Law:

Section:

Section 269C of Income-tax Act, 1961 – Acquisition of immovable property – Proceedings for – Respondents sold a plot of land measuring 4550 sq. yds. at a price of Rs. 65 per sq. yd. – Competent Authority came to conclusion that its value would be taken as if it were a developed plot, and, after taking market value of entire plot at Rs. 150 per sq. yd. and after deducting therefrom value of 801 sq. yds. of area surrendered to municipality for road construction, cost of removing and accommodating encroachers and cost of filing up, found that provisions of section 269C were satisfied – He passed orders for acquisition of said plot – Tribunal found that fair market value of developed plot in that location would be Rs. 140 per sq. yard and that by adding further expenses on brokerage, solicitors' fees and stamp duty etc. to outgoings permitted by competent authority, margin between apparent consideration paid under document and fair market value so determined was a little less than 15 per cent – It accordingly set aside order of acquisition – Whether incidental expenses like stamp duty, brokerage and legal expenses might form part of mental process of buyer for purposes of making an offer, but said expenses did not form part of price and could not be deducted therefrom – Held, yes – Whether since Tribunal had not recorded clear findings as to permissible expenditure under three agreed heads of value for encroachment, cost of road construction and cost of filling up, matter was to be remanded to Tribunal for further hearing and disposal according to law – Held, yes [Matter remanded] FACTS The respondents sold a plot measuring 4550 sq. yds, to one ‘P' at the rate of Rs. 65 per sq. yd. and the conveyance was registered. The competent authority after obtaining valuation report from the department's valuer found that the apparent consideration was very much less than the fair market value value by more than 15 per cent. After hearing the parties and considering the evidence on record, the competent authority found that even after allowing deductions of amounts for road construction, value of encroachment and value of filing up, and taking into account the market value of…

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