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2011 (12) TMI 145 - HC - Income TaxPreemptive purchase by the Central Government u/s 269 UD (1) – alleged undervaluation of property - cost of construction of flat to be received in lieu of consideration taken and its fair market value ignored while valuing property resulting in undervaluation – Petitioners agreed to give possession of the subject property on compliance with the obligations of the Transferee under the Agreement by Appropriate Authority - Appropriate Authority has not tendered the payment to the owners and amount was deposited by the Central Government in the P.D. Account of Appropriate Authority prior to the passing of the impugned orders - Difference in total consideration valued and as stated in order to be payable to transferor - Held that:- By ignoring fair market value of flat during valuation, there was an inherent flaw in the valuation of the said property by the Valuation Officer. Appropriate Authority has mechanically accepted the valuation and on this count alone the impugned orders would stand vitiated. Further Section 269 UF (1) stipulates consideration for such purchase, an amount equal to the amount of the apparent consideration. There was complete non application of mind on the part of the Appropriate Authority in stating in the impugned order that the amount payable was Rs.18,68,430/ when the apparent consideration was admittedly Rs.25,14,480/. Quantum of deposit is invalid Moreover, neither dispute was to title of property nor to the persons who should receive the payment, thereby, conditions mentioned in 269UG(2) and 269UG(3) are not satisfied which permit the Central Government to deposit the purchase price with the Appropriate Authority (instead of tender to the owners). Therefore, the deposit made in the P.D. account of the Appropriate Authority by the Central Government was impermissible and not in accordance with law. In view of the failure on the part of the Appropriate Authority to tender the apparent consideration within the period set out in Section 269UG of the Act, it has to be held that the order passed under Section 269UD(1) of the Act stood abrogated and the property is revested to the Petitioners. - Decided in favor of assessee.
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