TMI Blog2014 (8) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... a constructed property. This is a major difference and allowance should be made not only by reducing the cost of construction of the compared property but also other differences. All these would have to be factored in while determining the fair market value of the said property. This admittedly has not been done in this particular case. Therefore, the impugned order is unsustainable. It has been also pointed out that the impugned order failed to consider the market value of 3000 sq.ft. built up area to be given by the petitioner to the transferor society i.e. respondent No.4. This was being paid as part of the consideration for the purchase of the said property. However, the Appropriate Authority has only considered the cost of construction to arrive at the apparent consideration of the said property and not its market value. This alone would lead to proper determination of value of the said property. Petitioner handed over a letter dated 10 May 2012 from the Commissioner of Income Tax to the petitioner acknowledging the receipt of ₹ 39,48,339/- by the Appropriate Authority from the petitioner. The letter is dated 10 May 2012 is taken on record and marked “X” for ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale instance of compared 1st floor property is not identical/similar to the said property inter alia for the following reasons : (i) Said property being transferred by respondent No.4 is a lease hold property which is taken on lease of 99 years by the petitioners; (ii) The compared 1st floor property is situated within the local limits of Pune Municipal Corporation. The said property was situated beyond the local limits of Pune Municipal Corporation; (iii) The petitioner was required to give a constructed area of 3000 sq. ft. to respondent No.4 transferor society as a part of consideration for purchase of the said land; (iv) Various encumbrances on the said property such as obtaining permission from the Registrar of Co-operative Societies and under the Urban Land Ceiling Act etc.; and (v) In any case, if one deducts the cost of construction and 20% reasonable profit from the sale value of constructed compared 1st floor property then the consideration being paid for the said property by the petitioner was higher; (e) On 24 February 1995, Appropriate Authority passed the impugned order acquiring the said property after having granted the petitioner a personal heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India [2004] 271 ITR 229 wherein this Court has distinguished the earlier decision in Vimal Agarwal (supra); (b) The mere not mention of fair market value in the show cause notice or in the impugned order would not invalidate the proceeding for acquisition. In support, reliance was placed in Shrichand Raheja of Bombay Indian Inhabitant v. S.C. Prasad [1995] 213 ITR 33 and (c) Reiterate the reasons mentioned in the impugned order dated 24 February 1995. On the basis of the above, it is submitted that this Court should not interfere with the impugned order. 5. Chapter XXC of the Act while come into force w.e.f. 1986 was essentially introduced with the object of curbing tax evasion on account of under statement of consideration (sale price) in respect of immovable properties. It gives powers to the Appropriate authorities to acquire immovable properties which are agreed to be sold, However, as held by the Supreme Court in C.B. Gautam v. Union of India [1993] 199 ITR 530 the power is Chapter XXC of the Act is not an unfettered discretion on the part of the Appropriate Authorities. This power can be exercised only when there is under valuation of property as shown in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir market value of the property, no question of preemptive purchase can arise. Therefore, determination of fair market value is a sine qua non to determine whether or not the apparent consideration is less by 15% or more of fair market value. This exercise has not been done in the impugned order. 8. The contention of the revenue that the absence of an order in terms stating the fair market value of the property would not make the order under Chapter XXC of the Act is bad in law. It is submitted that the comparable property sale price is in fact the fair market value of the said property. The reliance placed upon Vidarbha Engg. Industries (supra) is misplaced as in that case the compared property and the property being sold were identical in all respects being adjacent properties. Therefore, in the facts of that case no allowance for difference could be made as the properties were identical. In such a case the sale value of the adjacent property could form the fair market value of the property being sold. In the present case the said property and the compared 1st floor property are not identical/similar in all respect i.e. compared 1st floor property is situated within the the Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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