SONA BUILDERS Vs. UNION OF INDIA

JUDGEMENT

(1.) THE learned single judge by his order dt. 18th April, 1994 dismissed three writ petitions - (1) Writ Petition No. 3492/93, Rajendra Giriraj Prasad Tiwari vs. Union of India; (2) Writ Petition No. 4667/93 M/s Sona Builders vs. Union of India; and (3) Writ Petition No. 1093/94 M/s Sona Builders vs. Union of India. Three Special Appeals which have come up for hearing, are (1) DB Civil Special Appeal No. 320/94 - M/s Sona Builders vs. Union of India arising out of Writ No. 4667/93; (2) Special Appeal No. 585/96 - Rajendra Giriraj Prasad Tiwari vs. Union of India arising out of Writ Petition No. 3492/93 and (3) Special Appeal No. 377/94 - M/s Sona Builders vs. Union of India arising out of Writ Petition No. 1093/94. They are being disposed of by a common order as identical facts and similar questions of law are involved.

(2.) WRIT Petition No. 3492/93 was filed by the vendor Rajendra Giriraj Prasad Tiwari for quashing of the show cause notice dt. 21st May, 1993 under s. 269UD(1) of the IT Act, 1961 issued by the Dy. CIT (Appropriate Authority), New Delhi, regarding transfer of immovable property located at D -34, Saraswati Marg, Bani Park, Jaipur. In the notice it was mentioned that the statement in Form No. 37 -I under r. 48L of the IT Rules, 1962 was filed on 9th March, 1993 in respect of the said property in which the apparent consideration was disclosed as Rs. 28,50,000. This statement was signed by the petitioner, Rajendra Giriraj Prasad Tiwari as transferor and all the partners of the partnership firm, M/s Sona Builders as transferees. Through the said notice the appellants attention was invited to the sale instance of a property No. D -37, Sawai Madho Singh Road, Bani Park, Jaipur, which was auctioned on 3rd October, 1991 where the land rate worked out was Rs. 3,896 per sq. mtr. The plot area of the said distance was 1411.47 sq. mtr. If an adjustment of 25 per cent on account of time -gap was made the rate worked out to Rs. 3,895 + 975 equal to Rs. 4,870 per sq. mtr. On this basis the land value of the said property worked out to be Rs. 4,870 x 954.23 equal to Rs. 46,47,000 as against disclosed apparent consideration of Rs. 28,50,000. Therefore, the apparent consideration was considered low. The prayer for quashing of the order dt. 31st May, 1993 passed by the Appropriate Authority of Income -tax under s. 269UD(1) was also made. The facts set up by the appellant was that he was the absolute owner of the plot No. D -34, Bani Park, Jaipur by virtue of a registered will dt. 7th July, 1970 duly executed and registered by his father. The appellant had agreed to sell the said immovable property measuring 1,141.25 sq. yds. or 955 sq. mtrs. to M/s Sona Builders for construction of multi -storied building for consideration of Rs. 28,50,000. The purchaser had paid Rs. 9,50,000 as part of the sale consideration. The appellant and all the partners of M/s Sona Builders, Jaipur had submitted the statement of transfer of the immovable property in prescribed Form No. 37 -I as provided in r. 48L of the IT Rules, 1962 before the Appropriate Authority under s. 269UC of the IT Act, 1961 on 9th March, 1993 along with the application for condonation of delay in submitting the said statement as required under s. 269UC of the IT Act. The District Valuation Officer (Appropriate Authority), IT Department, Jaipur had issued the notice to the appellant (transferor) and to M/s Sona Builders (transferee) and called upon both these persons to submit the required documents duly mentioned in the said notice dt. 19th March, 1993 on or before 29th March, 1993 and also proposed to inspect the property at 10.00 a.m. on 30th March, 1993. The required documents and information were submitted by the appellants vide letter dt. 29th March, 1993. The valuation report by the approved valuer - M/s K. N. Bhargava & Co. was also submitted which showed the valuation to be Rs. 26,88,000 on 7th February, 1993. The DVO (Appropriate Authority), IT Department, himself had estimated the market value of said property in question less than 15 per cent higher of the apparent consideration, after inspecting the site and considering the necessary factual matrix and the valuation report of the approved valuer dt. 19th October, 1993. The appellants case was that in spite of that factual aspect the Dy. CIT (Appropriate Authority), IT Department had issued the notice. The notice dt. 21st May, 1993 was served on 26th May, 1993. The appellant submitted his objection vide letter dt. 31st May, 1993. Shri Mahipat Raj Mohnot, the Chartered Accountant, appeared before the Appropriate Authority and raised the objection regarding the valuation of the said property. It was also stated that the right of the pre -emptive purchase shall not be exercised in the facts and circumstances of the instant case. The appellant (petitioner) challenged the validity and legality of the action of the respondents for issuing show cause notice dt. 21st May, 1993 and for passing the order dt. 31st May, 1993 under s. 269UD(1) of the 1961 Act, for purchasing the said immovable property in question by Central Government at an amount equal to the amount of the said consideration. The vendees M/s Sona Builders made similar prayer in its Writ Petition No. 4667/93.

(3.) THE agreement dt. 11th March, 1992 was neither produced at the time of hearing nor was referred in the agreement dt. 1st February, 1993 nor was submitted along with the Form No. 37 -I and thus the Appropriate Authority was right in not considering the same. In our view, the Appropriate Authority did not commit any mistake while passing the order under s. 269UD(1) and if the transferor and the transferees are permitted to place them after the order under s. 269UD(1), it may lead to improper filing of documents on record.