VISHWA BANDHU PEARYELAL GUPTA Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) OF the IT Act, 1961 ('the Act' for short) whereby 'Abhishek Bungalow' situated at 4 Bungalows, Off Linking Road, Andheri (West), Mumbai - 400 058 ('property in question' for short) is sought to be purchased by the Appropriate Authority under Chapter XX -C of the Act. agreed to purchase from the respondent No. 5 the property in question for a lump sum price of Rs. 45,00,000 subject to the tenancy of respondent No. 6. On an application made in Form No. 37 -I the Appropriate opportunity of hearing to the petitioners.

(2.) AGGRIEVED by the said order, the petitioners filed a writ petition bearing No. 93 of 1990. The said writ petition was and the matter was remanded with directions to reprocess the application of the petitioners in the light of the judgment of the Supreme Court in C.B. Gautam vs. Union of India (1992) 108 CTR (SC) 304 r/w (1993) 110 CTR (SC) 179 : (1993) 199 ITR 530 (SC). property in question agreed to be purchased by the petitioners should not be purchased under s. 269UD(1) of the Act. In the said show -cause notice, the Appropriate Authority relied upon four sale instances in the neighbouring JVPD and Juhu localities to establish that the property in question was undervalued by 15 per cent of the fair market value. of the Act on various grounds set out therein. In the said reply, the petitioners inter alia stated that even on the basis of sale instances set out in the impugned show cause, it cannot be said that there is undervaluation by 15 per cent of the fair market value. By the said reply, the petitioners called upon the respondents to furnish particulars of the sale instances referred to in the show -cause notice. The petitioners also relied upon a sale instance in the same society wherein similar property has been sold for a lesser price and the sale of that flat has been approved by the Appropriate Authority under Chapter XX -C of the Act. Accordingly, it was submitted that there was no undervaluation and the show - cause notice be dropped.

(3.) CHALLENGING the said order, the present petition is filed. During the pendency of the writ petition, in view of the stay Mr. Pardiwala, learned counsel appearing on behalf of the petitioners submitted that the impugned order dt. 25th Authority has not determined the fair market value of the property in question so as to arrive at a conclusion that there is any undervaluation to the extent of 15 per cent of the fair market value. Secondly, it is contended that the impugned order passed without furnishing particulars relating to the sale instances set out in the show -cause notice, is in breach of the principles of natural justice. Thirdly, it is contended that even if the average sale prices of the sale instances set out in the show -cause notice are taken as the fair market value, there is no undervaluation to the extent of 15 per cent as enunciated by the apex Court in the case of C.B. Gautam (supra). Fourthly, some of the similar properties situated in the same locality which were purchased by the Appropriate Authority were put to auction during the relevant period at a price less than the price of the petitioners, but the same could not be sold, which clearly shows that there was no undervaluation of the property in question. Lastly, Mr. Pardiwala submitted that the sale instances pointed out by the petitioners has not been considered by the Appropriate Authority. For all the aforesaid reasons, Mr. Pardiwala submitted that the impugned order is liable to be quashed and set aside.