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2016 (6) TMI 204 - HC - Income TaxAcquisition of property - The fair market value of the property in question was determined at ₹ 73,72,495/- and since it exceeded the declared consideration by 30.48%, the conditions of Section 269 UD were held to be satisfied. - Rejection of bid - whether the ITD was agreeable to re-auction the property - Held that:- Respondent No. 3 for rejecting the bid of the Petitioners by the order dated 4th October, 2013 by the CCIT are several. One was that the sale was never confirmed on account of the interim order of this Court. The second was that by the letter dated 11th October 2004, the bidders, in fact, requested for refund of the earnest money along with interest @ 12% per annum. Thirdly, although the ITD had requested the Court to confirm the sale, the Court did not. In its order dated 27th September 2012, the Court enquired whether the ITD was agreeable to re-auction the property. The CCIT contends that the Petitioners were aware of the interim order dated 14th February 1995 and despite that participated in the auction. Fourthly, it is pointed out that while adjusting the value using the cost inflation index the price of the property in 2013 would be ₹ 5.07 crores. Further using the cost inflation index the original sale consideration worked out to ₹ 2.04 crore in 2013. It is mentioned that the present value on balance consideration using the cost inflation index worked out to ₹ 4,48,65,348. It is further pointed out that a re-auction is required to discover the current market price. Lastly a reference is made to the terms and conditions in terms of which the CCIT has a right to reject any bid. Reference is also made to Clause 15 of the terms and conditions of the auction under which a bidder is required to pay 25% of the bid amount, i.e. ₹ 35 lakh, within thirty days, i.e. by 16th March, 1995. The CCIT concludes that the earnest money ought to be refunded to the Petitioners in terms of Clause 11 of the terms and conditions of the auction. The only relief that can be granted to the Petitioners is to direct the ITD to return the earnest money to the Petitioners forthwith and in any event not later than four weeks from today. However, considering that the Petitioners' bid was rejected only in 2013, nearly 18 years after the bid it was first made, it appears to be reasonable to direct the ITD to refund to the Petitioners the earnest money of ₹ 16.25 lakhs deposited by them together with interest @ 12 per cent per annum from 15th February 1995, till the date of the refund, which shall not be later than four weeks from today.
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