The court emphasized the wide powers conferred under Section 269ud and the conditions precedent to assume jurisdiction, highlighting the rebuttable presumption of under valuation and the requirement of giving an opportunity of being heard to the parties concerned.

( 1 ) AN order, dated 30 November 1996, passed by the Appropriate Authority under Section 269ud (1) of the income-tax Act, 1961 (in short the Act), directing pre-emptive purchase of a residential house bearing no. 22/78 Punjabi Bagh, New\delhi is under challenge in this writ petition.

( 2 ) MATERIAL facts, leading to the filing of this petition are as follows: on 12 August 1996, the petitioner entered into an agreement with respondents No. 2 to 4, for purchase of the aforementioned 1 1/2 storeyed property, built on a plot admeasuring 2255. 55 sq. yds for a consideration of Rs. 2. 76 crores. As per the agreement, the vendors, respondents No. 2 to 4 herein, were paid a sum of Rs. 30 lacs by way of earnest money; a further sum of Rs. 51 lacs was to be paid within fifteen days from the date of grant of no objection certificate by the Appropriate Authority, and within ninety days of the receipt of all necessary and requisite permissions, no objections and clearances, the balance sale consideration of Rs. 1. 95 crores was to be paid and simultaneously peaceful vacant physical possession of the property was to be delivered to the vendee. On the same day, the petitioner and respondents No. 2 to. 4 filed a statement in Form 37-1 along with the agreement to sell, seeking no objection certificate from the Appropriate Authority. On 8 November 1996, the Appropriate authority issued a notice under Section 269ud (1a) of the Act to the petitioner and respondents 2 to 4, stating that the apparent consideration of Rs. 2. 76 crores in respect of th. e subject property is considered low when compared with property No. 20, Road No. 75, punjabi Bagh, New Delhi, hereinafter REFERRED TO to as the sale instance. Relevant portion of the notice reads as under:

"the apparent consideration so declared appears to be low when compared with the sale instance of property No. 20, Road No. 75, punjabi Bagh, New Delhi (Case No. R~5086) with date of agreement to sell of 22-7-1996, where the parties had declared apparent consideration at Rs. 2,51,00,000/- giving a unit land rate of Rs. 25048/- per sq. mtr. After making certain adjustments as under:- 1. Time gap ( +) 2% 2. FAR (-_) 7% 3. Size of plot - sub. having large size than instance (-) 10% 4. Location - instance having nuisance due to school (+) 5% total: (-) 20% the adjusted unit land rate would come to rs. 20,038/- per sq. mtr. and based on that the land value of the property in question would come to Rs. 3,77,89,864/- and after adding to this amount, the depreciated cost of structure at Rs. 8,21,136/- the total FMV comes to Rs. 3,86,11,000/ -. Thus, there would come a difference between the declared apparent consideration and the fair market value so determined at 40%". Thus, noticing the difference of 40% in the declared apparent consideration and the fair market value so determined, by means of the said notice, the parties were required to show cause as to why an order for pre-emptive purchase under Section 269ud (1 ) of the act should not be made. In response thereto, the petitioner and the said respondents submitted written submissions, objecting to the proposed action. The main objections were:

(I) the construction cost taken in the case of the sale instance was not taken correctly inasmuch this being a newly constructed property with latest amenities, its construction cost was not less than rs. 1000/- per sq. ft. as against approximately Rs. 216/- per sq. ft adopted by the Appropriate Authority;

(II)THE cost of structure of the subject property should have been taken as nil as against Rs. 8,21 ,136/- because a new construction had to be raised after demolishing the building;

(III) proper adjustments on account of various disadvantages in the subject property should have been made in calculating its fair market value;

(IV) the sale instance relied upon by the Appropriate authority was not comparable with the subject property and, further, it had certain advantages for the vendee, being situated