STERLING HORTICULTURE AND RESEARCH LIMITED Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) THE fourth respondent herein, as owner of the property in question, viz., an extent of 6,180 sq. metres of vacant land and superstructure in an area of 4,406.92 thus in all 10,587 sq. metres, bearing door No. 5, Greenways Road., Adyar, Madras, now known as No. 4, Bishop Garden Extension, Raja Annamalaipuram, Madras-28, in the Sub-Registration District of Mylapore, Registration District of Madras-Chengalpattu, entered into an agreement on July 27, 1995, to sell the abovesaid property to the appellant herein for a total consideration of Rs. 19,75,00,000. As per the provisions of the Income-tax Act, the appellant along with the fourth respondent submitted Form No. 37-1 on July 27, 1995, itself. As per the agreement, the appellant paid a sum of Rs. 75,00,000 as advance. It was agreed between the parties that the purchaser, viz., the appellant herein, should pay the balance sale consideration within fifteen days from the date of receipt of the approval from the office of the appropriate authority.

(2.) THE appropriate authority after receiving the said Form No. 37-1 issued a notice to the parties under Section 269UD(1A) of the Income-tax Act, 1961. THE District Valuation Officer, inspected the property on October 9, 1995, followed by another inspection by the members of the appropriate authority on October 20, 1995. Based on the inspection and the value of the other properties, which the appropriate authority considered comparable, the authority prima facie came to the view that there was significant undervaluation to the extent of 51.37 per cent, giving rise to a presumption of attempt to evade tax.

(3.) BEING aggrieved by the order of the learned single judge, the appellant has filed the above writ appeal. In the memorandum of grounds of appeal, a two fold attack has been made, viz., (i) that the learned single judge having arrived at various findings which are in favour of the appellant ought to have only quashed the impugned order and ought not to have, after setting aside the impugned order, remitted the matter back to the appropriate authority for fresh disposal ; (ii) and that the order of the learned single judge in directing the appellant to deposit with the appropriate authority the sum paid by the Central Government as the discounted consideration together with interest thereon at the rate of 15 per cent, per annum from the date of such payment (December 9, 1995) by the Central Government to the transferor, viz., the fourth respondent till the date of deposit by the appellant within a period of six weeks from the date of the judgment and that only on such deposit being made by the appellant, the appropriate authority shall make a fresh disposal of the matter in accordance with law, after hearing the parties, within four weeks thereafter, is improper and cannot be justified.