Law:

Section:

Section 269C of the Income-tax Act, 1961 - Acquisition of immovable property - Proceedings for Under section 269C before initiating the action, the competent authority has to record its satisfaction, namely, 'reasons to believe' about the fair market value of such property. Sub-section (2) of section 269C stipulates that where the fair market value exceeds the apparent consideration by more than 25 per cent, it shall be a conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer. The competent authority must have reasons to believe certain facts as mentioned in sub-section (1) of section 269. The formation of belief must be on the basis of some materials, the sufficiency of which cannot be questioned. At the same time, some material has to be there. When the task or the assignment given to the competent authority is to arrive at the fair market value as defined in clause (d) of section 269A, it becomes his bounden duty to arrive at that value on the basis of some relevant and tangible material and not on the basis of the perceptions. Respondent No. 1 herein had purchased a property at Green Park Extension, New Delhi for a consideration of Rs.16 lakhs. The competent authority passed an order acquiring the property. Held that the valuation report of the approved valuer as submitted by the respondent was not at all looked into in the 'reasons to believe' recorded by the competent authority and instead, the competent authority took into consideration the area of the land and the constructed portion thereupon, it was noted that the property was residential-cum-commercial in nature. The authority also considered the sale deed of one residential property, which was sold in September, 1985 at the rate of Rs. 4,600 per sq. mtr. In fact, the entire conclusion of the competent authority was based on the consideration given in the sale deed of the said residential property at Green Park, wherein consideration prescribed was Rs. 4,600. Taking that as the base price, the competent authority had observed that the rates of land of semi-commercial properties were almost twice as much as…

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