BHATIA APARTMENTS PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE facts of this case revolve in a narrow compass and are not disputed. These facts may be stated first, before coming to the controversy involved in this writ petition.

(2.) AN agreement dt. 30th Sept., 1986, was entered into between the petitioner, on the one hand, and respondents Nos. 4 to 6, on the other hand. By the said agreement, respondents Nos. 4 to 6 agreed to sell the property bearing No. B 23A, Friends Colony (West), New Delhi, measuring about 350 sq. yds. The total sale consideration was fixed at Rs. 16,50,000. Out of this, a sum of Rs. 1,50,000 was paid by three pay orders all dt. 25th Sept., 1986. The balance amount of Rs. 15,00,000 was to be paid by the petitioner to respondents Nos. 4 to 6 at the time of registration of the sale deed. Physical possession of the property in question was also to be handed over by respondents Nos. 4 to 6 to the petitioner at the time of execution and registration of the sale deed. As on 30th Sept., 1986, Chapter XX A of the IT Act, 1961 (hereinafter referred to as "the Act", for short) held the field. This Chapter titled "Acquisition of immovable properties in certain cases of transfer to counteract evasion of tax" lays down various provisions as per which "certain transactions" relating to immovable property are to be registered with the competent authority and where the competent authority has reason to believe that any immovable property of the fair market value exceeding Rs. 1 lakh has been transferred by any person to another person for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed between the parties has not been duly stated in the instrument of transfer with the object of facilitating the reduction or evasion of the liability of the transferor to pay tax, etc., the competent authority may initiate acquisition of such property and the manner in which the property can be acquired is enumerated in different provisions of Chapter XX A. Significantly, Chapter XX C was inserted by the Finance Act, 1986, w.e.f. 1st Oct., 1986, vide Notification No. S.O. 480(E), dt. 7th Aug., 1986. This Chapter deals with "Purchase by Central Government of immovable properties in certain cases of transfer". Sec. 269U which is the first section of this Chapter clearly lays down that the provisions of this Chapter shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different areas. By notification dt. 7th Aug., 1986, the appointed date was fixed as 1st Oct., 1986. Sec. 269UC under this Chapter lays down certain restrictions on transfer of immovable property and specifically stipulates that no transfer of any immovable property of value exceeding Rs. 5 lakhs or as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends to transfer immovable property (vendor) and the person to whom it is proposed to be transferred (vendee) in accordance with the provisions of sub s. (2) at least within three months from the intended date of transfer. It further prescribes that the agreement by which the immovable property, the market value of which exceeds Rs. 5 lakhs is intended to be transferred shall be reduced in writing in the prescribed form (i.e., Form No. 37 I) and the same shall be furnished to "appropriate authority" in such manner and within such time as may be prescribed. Rule 48L of the IT Rules prescribes the manner in which and the time within which the statement has to be furnished. Form No. 37 I has been prescribed for this purpose. The petitioner submitted the statement in Form No. 37 I before the IT authorities/appropriate authority, on 13th Oct., 1986. Thereafter, it received impugned order dt. 15th Dec., 1986, passed by the "appropriate authority" ordering the purchase of the property in question by the Central Government at an amount equal to the apparent consideration of the transfer of the said property, i.e., Rs. 16.5 lakhs. The petitioner has challenged this order in this writ petition.

(3.) LEARNED counsel for the petitioner, during the course of arguments submitted that even the agreement of sale dt. 30th Aug., 1986, was a "transfer" of an immovable property as per cl. (b) of sub s. (1) of S. 269AB which falls in Chapter XX A. In support of this proposition, reliance was placed on the following judgments : (i) Captain Sanjeev Sethi vs. Union of India (1992) 101 CTR (Del) 81 : (1992) 195 ITR 338 (Del) : TC 3R.1019; (ii) Multi Rise Towers (P.) Ltd. vs. Appropriate Authority (1995) 124 CTR (Cal) 391 : (1995) 211 ITR 102 (Cal) : TC S3.204; and (iii) Sunshine Travels & Tours (P) Ltd. vs. Union of India (1995) 213 ITR 749 (Del).