Law:

Section:

section 269C of the Income-tax Act, 1961 - Acquisition of immovable property - A property was sold to P for Rs. 19,992 in 1973 - P sold it to S for Rs. 47,000 - S sold it to M and B for Rs. 90,000 - Proceedings of acquisition were started and finalised in 1976 - Tribunal held that all parties had acted bona fide except for S - Whether in view of repeal of Chapter XX-A and the fact that apparent consideration was a petty sum of Rs. 19,992, it was a fit case for dropping of proceedings - Held, yes [case adjourned directing department to consider dropping of proceedings] Facts One R sold a property to P for Rs. 19,992 and the latter resold it to S for Rs. 47,000. Subsequently, S sold it to M and B for Rs. 90,000. Notice under section 269D was issued to R and the property was acquired under section 269F. The Tribunal observed that all the purchasers except S in this case, had acted bona fide and purchased the property for full consideration and that the effect of the impugned order of the competent authority would be to deprive them of the property which they have so acquired. Also, by way of compensation, they will be able to receive from the department only the value of the property as it was in 1973 together with a solatium and they will not be entitled to the value of the improvements that had taken place subsequently in the property. Held The Finance Act, 1986 had repealed Chapter XX-A with effect from 30-9-1986 and substituted a modified Chapter XX-C enabling the purchase by the Central Government of immovable property in certain cases of transfer. The intention of the authorities clearly was that, after 1-4-1986 proceedings earlier initiated but subsisting should be dropped unless the apparent consideration exceeds Rs. 5 lakhs. In this case, the proceedings were initiated by the competent authority and finalised by him in 1976. But this was subject to order in appeal and, as a result of the order of the Tribunal and the appeal to this Court, the position was that those proceedings were pending as on date. In this case, the apparent consideration was only the petty sum of Rs. 19,992, and it would seem, in view of the declaration by the CBDT and in view also…

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