THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 16.05.2012
+ W.P.(C) 692/1994
GIAN DEVI ... Petitioner
versus
UOI & ORS ... Respondents
Advocates who appeared in this case:
For the Petitioner : Mr Luv Kumar Aggarwal
For the Respondent : Mr Ajay Vohra, Mr Amit Sachdeva for R- 4 to 6.
Mr B.B. Gupta for LRs of R-7
Ms Suruchi Aggarwal
AND
+ W.P.(C) 1427/1994
HARI RAM SAINI ... Petitioner
versus
UOI & ORS ... Respondents
Advocates who appeared in this case:
For the Petitioner : Mr Ajay Vohra, Mr Amit Sachdeva for Petitioner
Nos. 2 to 5
: Mr B.B. Gupta for LRs of P-1
For the Respondent : Ms Suruchi Aggarwal
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE V.K. JAIN
WP (C) Nos. 692/94&1427/94 Page 1 of 6
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
1. These writ petitions raise common and identical issues and therefore they are being disposed of together.
2. The challenge in these writ petitions is to the order dated 25.01.1994 under section 269UD (1) of the Income Tax Act, 1961 (hereinafter referred to as the 'said Act'). By virtue of the impugned order the appropriate authority had come to the conclusion that the apparent consideration of the property in question was under stated by 27%, as compared to the property at E-23 East of Kailash, New Delhi, and by 33%, when compared to the property at E-124, East of Kailash, New Delhi. Consequently, the order for pre-emptive purchase of the property in question under section 269UD (1) of the said Act was passed.
3. The property in question is E-41, East of Kailash, New Delhi. It is a residential property and measures 450 Sq. Yrds. or 376.25 Sq. Mtr. There is a built up structure of approximately 2000 Sq.Ft. on that property.
4. The learned counsel for the petitioner pointed out that the only reason for the respondent to arrive at the conclusion that the property in question had been sold at an undervalued apparent consideration was on the WP (C) Nos. 692/94&1427/94 Page 2 of 6 basis of two purported comparable sale instances in respect of the said properties at E-23, East of Kailash, New Delhi, and E-124 at East of Kailash, New Delhi.
5. Several points were urged by the learned counsel appearing on behalf of the petitioner. First of all, they stated that the so-called comparable instances were not comparable at all. Secondly, it was contended that once the DDA had fixed the market value of the land while computing the unearned increase, that value was binding and if that value was to be taken, there was no question of the difference in the apparent consideration being less than the fair market value by more than 15%. In fact, according to the learned counsel for the petitioners, the fair market value arrived at on the basis of the DDA computation would be even less than the apparent consideration. Thirdly, it was contended that the respondent had ignored the sale instance of another property just across the road being E-227, East of Kailash, New Delhi, which had been sold for a consideration of `. 16 lakh on 29.08.1986. The size of the property was 500 Sq. Yrds. Fourthly, it was contended on behalf of the petitioner that the methodology adopted for computing the market value of the comparable property was also wrong.
6. However, the learned counsel for the petitioners pointed out that WP (C) Nos. 692/94&1427/94 Page 3 of 6 even if all the contentions are kept aside and the sale instance in respect of E-23, East of Kailash, New Delhi, itself is taken into account, the difference between the apparent consideration and the said sale instance value would be less than 15% and therefore the pre-emptive purchase could not have been ordered.
7. We have heard the learned counsel for the Revenue also on the aforesaid aspects. However, we feel that the last point urged by the petitioner clinches the issue in their favour. It is an admitted position that the property in question had been agreed to be sold for a consideration of `. 21 Lakh plus the amount of unearned increase to be charged by the DDA for the said transfer. The sale agreement was entered into on 21.05.1987. There is no dispute that after the unearned increase amount is taken into account, as indicated by the DDA, the value of the apparent consideration of the property in question comes to `. 29,54,800/-. The consideration for the property at E-23, East of Kailash, New Delhi, which was sold by virtue of a sale deed on 03.09.1987, was `. 33,80,000/-. Without going into any adjustments with regard to the difference in points of time on which the said two transactions were finalized, the difference between the two values i.e, `. 33,80,000 and `. 29,54,800/- comes to about 14.42 % which is clearly WP (C) Nos. 692/94&1427/94 Page 4 of 6 less than the figure of 15% which is necessary for triggering any pre- emptive purchase under section 269UD (1) of the said Act. We may point out at this juncture that the area of E-23, East of Kailash, New Delhi, was 376 Sq. Mtr. whereas the area of the property in question was 376.25 Sq. Mtr. The constructed area was also virtually almost the same in both the cases. The two properties, in these respects, were comparable.
8. There is, however, only one difference in the two properties and that is that a small portion of E-23, East of Kailash, New Delhi, was tenanted when it was sold. Whereas the property in question was fully vacant and was in the possession of the owner/vendor. However, there is no material placed before us to indicate as to whether the fact that a small portion of the property at E-23, East of Kailash, New Delhi, was tenanted would result in any alteration in the valuation indicated in the sale deed itself. Therefore, there is no necessity for us to examine what would have been the fair market value of E-23, East of Kailash, New Delhi, had it been wholly vacant. Once, the respondents have accepted the sale consideration in respect of E-23, East of Kailash, New Delhi, as being comparable to the sale in respect of the property in question, all that we have to see is the consideration in the two instances. We have already indicated above that, WP (C) Nos. 692/94&1427/94 Page 5 of 6 comparing the two values, the difference is less than 15%.
9. Insofar as the second instance of E-124, East of Kailash, New Delhi, is concerned, that, clearly is not comparable to the property in question. The size of E-124, East of Kailash, New Delhi, is only 104.52 Sq. Mtr. whereas the size of the property in question is 376 Sq. Mtr. Therefore, that cannot be regarded as comparable instance. It is also well known that smaller plots tend to fetch much higher prices per Sq. Mtr. than the larger plot.
10. In view of the foregoing, since the difference in the consideration of the comparable property and the apparent consideration of the property in question is less than 15%, the order under section 269 UD (1) of the said Act for pre-emptive purchase of the property in question could not have been passed. As a result, the impugned order is set aside. The writ petitions are allowed. There shall be no orders as to costs.
BADAR DURREZ AHMED, J V.K. JAIN, J MAY 16, 2012 kb WP (C) Nos. 692/94&1427/94 Page 6 of 6