DURGA DASS UPPAL Vs. UNION OF INDIA

JUDGEMENT

(1.) Whether the person who has entered into an agreement with the owner to purchase the property having paid some amount as earnest money and advance. is a person entitled to be paid a part of the apparent consideration by the Central Government under Chapter XX-C of the Income Tax Act. on the property vesting in the Central Government, has to be considered in this writ petition. This. order has three parts as follows: (i) Facts (paras 1 to 12); (ii) Differing views of two learned Judges on the question (paras 13 to 15); (iii) Discussion (paras 16 onwards)

(2.) The relevant facts are:- Petitioner is the person who agreed to purchase the property in question from the 4th respondent (referred as the owner) as per an agreement dated 10.9.1988. The petitioner (referred also as 'transferee' and sometimes as 'the agreement holder') agreed to purchase the property fora sum of Rs.28,19,178.00 and as part of the consideration, he paid a sum of Rs-10 lakhs as advance to the owner. As per Section 269 UC of the Income Tax Act, a statement was filed before the appropriate authority in form 37-1. The statement gave all the particulars including the factum of the payment of Rs.10 lakhs by the transferee to the owner. On 7.11.1988, appropriate authority made an order, the relevant part of which reads as follows:-

(3.) The above order was challenged by the transferee by filing a writ petition (C.W.P. 2640/1988) on 19.11.1988 (hereinafter referred as the earlier writ petition). On 22.11.1988 Rule was issued and an interim order was made by the Division Bench that "the consideration shall not be paid by respondents 1 to 3 till further orders"; 1st respondent was the Union of India; the 2nd respondent was the appropriate authority and the 3rd was the Central Board of Direct Taxes. The owner was the 4th respondent (all are similarly arrayed in the present writ petition also).