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High Court Of Calcutta
Ruma Pal
HARI KRISHNA KANOI - Appellant
Versus
APPROPRIATE AUTHORITY - Respondent
Matter 3110 Of 1987
Decided On : 09/11/1992
INCOME TAX - CHAPTER XX-C - SECTION 269UD - APPROPRIATE AUTHORITY - PURCHASE OF PROPERTY - APPARENT CONSIDERATION - COMPUTATION - BROKERAGE - RIGHTS OF TRANSFEREE - LOCUS STANDI TO CHALLENGE ORDER - JUDICIAL REVIEW - SCOPE.
Fact of the Case:
The appropriate authority passed an order under Section 269ud(1) of the Income-tax Act, 1961, directing the Central Government to purchase a portion of the premises for a sum of Rs. 72,25,086. The petitioners, who had entered into an agreement with the owner of the premises to purchase a portion of the premises, challenged the order on the grounds that the apparent consideration for the transfer had been wrongly determined by the appropriate authority and that they had no locus standi to challenge the order.
Finding of the Court:
The court held that the petitioners had the locus standi to challenge the order as they had a right to acquire the title to the property and that the appropriate authority had erred in determining the apparent consideration for the transfer. The court also held that the appropriate authority had ignored the intention of the parties in determining the apparent consideration and that the impugned order could not be sustained.
Issues: 1. Whether the petitioners had the locus standi to challenge the order passed by the appropriate authority under Section 269ud(1) of the Income-tax Act, 1961? 2. Whether the appropriate authority had erred in determining the apparent consideration for the transfer?
Ratio Decidendi: 1. The court held that the petitioners had the locus standi to challenge the order as they had a right to acquire the title to the property and that the appropriate authority had erred in determining the apparent consideration for the transfer. 2. The court held that the appropriate authority had ignored the intention of the parties in determining the apparent consideration and that the impugned order could not be sustained.
Final Decision: The court allowed the writ petition and quashed the impugned order. However, the court granted liberty to the appropriate authority to reconsider Form No. 37-I afresh in accordance with law within a period of 60 days from the date of communication of the order and pass decision afresh either directing the Central Government to purchase the premises on the basis of the apparent consideration in the light of the observations made by the court or issue a "no objection certificate" under the provisions of Section 269ul(3) of the Act within the period specified.
( 1 ) THE subject-matter of challenge in these proceedings is an order issued by the appropriate authority on June 5, 1987, under Section 269ud (1)of the Income-tax Act, 1961 (referred to as "the Act"), by which a portion of premises No. 2, Ballygange Park Road, Calcutta, has been ordered to be purchased by the Central Government for a sum of Rs. 72,25,086.
( 2 ) PREMISES No. 2, Ballygange Park Road, Calcutta, covers an area of approximately 52 kathas. The owner of the premises is respondent No. 6. The premises were requisitioned on June 17, 1971, for the occupation of the Ministry of External Affairs under Section 3 (1) of the West Bengal Premises Requisition and Control (Temporary Provisions) Act, 1947. The Ministry of External Affairs, being respondent No. 5, is paying an amount of Rs. 1,300 per month to respondent No. 6 as occupation charges.
( 3 ) ON March 20, 1987, an agreement was entered into between the petitioners and respondent No. 6 under which the petitioners agreed to purchase 40 kathas of the premises together with building and out-houses free from all encumbrances but subject to the requisition. The portion of the premises agreed to be purchased by the petitioners has been described as lot 'a' in the agreement and the portion of the premises retained by respondent No. 6 has been described as lot 'b'. The purpose of purchase of lot 'a' was to construct flats.
( 4 ) IN terms of the agreement, the petitioners were required : (1) to provide a common passage for free access to the portion of the premises retained by respondent No. 6 (lot B ). (2) to construct free of cost for respondent No. 6, a total constructed area of 5,000 sq. ft. in one building containing ground floor, first floor and second floor in lot B with all fixtures such as, doors, grills, sanitary fittings, electrical wirings, etc. , within three years from the date of the sanction of the plan at a cost of Rs. 10 lakhs. (3) to pay a sum of Rs. 73 lakhs by way of consideration ; Rs. 1 lakh simultaneously with the execution of the agreement, Rs. 31 lakhs within one month of the sanction of the plan and Rs. 41 lakhs on or before the registration of conveyance of lot A.
( 5 ) THE agreement provided that the petitioners would be entitled to take advantage of the floor area ratio (F. A. R.) of the entire 52 kathas in making constructions on lot A. In addition, the agreement recorded that the agreement had materialised by reason of the good offices and endeavour of one Sandeep Kumar Bazaz and one Jyoti Kumar Poddar (referred to as "brokers" ). The agreement provides :"in recognition of the valuable services rendered by the said Sri Sandeep Kumar Bazaz and Sri Jyoti Kumar Poddar and, in lieu of their remuneration, it has been agreed by and between the parties hereto that the purchasers shall out of the F. A. R. available in lot 'a' construct two self-contained and independent flats or apartments measuring 1,500 sq. ft. each and shall allot and transfer the same in favour of the said Sri Sandeep Kumar Bazaz and Sri Jyoti Kumar Poddar one each free of any monetary consideration within two years from the date of sanction of the plan. "
( 6 ) THE agreement also contained different clauses in the event either party did not carry out its obligations under the agreement. The petitioners have paid a sum of Rs. 1 lakh to respondent No. 6 as and by way of earnest money in terms of the agreement.
( 7 ) ON April 2, 1987, a statement of transfer of immovable property was furnished to the appropriate authority under Section 269uc of the Act read with Rule 48l of the Income-tax Rules, in Form No. 37-I. The statement records :"the total apparent consideration for the transfer of the above property is Rs. 73 lakhs (seventy-three lakhs) + 5,000 sq. ft. constructed area + 3,000 sq. ft. as brokerage (as per agreement ). "
( 8 ) AGAIN, under Clause 8 of the statement, it has been shown that what was being transferred was the ownership right to the property, tha
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