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TMI Blog1996 (9) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... er when the order of acquisition had been passed by the competent authority, the transferee filed appeals before the Appellate Tribunal under section 269G of the Act which were all dismissed and against that the transferees filed appeals in this court under section 269H of the Act which were allowed by judgment dated September 25, 1978, by a Bench of this court and is in Smt. Lalita Todi v. CIT [1980] 123 ITR 40. By this judgment, the decision of the Appellate Tribunal was set aside and the matter remanded back to the Appellate Tribunal to pass fresh orders in accordance with law keeping in view the observations made in the judgment. After the remand, the Appellate Tribunal passed the impugned order dated September 26, 1980, setting aside the acquisition proceeding. This time the competent authority is aggrieved and has filed these appeals in this court under section 269H of the Act. This section authorises the Commissioner of Income-tax or any person aggrieved by an order of the Appellate Tribunal under section 269G to prefer an appeal to the High Court on any question of law. It appears to us that these appeals filed by the competent authority are incompetent. The appeal could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer to some salient facts of the case. The property in question was transferred to various persons under 13 different sale deeds executed on August 30, 1973, for an aggregate consideration of Rs. 1,85,000. These sale deeds were registered on September 5, 1973. However, according to the valuation report, the value of the property was estimated to be Rs. 6,58,000. In this connection, we may refer to the definition of "fair market value" as contained in clause (d) of section 269A of the Act falling in Chapter XX-A. It means the price that the immovable property would ordinarily fetch on sale in the open market on the date of execution of the instrument of transfer of such property. Notices under section 269D of the Act were issued on January 31, 1974, under which the transferors and the transferees were called upon to show cause as to why the immovable property transferred be not acquired by the Revenue authorities. The transferees contended that there were various encumbrances and that the title of the transferors was in dispute in a civil suit and the property was also fetching low rent and protected by eviction and rent restriction laws. One Champa Devi also claimed to be the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be the price that a prudent purchaser would be willing to pay necessarily taking into account the extent and the quality of title as well as all the factors which tend to push up the value or depress it. The material elements which ought to be taken into consideration in transfers of immovable property of the instant nature must inevitably embrace within them the considerations of a reasonable purchaser. Some of such elements in the instant case are that the property in question is in a damaged condition in the occupation of a tenant at Rs. 116 per month as rental, the fact that in the State of Bihar a tenant is in many cases protected against eviction and enhancement of rent under the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947, the depressing effect of the imminent risk of acquisition of about 4,000 square feet of the property in question for road development by the Patna Improvement Trust on its price, the protracted litigation against the tenant for having him evicted from the house, cost of hypothetically demolishing the house, developing the property for commercial purposes and so on and so forth. These are factors which, in my view, are germane to the dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing behind five heirs. A family arrangement was arrived at giving varying unspecified shares in the land to different heirs. All the heirs joined together and sold the land. The agreement of sale recited that the vendors had agreed to the execution of a single deed as a matter of convenience and the share of each of the vendors was less than Rs. 10 lakhs but the total value of the consideration was Rs. 20 lakhs. Acquisition proceedings were initiated under section 269UD of the Act. These were challenged in the Madras High Court by filing a writ petition. The court held that the heirs were individual owners of definite shares in the property and each one could deal with only his respective share and he could not deal with the share of another. The property which so fell to the share of each individual would come definitely within the definition of the words "immovable property". Such a sharer was entitled to transfer his immovable property to a third person. The court held that merely because a plurality of such individual owners joined together to enter into one single agreement to transfer their respective shares in favour of one or more persons, that would not make any difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also of the view that proceedings for acquisition under Chapter XX-A could not have been initiated as these could be initiated only where the competent authority had reason to believe that any immovable property of a fair market value exceeding Rs. 25,000 had been transferred. Mr. Rastogi, learned counsel for the appellant, supported the order of the competent authority, but we think it was hard for him to do that. It could not be said that considerations which prevailed with the Appellate Tribunal in setting aside the order of the competent authority were not in accordance with the provisions contained in Chapter XX-A of the Act. To avoid proceedings for acquisition under Chapter XX-A the fair market value of the immovable property transferred by way of sale has to be the same as the apparent consideration mentioned in the instrument of transfer subject of course that the proceedings under the Chapter would not be initiated unless the fair market value exceeded the apparent consideration by more than 15 per cent. of such apparent consideration. Before starting proceedings under this Chapter the other factor which the competent authority has to consider is that the fair market v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00, the competent authority could not initiate proceedings. In that case also if the fair market value is over and above 15 per cent. of Rs. 25,000, proceedings for acquisition could be taken. Proceedings for acquisition could also be taken if various sale deeds respecting one property are executed in order to evade or avoid the rigours of law as contained in Chapter XX-A and the competent authority can treat all the sale deeds as one transaction if different parts of one property are transferred by various sale deeds with apparent consideration of less than Rs. 25,000 in each sale deed. We do not, therefore, find anything wrong when the competent authority initiated acquisition proceedings treating various sale deeds as one transaction, but then it fell into error in leaving three of the sale deeds. The decision of the Madras High Court in K. V. Kishore v. Appropriate Authority [1991] 189 ITR 264 is clearly distinguishable as in that case five owners having separate shares though unspecified joined hands to execute one sale deed. Here it is like one owner executing different sale deeds of one property. Further, on what basis could the competent authority take possession of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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