Law:

Section:

Section 269D(1), read with section 269C(1), of the Income-tax, Act, 1961 - Acquisition of immovable properties - Preliminary notice - A company constructed a building consisting of office blocks, godowns and car parking spaces and sold certain portions to various persons on ownership basis by blocks and godowns and retained certain portions for its own use - Blocks and godowns so sold were later transferred to a co-operative society by those purchasers as per requirement of law - Sale consideration shown in sale deed was Rs. 41,71,021 - However, on basis of report of departmental valuation officer, estimating fair market value of said building at Rs. 60,70,000, competent authority issued a show-cause notice under section 269D(1) to aforesaid society - Whether competent authority having not struck words 'and/or' in aforesaid notice could not assume valid jurisdiction under section 269C - Held, yes - Whether in view of fact that consideration shown in sale deed was sum total of purchase price paid by individual purchasers and/ or vendors who retained portions of property, competent authority could not form belief that consideration agreed to between parties was more than what was stated in sale amount - Held, yes FACTS A company demolished its own building and constructed thereon a new building consisting of office blocks, godowns and car parking spaces and sold them to various persons on ownership basis. Certain portions were retained by the company for its own use or for letting out to tenants. All this happened during the period from 1967 to 1972. The blocks and godowns so sold could not in law be registered in the name of the persons who purchased them on ownership basis, the law being that the land and the structure thereon could be transferred to a cooperative society to be formed of such members who purchased blocks, godowns, flats, etc., in the building. With this end in view the individual purchasers formed a society and the building was transferred to the said society by a sale deed showing sale consideration at Rs. 41,71,020. This amount represented the total amount for which the individual purchasers including the vendors had purchased and/or retained…

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