TMI Blog2008 (8) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... inding that there had been undervaluation of property with a view to evade tax. Mere observation that prices were rising was not sufficient. The order of pre-emptive purchase was not valid. - 558 of 1995 - - - Dated:- 29-8-2008 - ANOOP V. MOHTA and C.L. PANGARKAR JJ. M. G. Bhangde for the petitioner. A. S. Jaiswal for the respondent JUDGMENT The judgment of the court was delivered by 1. ANOOP V. MOHTA J.— The petitioner has challenged the order dated February 24, 1995, passed under sec 269U0(1) of the Income-tax Act, 1961 (for short "the Act") and the order dated February 24, 1995, passed under section 269UE of the Act by respondent No. 1, thereby ordered for pre-emplive purchase under Chapter XX-C of the Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arket value was not determined by the respondent-Authority as required under the law. There is no mention about the fair market value of the property. There is also nothing recorded that apparent consideration is less than the fair market vatue by 15 per cent. There is force in the submission that unless the fair market value of the PUC (property under consideration) is determined, there cannot be any declaration with regard to the aspect of under-valuation. In Mehta Mody and Co. v. Appropriate Authority [2010] 320 ITR 302 (Bom); [2008] 4 MLJ 642, it is observed in paragraph 9 as under (page 306 of 320 ITR): "Having regard to the aforesaid facts and circumstances of the case and alter considering all the above submissions it is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial the grounds on which the order of pre-emptive purchase is made. That obligation does not stop by merely rejecting the submissions made before it. The rejection of submissions made by the vendors or the transferee or the persons interested in the property, does not lead to a consequence that grounds for making pre-emptive purchase exists. The sine qua non is that reasons must exist, on the material placed before it, for supporting the action taken for pre-emptive purchase under section 269UD of the Act. The order clearly falls short of this requirement." 6. It is clear that the Appropriate Authority must come to a definite conclusion that undervaluation is by more than 15 per cent. of the fair market value. ( Sarwarben Temas K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout recording such an intention to evade tax. 8. Even on the merits, we have noted that the respondents-Authority failed to consider the detail chart and comparative rates given by the petitioner to justify their case. There are no reasons either in the show-cause notice and/or in the impugned orders while rejecting the details given by the petitioner. The petitioner, in their reply/written submission dated February 19, 1995, elaborated even on the merits, which was not properly considered by the Authority before passing the impugned order. 9. In view of this, we are of the view that the impugned orders passed by the Appropriate Authority are illegal and invalid as the same were passed without determining a fair market value and p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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