9911796707
TMI Blog1995 (10) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... g purchaser) and respondent No. 3 (intending seller) filed Form No. 37-I in the office of the appropriate authority. On July 11, 1995, showcause notice was issued by the appropriate authority under section 269UD(1A) of the Act to the petitioner as well as respondent No. 3. After the petitioner submitted its reply dated July 20, 1995, the appropriate authority passed the order dated July 31, 1995, under section 269UD(1) of the Act for purchasing the property for the Central Government. On July 31, 1995, itself the appropriate authority also passed another order requiring respondent No. 3 to hand over the possession of the property in question. The aforesaid orders dated July 31, 1995, have been challenged in this petition by the petitioner-intending purchaser of the said property. Learned counsel for the petitioner contended that (1) the appropriate auth ority had failed to determine the fair market value of the property in question. Learned counsel further contended that the finding of the appropriate authority that the property under consideration (PUC) was comparable to the sale instance properties (SIP) was perverse ; (2) the order was also otherwise bad, because the appropria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no reason why the authority should not consider that TSI which had taken place about 20 months ago, especially when the TSI is abutting the PUC. It was contended that if the authority could purport to compare the SIP-1 and the PUC by referring to alleged increase in the property rates to the extent of 25 per cent. to 30 per cent. in Pune, by applying the same yardstick to the increase in the cost of the TSI, the price of TSI-1 works out to Rs. 1,432 per sq. mtr. On the other hand, the rate for the PUC works out to Rs. 2,138 per sq. mtr. It was further submitted that the purchaser was also required under the agreement to pay for alternative accommodation or compensation for getting part of the premises vacated by servants and other persons who were accommodated there for more than 20 years, having their ration cards and having their names in the voters list also at the same address. Moreover, the purchaser was liable under the agreement for stamp duty for registration charges which would bring the net price at Rs. 2,096 per sq. mtr. which was comparable with Rs. 2,120 for SIP-1 and Rs. 2,175 for SIP-2. Learned counsel for the petitioner, therefore, submitted that notwithstand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g counsel for the Revenue, relied on the affidavit-in-reply filed on behalf of the appropriate authority and submitted that all the comparable sale instances were properly considered by the appropriate authority and that this court would not sit as a court of appeal for reviewing the order of the appropriate authority. Learned standing counsel further submitted that the appropriate authority had applied its mind to all the relevant factors and, therefore, the order is not required to be interfered with. As regards the petitioner's contention that the authority had not given any finding regarding the intention to evade tax, learned standing counsel contended that a fair and reasonable reading of the order would go to show that there was a finding regarding the intention of the parties to evade tax. Having carefully considered the rival contentions and the material on record, in our opinion, it is not necessary to examine the merits of the first contention on behalf of the petitioner that the impugned order passed by the appropriate authority was perverse in holding that two SIPs were comparable with the PUC. This is so in view of our finding that the petition deserves to be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is only on the existence of the second indicia and not merely in the case of undervaluation that the authority has been empowered to resort to the power of pre-emptive purchase. It is true that in a case of significant undervaluation of the property to the extent of 15 per cent., the appropriate authority may draw a presumption about undervaluation having been done with a view to evading tax, a, presumption which is rebuttable. However, such presumption is not an obligation under the statutory provision. It is for the appropriate authority to raise the presumption or not on the basis of the estimated valuation. Whether such presumption has in fact been resorted to and has not been rebutted must in our opinion, be reflected in the order which is finally passed by the appropriate authority disclosing application of mind to all available material on record. From the very fact that the presumption is rebuttable, the appropriate authority is not absolved of the duty to apply its mind to all available material before it, to find whether the presumption raised of understatement with intention to evade tax has not been rebutted and arrive at its satisfaction about the twin requirements r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the real consideration, the nexus cannot be established with an attempt to evade tax. Therefore, it is also necessary in the chain of decision making not only to arrive at a conclusion of the differentiation between fair market value and the apparent consideration but it is required that the fair market value of the property concerned is arrived at and a conclusion is reached that the apparent consideration is not the real consideration." (emphasis supplied). If we analyse the facts of the present case and the order passed by the appropriate authority, we find that the following finding given by the appropriate authority falls short of the mandatory requirement as required in the judgment of the Supreme Court in the case of C. B. Gautam [1993] 199 ITR 530 and the aforesaid two decisions of this court rendered on September 19, 1995. The Supreme Court, in the case of C. B. Gautam v. Union of India [1993] 199 ITR 530 had held that when the apparent consideration declared in an agreement for sale is less than the fair market value by 15 per cent. or more, the appropriate authority may draw a presumption that this undervaluation has been done with a view to evade tax. In such cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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