VIJAY SURENDRA JAYAKAR Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner has challenged the order passed under Section 269UD(1-A) of the Income-tax Act, 1961 passed by the appropriate authority for purchase of the flat of the petitioner for the Government of India.

(2.) To state in brief, the petitioner is the owner of the flat No. 16, admeasuring 860 sq.ft. built up area, situated on the fourth floor of the building known as Mahim Jolly Cottage Co-operative Housing Society Limited at Bhagoji Kir Marg, Mahim. The petitioner agreed to sell the said flat to the respondent No. 5 for a consideration of Rs. 17,50,000/-. Accordingly, an agreement for sale was entered into between the petitioner and the respondent No. 5 on 4.9.1994 through a broker J.D. Pingale. An amount of Rs. 9 lac was paid by the respondent No. 5 to the petitioner at the time of execution of agreement for sale and the balance amount was to be paid on or before 30th November, 1994. Form No. 37-I giving details of the said transaction and duly signed by the petitioner and the respondent No. 5, was handed over to the broker for presentation to the appropriate authority. According to the petitioner when he entered into the agreement, he had decided to quit the job with the bank and to go to Pune and, therefore, he had agreed to sell the flat. However, because of certain health problems, he decided to continue to in Bombay and, therefore, both the parties mutually canceled the said agreement for sale on 22/23rd September, 1994 and whole of the earnest money was repaid by the petitioner to the respondent on 28.9.1994. Without being aware of the cancellation of the agreement, the broker filed form No. 37-I before the appropriate authority on 26.9.1994. By letter dated 7.10.1994, the petitioner informed the appropriate authority about the cancellation of agreement for sale and requested him not to proceed with the matter. Petitioner received show-cause notice dated 25.11.1994 under Section 269UD(1-A) from the appropriate authority as to why an order should not be passed for purchase of the same flat by the Government of India as there was substantial difference in the apparent consideration and the market value of the flat. In his reply, he contended that the agreement was already cancelled and that the flat was agreed to be sold as per the market value. However, the appropriate authority passed the final order under Section 269UD(1) on 13.12.1994 against the petitioner.

(3.) In the said order, there is reference to 3 transactions of different properties, on the basis of which appropriate authority had come to conclusion that the market value of the subject property was about Rs. 5,000/-per sq.ft. While the apparent consideration was only Rs. 1933/-per sq.ft. According to the petitioner, the properties in three transactions relied upon by the appropriate authority are far away from the subject property. Those properties are quite close to Shivsena Bhavan and Shivaji Park and properties in that area carry higher market price in comparison to the price of the properties in the vicinity where the subject flat is situated. In support of this contention, he also relied upon a transaction between Mr. Ashutosh Arvind Kumbhakoni and Mrs. Nirmala Pandit and others by which Mr. Kumbhakoni had purchased the flat No. 9 on the second floor of the same building, in which the flat of the petitioner is situated, for a consideration of Rs. 18,51,000/-as per the agreement dated 15th May, 1993.