Law:

Section:

Section 269C of the Income-tax Act, 1961 - Acquisition of immovable property - Initiation of proceedings for - Vendor agreed to sell to respondent property in question which comprised lease-hold plot measuring 3824 sq. yds. and structures thereon - Property was valued at Rs. 1 crore inclusive of amount of unearned increase payable to Land and Development Officer -Sale of property in question was registered - Statements in Form No. 37EE were made before competent authority - Competent authority valued property in question at 2.02crores, taking into consideration value of small freehold plots in two separate developed colonies and initiated proceedings under section 269C - Competent authority did not take into consideration facts (i) that if super-structure was razed to ground, open land would attract provisions of Urban Land Ceiling Act, (ii) that an important factor affecting property in question was low FAR permissible in area, (iii) that two instances of comparable transactions in that area showed much lower value of land than that assumed by competent authority for present transaction, and (iv) that L & DO had determined rate of land which was taken by respondent for valuation of property - Whether competent authority having ignored these factors, had no basis for initiation of proceedings under section 269C and same were liable to be quashed - Held, yes FACTS The property in question comprising leasehold land measuring 3824 sq. yds. with build-up structures was agreed to be sold by the vendor in favour of the respondent. The sale price of Rs. 1 crore included the amount of unearned increase payable to the L & DO by the respondent on behalf of the vendor. The sale deed was registered. Statements in Form No. 37EE were filed with the competent authority as required under section 269C. After the registration, the competent authority issued notices under section 269C(1) for the acquisition of the property in question. The competent authority valued the property in question at Rs. 2.02 crores. Reliance was placed by it on two sale instances of constructed plots measuring 800 sq. yds. and 500 sq. yds, in two other localities, while instances of comparable…

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