VATSALA RAMACHANDRA Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) THE property of the petitioner has been sought to be pre-emptively purchased by the Revenue on the ground that the market value stated in the agreement with the purchaser is not the market value and that the difference between the apparent consideration as worked out by and the market value as determined by the appropriate authority exceeds 15 per cent.

(2.) FORM No. 37-I statement was furnished on October 13, 1992. The consideration for the transfer as set out therein is Rs. 67,50,000. The extent of the property is 4 grounds and 1,555 sq.ft.

(3.) THE provision in the Income-tax Act providing for pre-emptive purchase is a power conferred on the authorities to be exercised only in cases where there has been undervaluation. Though the expression "market value" has not been defined in the relevant section or elsewhere in the Act, the "market value" has to be determined on a rational basis of objective criteria and cannot be left to the whims and fancies of the officer or authority though in the ultimate analysis the market value remains on estimate. That estimate must be based upon a reasonable foundation of fact. It is for this reason that the appropriate authority takes care to find out comparable instances of sale so that the rate at which comparable properties had been sold can be the basis for determining the market value of the property which they are required to estimate.