of the SIP. (i) In the case of the PUC, no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IP was sold in auction on January 10, 1995, i.e., after about two months from the date of the agreement in the case of PUC. During the relevant period, the prices of the immovable property were increasing and, therefore, the price of SIP sold in January, 1995 is not comparable with the development agreement entered into in November, 1994 in respect of the PUC. Ms. Khan further submitted that in a bid to establish that the difference in apparent consideration between SIP and PUC is more than 15 per cent., the Appropriate Authority has purported to delete 1,969 sq. mtrs. of FSI from the total FSI of 16,575 sq. mtrs. available to SIP, on the ground that 10 per cent, of the FSI has to be reserved for the purposes of Government nominees. According to the learned advocate for the petitioners, reservation of 10 per cent, flats for Government nominees was applicable even in respect of PUC and, therefore, the Appropriate Authority committed an error in taking into account the 10 per cent, reservation only in the case of SIP. For all the aforesaid reasons, the learned advocate for the petitioners submitted that the impugned order is wholly arbitrary and since the SIP is not comparable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, such as, the locality, size of the plot, conditions attached to it and the sale instances of comparable properties, if any, situate in the locality. In the present case, it is not in dispute that the distance between the PUC situated at village Varje and the SIP situated at village Pashan is of about 7 kms. The PUC is situate near the Pune-Bangalore highway and the SIP is situate on the hilltop. The market value of the property situated near the highway cannot be compared with the property situated on the hilltop because, both the properties have merits and demerits which are not comparable. Apart from the above, the PUC is situated outside the Pune Municipal Corporation limits, whereas the SIP is situated within the Pune Municipal Corporation limits. Moreover, in the present case, it is seen that there are distinguishable features between the two properties regarding the approach road, internal road, service road and amenity open space required to be kept open. The very fact that there are various disadvantages attached to the PUC compared to the SIP itself is sufficient to hold that the SIP is not comparable with the PUC. The Appropriate Authority has resorted to add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue is distinguishable on the facts. In that case, the purchase order was held to be valid in view of the peculiar conduct of the petitioner therein. In that case, the petitioner had permitted the auction to proceed and accordingly, on auction, third party interest was created in respect of the property in question. Moreover, in that case, the court found that the instances relied upon by the Appropriate Authority were comparable. In the present case, in our opinion, the SIP relied upon by the Appropriate Authority is not comparable and it is not open to the Appropriate Authority to take into account sale instance of non-comparable properties and arrive at a conclusion that there is undervaluation of 15 per cent, or more by making additions and deletions of the advantages and disadvantages attached to the totally dissimilar properties. In view of our above finding, it is not necessary to go into the question as to whether the transfer of development rights is covered under Chapter XX-C of the Act or not. In the result, the petition succeeds. The impugned order dated February 23,1995, is quashed and set aside. Rule is made absolute in terms of prayer clause (b). However, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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