Law:

Section:

Section 269UC of the Income-tax Act, 1961 - Purchase of immovable property by Central Government - Restriction on transfer of property The petitioner had acquired a right of ownership in respect of the suit premises which was sought to be sold by the Income-tax Department. The petitioner-company had acquired freehold rights in respect of the suit premises pursuant to a consent decree. At the time of purchase, a company by name SPL held leasehold rights and they had sub-let the suit premises in favour of another company by name of "SIL". The consent decree provided that the sale was subject to the indenture of sub-lease and also subject to another agreement entered into between SPL and the sub-lessee SIL inter alia,for construction of foyer for the said SIL. After the petitioner obtained ownership rights by an indenture of modification dated 19-2-1986 executed between the petitioner and the aforesaid sub-lessee SIL, the rights of SIL were modified and their right of 9 renewals with effect from 30-4-1982 was changed and reduced to only 1 renewal for a period of 10 years. In view of the indenture of modification, the indenture of sub-lease dated 30-4-1982, came to an end by efflux of time on 30-4-1992. The said sub-lessee, i.e., SIL Limited, however, continued in illegal and unlawful possession and paid monthly compensation till 30-6-1997. Without the knowledge and consent of the petitioner, the shareholders of SIL agreed to sell their shareholding to a company called FWE for a sum of Rs. 4 crores and by their letter dated 31-3-1997, they notified the income-tax authorities by filing Form No. 37-I, as required under Chapter XX-C of the Income-tax Act. The income-tax authorities decided to exercise their right of pre-emptive acquisition of the shares of SIL and, accordingly, by an order dated 27-7-1997, passed under section 269UD, the Central Government exercised the option to purchase the shareholding of SIL from the shareholders SIP for the consideration of Rs. 4 crores. Consequent to the aforesaid order dated 27-6-1997, on 7-7-1997, the shareholders of SIL handed over the physical possession of the suit premises to the Income-tax Department and obtained a…

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