Law:

Section:

Section 269UG of the Income-tax Act, 1961 - Purchase of immovable property by Central Government - Payment or deposit of consideration - Whether provisions of section 269UG(4) nowhere prohibit appropriate authority from paying over amount of interest on amount of consideration to proposed vendors and proposed purchasers of a property - Held, yes - Whether once Central Government has deposited amount with appropriate authority, appropriate authority either on its own motion or on an application made by or on behalf of any persons interested or claiming to be interested in such amount, is expected to invest amount of consideration in Government security or other appropriate security and ultimately when same is required to be paid over to interested parties, interest on that amount is also required to be paid - Held, yes - On petition challenging purchase order, appropriate authority submitted that it would give entire purchase amount along with interest to interested parties - On consent of interested parties, High Court passed consent order - Thereafter, appropriate authority paid principal amount to interested parties and filed review application submitting that it was not liable to pay interest - Whether since department had received several letters from vendors calling upon it to take over possession of property-in-question, department was not justified in refusing to pay interest on ground that it did not have possession of said property during pendency of petition - Held, yes FACTS The vendors executed an agreement to sell some immovable property in favour of the purchasers for Rs. 2.40 crores, which was to be paid in three instalments. The purchasers paid the first two instalments in 1996 and applied for necessary clearance of the transaction under section 269UC. The appropriate authority passed purchase order under section 269UD. On special civil application of the vendors and purchasers challenging the said purchase order, the appropriate authority filed an affidavit-in-reply to the effect that the consideration amount of the said purchase was deposited in the fixed deposit with a nationalized bank, which would be given along with bank interest according…

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