TMI Blog1994 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ny which is a sister concern of Gokak Patel Volkart Ltd. On July 23, 1992, the order of amalgamation of petitioner No. 1-company with Gokak Patel Volkart Ltd. was passed by this court. The petitioner-company, while in the occupation of the flat since the year 1976, was reimbursing Gokak Patel Volkart Ltd., the rent of Rs. 1,200 per month together with the society charges which Gokak Patel Volkart Ltd. was required to pay to Farrokh Adi Ghandhy. On March 1, 1983, Farrokh Adi Ghandhy sold the flat to Gokak Patel Volkart Ltd., for a consideration of Rs. 4,00,000. Gokak Patel Volkart Ltd. entered into an agreement dated June 29, 1984, with petitioner No. 1-company to sell the flat for a consideration of Rs. 17,00,000. Along with the flat, pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of such property. The petitioner-company filed the requisite statement in respect of the transfer of the flat with the competent authority on September 20, 1984. The competent authority issued a show-cause notice dated May 10, 1985, in exercise of the powers under section 269D(1) of the Income-tax Act. The show-cause notice, inter alia, recites that the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration by more than 15 per cent. of the consideration of such transfer as agreed between the parties and, therefore, the same has not been truly stated. The show-cause notice further recites that the consideration was not truly stated with the object of avoiding tax both by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings by issuance of the impugned show-cause notice dated May 10, 1985, had prepared a note and the copy of which is annexed at exhibit "A" to the petition. The note recites that the property in dispute is a residential flat situated on the fourth floor of Meharabad Building, Warden Road, Bombay. The competent authority refers to an instance of sale of flat No. F-4, Palacimo, Silver Oake Estate, Bhulabhai Desai Road, Bombay 400 026. The agreement for sale in this instance was executed on February 15, 1984, and the area agreed to be sold was 1,782 sq. ft. built-up and the consideration was Rs. 21,00,000. Relying upon this instance, the competent authority felt that the fair market rate is Rs. 1,200 per sq. ft. Only on this basis, the competen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not indicate any material to arrive at such a conclusion. Shri Dastur is right in submitting that the fact that the flat in dispute was in the occupation of petitioner No. 1-company right from the year 1976 was a relevant circumstance to ascertain whether the consideration mentioned in the agreement was fair or otherwise. Even assuming that the competent authority comes to a conclusion that the consideration is not truly stated in the document, still in the absence of any material, the competent authority could not have been satisfied that the consideration was not truly stated only with a view to evade the liability of tax. In our judgment, in the absence of any material, the initiation of proceedings was without jurisdiction and the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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