S KRISHNAN Vs. U V SHAHADADPURI

JUDGEMENT

(1.) BY an Agreement dated 19th October, 1994 the Petitioner herein agreed to purchase from Respondent No. 5 Flat No. 13 in supriya Building of Homely Co-operative Housing society situated at Chembur, Mumbai, for a consideration of Rs. 19,50,000/ -. The Agreement discloses that the Petitioner paid to the transferor i. e. Respondent No. 5 an amount of Rs. 10. 00 lakhs on October 7, 1994 i. e. prior to the execution of the Agreement dated 19th October, 1994. The balance amount of Rs. 9,50,000/- was to be paid within 30 days of obtaining the certificate under section 269ul (3) of the Income tax Act, 1961 from Respondents Nos. 1 to 3. The transferee i. e. the Petitioner and the transferor i. e. Respondent No. 5 submitted the Agreement to the Appropriate Authority under section 269uc of the Income Tax Act on 28th October, 1994. The Appropriate Authority by notice dated 11th november, 1994 called upon Respondent No. 5 to furnish information/documents referred to therein on or before 21st November, 1994. The Homely Co-operative Housing Society Limited, Respondent No. 7 furnished the information in their possession to the Appropriate Authority by letter dated 1st december, 1994.

(2.) THE Appropriate Authority on 5th January, 1995 issued notice under sub-section (1a) of section 269ud of the Income Tax Act, 1961 to the petitioner and Respondent No. 5 setting out therein that the built up area of the flat was 751 sq. ft. and the rate per sq. ft. for built up area as per the agreement works out to Rs. 2. 545/ -. Considering the said facts and after an inspection, the Appropriate Authority had found the rate of the property to be low. Taking those facts into consideration the Appropriate Authority was of the view that there is significant under-valuation of the subject property. The Appropriate authority as such was pleased to issue show cause notice as to why order should not be made in accordance with the provisions of section 269ud (1)of the Income Tax Act, 1961. The noticees were requested to attend before the Appropriate authority on 13th January, 1995 or to make written submissions. Along with the notice sale instances were given which showed the date of the Agreement, the built up area sq. ft. and rate per sq. ft.

(3.) THE Petitioner showed cause by his representation dated January 11, 1995. The petitioner, in respect of all three sale instances referred to by the Appropriate Authority, represented to the Appropriate Authority that bezzola Commercial Complex was one of the most prestigious commercial complex in the suburbs of bombay; Kaumudi Building was also a commercial building and Ganga Estate was a posh residential complex. The Petitioner also forwarded the photographs of the three buildings. The Petitioner also relied on two sale instances, one in respect of a building situated at Maitri Park and another situated at Nellai, Swastik Park. The photographs in respect of the two buildings were also filed. The Petitioner also relied upon the Accommodation times of the relevant period when the agreement to purchase the flat had been entered into to show that at Chembur residential properties were valued between Rs. 11,200-3,000/ -. The Petitioner also relied on the report of Government Valuer and some other documents. Petitioner also disclosed the reasons for sale; the relationship of the transferor and transferee; details of the sale including conditions of the building and its location and an additional fact that he had paid a further sum of Rs. 11,10,000/- to be adjusted against the balance due and payable. The petitioner also sought some additional time from the Authorised Officer as the time given by him to file reply was not sufficient.