TMI Blog1999 (9) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... powers under section 269UD(1) of the Income-tax Act, 1961 (for short "the Act"), directing purchase of the said property by the Central Government. Though in the petition various reliefs, including the quashing of the purchase order, have been sought, during the course of motion hearing on July 30, 1998, learned counsel for the petitioners had confined the challenge only to the deduction made by the appropriate authority from the amount payable to the petitioners in terms of section 269UF by applying the principle of discounting as envisaged in section 269UA(b) of the Act. Shorn of elaborate details, the facts material for the purpose of this petition are as under : The petitioners were owners of the aforementioned property. On Septembe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form No. 34A would be issued after sixty days from the date of order under section 269UD(1), i.e., December 31, 1997, and thus, the balance consideration would be due to be paid to the petitioners only on March 15, 1998, i.e., 15 days from the date of issue of ITCC. Hence, the present petition. In the writ petition, as also before us, it is not seriously disputed by the petitioners that the appropriate authority was entitled to apply the principle of discounting envisaged in section 269UA(b) as the payment of the entire sale consideration in terms of the agreement to sell was not to be made on the date of agreement but 75 per cent. of it was to be paid on a future date. But the grievance is that the doctrine of discounting should have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for transfer referred to in sub-section (1) of section 269UC. Section 269UF provides that when an order of purchase is made, the Central Government shall tender by way of consideration for such purchase an amount equal to the amount of the apparent consideration to the person entitled thereto in terms of section 269UG within a period of one month from the end of the month in which the immovable property vests in the Central Government. Failure to tender the whole or part of the said amount results in abrogation of the purchase order and re-vesting of the property in the transferor. As noticed above, sub-section (1) of section 269UF of the Act provides that where an order of purchase is made, the Central Government shall pay, by way of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s specified in the agreement for sale, would be the apparent consideration but where the whole or any part of the consideration for such transfer is payable subsequent to the date of the agreement, then the value of consideration payable after the date of agreement is to be discounted. The principle of discounting has been incorporated in Chapter XX-C to adjust the advantage of payment which accrues to a transferor on account of payment in present of what is due in future. According to the scheme of the said Chapter, even though the agreement between the parties provides for deferred payment of consideration for transfer but it has been made obligatory for the Central Government to tender the entire consideration within the stipulated perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er such date shall be deemed to be the discounted value of such consideration, as on the date of such agreement for transfer, determined by adopting such rate of interest as may be prescribed in this behalf. From the plain reading of the said provision it is clear that where the payment of any part of the consideration, as mentioned in the agreement to sell, is deferred to a future date, the value of such consideration payable after the said date agreed between the parties on the execution of the agreement is, by statutory fiction, deemed to be the discounted value of such deferred consideration, as on the date of such agreement for transfer to be deter mined by adopting the rate of interest prescribed in rule 48-I. This is a clear mandate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 409 (SC). We are, therefore of the considered view that having regard to the definition of apparent consideration in section 269UA(b), the discounting of the value of consideration payable to the transferor under section 269UF of the Act, has to be done from the amount of consideration, payment whereof is deferred, right from the date of the agreement of sale and not from the date on which either the order under section 269UD(1) is passed or payment is tendered to the transferor, as contended by Mr. Syali, learned counsel for the petitioners. We are fortified in our view by a decision of the Gujarat High Court in Pradip Ramanlal Sheth v. Union of India [1993] 204 ITR 866 and of the Allahabad High Court in Manik Chand Sethia v. Union o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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