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TMI Blog1991 (1) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... that a wall was constructed to separate the rest of the land, being an extent of 5,732 square feet, with a building over an extent of 3,127 square feet. The division of this property is such that the rest of the land being 5,732 square feet with a building cannot be used by anybody except by the petitioner who is the purchaser of the portion already sold or with his permission. On February 15, 1990, the petitioner entered into an agreement with Mrs. Pushpa Rani, the owner of the property to buy the rest of the land, namely, 5,732 square feet, for a sum of Rs. 32,50,000. In accordance with section 269UC of the Income-tax Act, a statement in Form No. 37-I was filed on March 9, 1990, before the respondent, seeking a certificate of no-objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order stating that the respondent will exercise neither of those powers but simply return the statement as being defective, is without jurisdiction. The further argument is that the reasons given in the impugned order are neither germane nor warranted under Chapter XX-C of the Income-tax Act. The question whether the sub-division of the property is in accordance with law or not is not within the province of the respondent. Referring to the definitions of the words "immovable property" and "transfer" in section 269UA, it is contended that it is open to the parties to enter into an agreement for sale of a part of or a portion of an immovable property. As against this, the contention of Mrs. Nalini Chidambaram, learned counsel for the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has to act only within the four corners of law and cannot seek to add to or infer any words or sentences beyond what is enacted by Parliament. But the court can examine the provisions of law and interpret it in such a manner as to subserve the objects and reasons without doing violence to the language employed by the statute. With the above background let us examine the provisions of law. I will refer only to those provisions which are relevant for this case. Section 269UC(1) insists on an agreement in respect of transfer of immovable property of such value exceeding Rs. 10 lakhs. Section 269UC(2) requires the agreement to be reduced in the form of a statement and section 269UC(3) read with rule 48L and Form No. 37-I prescribe the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, whether the property can be used or developed by any other person other than the transferee under the agreement and such other related questions. So long as there is one purchaser who is willing to purchase the property with defects, if any, in the property or its division into two parts, can the Income-tax Department probe into the question for the purpose of Chapter XX-C of the Income-tax Act ? It appears to me that there is no scope for such examination. Either the appropriate authority should be prepared to exercise the right to purchase with all the defects, shortcomings and limitations or he should issue a certificate of no objection. I do not think that the respondent was justified in going into the manner of division of the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck to determine the nature of the new and sophisticated legal devices to avoid tax and to expose the devices for what they really are and to refuse to give judicial benediction, it is necessary to remember, as observed by Lord Reid in Greenberg v. IRC [1971] 47 TC 240 (HL) that one must find out the true nature of the transaction. It is unsafe to make bad laws out of hard facts and one should avoid subverting the rule of law." Therefore, I have given my anxious thoughts to the issues involved in the case and examined the correctness of the last sentence of the impugned order which is as follows : "The statement is, therefore, rejected and is deemed to be returned to you." Following this trend, I proceed to ask the question, as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect, is unlawful, the agreement is void." I gave opportunity to both counsel to address arguments on this aspect of the case. Mr. K. C. Rajappa, learned counsel for the petitioner, says that neither under the Madras City Municipal Corporation Act nor under the Development Control Rules of the Town and Country Planning Act, is there a prohibition against the sale of a property privately sub-divided without sanction from the appropriate authorities. Reference is made to section 234 of the former Act and rule 19 of the latter Rules. The only inhibition is against the grant of a building permit. The authority may refuse permission on the ground that the layout is not authorised or the sub-division is not authorised. But we are now at a much ea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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