R VIJAYALAKSHMI Vs. APPU HOTELS LIMITED

JUDGEMENT

(1.) THIS appeal is against the acquittal.

(2.) THE case of the prosecution is that Appu Hotels Limited, Chennai, was the owner of the lands situate at door No. 1, West Cott Road, Royapettah, in an extent of ten grounds and 1,267 square feet; they purchased the property on April 15, 1987, for a sum of Rs. 50 lakhs. THE third respondent, Sunil Estates, which is a partnership firm, entered into an agreement to put up construction in the property and thereafter, take 50 per cent of the constructed area and adjust for the amount invested by the third respondent. While that be so, the ground over the constructed area also could be sold by the third respondent. This amounts to transfer of ownership with respect to 50 per cent of the immovable property, as per Chapter XX-C of the Income-tax Act, 1961. Since the value of such property exceeds Rs. 10 lakhs, accused Nos. 1 and 3 should have informed the appropriate authority constituted under the Income-tax Act, at least three months prior to such transfer, as per Section 269UC and they should have submitted Form No. 37-1, within 15 days from the date of the agreement. THErefore, accused Nos. 1 and 3 and their managers, accused Nos. 2 and 4 are also punishable for the contravention of Sections 269UA, 269UB and 269UL of the Act. Since they did not get "no objection certificate" from the appropriate authority, they have committed offence punishable under Section 276AB. THE Additional Chief Metropolitan Magistrate who heard the case found the accused not guilty of the charge and acquitted all the accused. Aggrieved by the acquittal of the accused, this appeal has been preferred.

(3.) COUNSEL for the respondents submitted that there is no transfer of property at all. A transfer of immovable property of value above Rs. 100 cannot be made without a registered deed. What is contemplated under the agreement is an agreement to build a construction over the property and to hand it over to the owner of the land. By sale of such proposed constructed area, both the owner of the land and the builder who put up the superstructure will take their respective shares. In so far as the agreement that has been entered into, there is no transfer of any interest in the immovable property. There is no buyer or seller in that agreement. It is only a licence given to the builder to construct. The ultimate aim is only to share the profit, it is purely a business transaction and no transfer of interest in the immovable property is involved.