9911796707
TMI Blog1995 (10) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ting respondent No. 1 to issue no objection certificate in terms of section 269UL of the Act. On March 27, 1995, the petitioner on the one hand and respondents Nos. 3 to 5 on the other hand entered into an agreement for the purchase of the property in question, being land with building admeasuring about 1,961 sq. mtrs. for a consideration of Rs. 1,75,90,125. The petitioner and respondents Nos. 3 to 5 submitted Form No. 37-I before the appropriate authority on April 6, 1995. On July 11, 1995, the appropriate authority issued notice under section 269UD(1A) of the Act to the petitioners and respondents Nos. 3 to 5 to show cause as to why the appropriate authority should not exercise the power of pre-emptive purchase as the appropriate authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appropriate authority ; (2) the impugned order under section 269UD(1) is even otherwise bad in view of the fact that the appropriate authority has not given any finding to the effect that the apparent consideration was understated with a view to avoiding income-tax. In support of the first contention, learned counsel for the petitioners submitted that the property under consideration was in a residential zone and was not on the Ashram Road. The property under consideration was at a distance of about 300 metres away from the main Ashram Road Usmanpura crossing, whereas the sale instance property was one at a distance of only 15 metres from the Ashram Road and that too opposite the Gujarat Vidyapith and nearer to Ajanta Commercial C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uer had, in his objections dated July 24, 1995, pointed out the facts regarding non-comparability of the PUC with the SIPs and that the Government registered valuer had given comparable cases where no objection certificates were given by the appropriate authority. Learned counsel further pointed out that the petitioners were to bear full stamp duty and registration charges which would be substantial looking to the consideration being Rs. 1.75 crores. It was then submitted by learned counsel for the petitioners in support of his second contention that the impugned order is conspicuously silent about the motive to evade tax which is the sine qua non for the pre-emptive purchase by the appropriate authority, as laid down by their Lordships of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... significant undervaluation of immovable property agreed to be sold. It was further held that if the appropriate authority concerned is satisfied that, in an agreement to sell immovable property in such areas as set out earlier, the apparent consideration shown in the agreement for sale is less than the fair market value by 15 per cent. or more, it may draw a presumption that this undervaluation has been done with a view to evade tax. Of course, such a presumption is rebuttable and the intending seller or purchaser can lead evidence to rebut such a presumption. Moreover, an order for compulsory purchase of immovable property under the provisions of section 269UD requires to be supported by reasons in writing and such reasons must be germane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory provision. It is for the appropriate authority to raise 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.... its satisfaction about the facts must be reflected in the order and cannot be left to guess-work or for raising the presumption by the court of the appropriate authority, if the order is challenged. The order must speak for itself. The impugned order, in our opinion, does not even whisper about the satisfaction of the appropriate authority about the undervaluation being with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt to evade tax, it is essential that the apparent consideration is not the real consideration. Therefore, merely on the finding that the apparent consideration is less than fair market value without there being any satisfaction that the apparent consideration is 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 the conclusion of the differentiation between the 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). The releva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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