1 AGK AGK AGK IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.835 OF 1993 Suresh C. Shah & Others ..Petitioners. V/s. The Appropriate Authority & Others ..Respondents. Mr.K.B. Bhujale i/by Thakordas & Madgaonkar for the petitioners. Mr.R. Ashokan for the respondents. CORAM : D.K. DESHMUKH & J.P. DEVADHAR, JJ. DATED : 20TH OCTOBER, 2008. P.C. : 1. In this writ petition, order dated 29-3-1993 passed by the Appropriate Authority under Section 269UD(1) of the Income Tax Act, 1961 (‘Act’ for short) is challenged. By the said order, the Appropriate Authority had ordered the Government to purchase Flat No.4, Aryan Mahal, "C" Road, Churchgate, Bombay - 400 020 under Section 269UD(1) of the Act (‘flat in question’ in short). 2. Facts relevant for the purpose of this 2 writ petition are that, by an agreement dated 21-7-1987, the petitioner agreed to purchase the flat in question from the vendor Smt.Shobha Devi Barjatya for a sum of Rs.22,00,000/-. A statement in Form 37-I was filed before the Appropriate Authority seeking approval of the transaction dated 24-7-1987. By an order dated 23-9-1987, the Appropriate Authority ordered for purchase the flat in question under Section 269UD(1) of the Act. 3. Challenging the aforesaid order, the petitioner had filed a writ petition being Writ Petition No.3309 of 1987. The said writ petition was allowed on 20-1-1993, whereby the order dated 23-9-1987 was set aside and the Appropriate Authority under the Act was directed to pass a fresh order in accordance with law. 4. Accordingly, fresh notice was issued and thereafter by the impugned order dated 29-3-1993, the Appropriate Authority once again passed an order under Section 269UD(1) of the Act for purchase of the flat in question. Challenging the aforesaid order, the present writ petition is filed. 5. Mr.Bhujale, learned counsel appearing on 3 behalf of the petitioner submitted that the impugned order is ex-facie bad in law as the said order has been passed without determining the market value of the flat in question. He further submitted that the report of the Valuation Officer and the noting of the IAC and other material information relied upon by the Appropriate Authority were not made available, even though asked for before passing the impugned order. 6. Mr.Ashokan, learned counsel appearing on behalf of Respondent Nos.1 and 2 fairly stated that in the present case, fair market value of the flat in question has not been determined as it was not the practise followed by the Authorities at the relevant time. 7. This Court in the case of Vimal Agarwal V/s. Appropriate Authority reported in 210 ITR 16 (Bom.) which is followed in several other cases including the decision of this Court in the case of Vishwabandhu Pyarelal Gupta V.s. S.K. Laul reported in 203 ITR 157 (Bom.) has held that an order for purchase of the flat / property can be made under Section 269UD(1) of the Act only after establishing that there is significant under-valuation to the extent of 15% of the fair 4 market value with a view to evade tax. It is further held that in absence of any such determination of the fair market value of the property in question, it is impossible to hold that the apparent consideration is lower than the fair market value by 15%. 8. Admittedly, in the present case the fair market value of the flat in question has not been determined. Without determining the fair market value of the flat in question, the appropriate authority could not have arrived at a conclusion that the apparent consideration for purchase of the flat in question by the petitioner was undervalued by 15% of the fair market value. Moreover, report of the Valuation Officer and other material information called for by the Petitioner has not been furnished before passing the impugned order. In this view of the matter, the impugned order passed by the Appropriate Authority under Section 269UD(1) cannot be sustained. 9. It is pertinent to note that the matter is more than 20 years old and the matter was remanded back once. Admittedly, the petitioners are in possession of the flat in question. In fact, the petitioners had adduced some of the sale 5 instances in the vicinity of the flat in question which are comparable. Moreover, Chapter XX-C has been made inoperative from 1-7-2002. In these circumstances, in our opinion, it would not be just and proper to remand the matter once again. 10. For all the aforesaid reasons, the petition succeeds. Rule is made absolute in terms of prayer clause (a) and (b) of the writ petition. No costs. D.K. DESHMUKH, J. J.P. DEVADHAR, J.