Kishore K. Shahani and ors. Vs. Appropriate Authority, Income Tax Department and ors. - Court Judgment

Excerpt:
direct taxation - order for purchase - section 269ud (1) of income tax act, 1961 - petitioner agreed to purchase a flat at fair market value - respondent no. 1 passed order under section 269ud (1) whereby flat was ordered to be purchased by central government - petition challenging such order - on basis of precedent court said that income-tax department to take genuine efforts to find proper material or proper sale instances which are comparable time wise and location-wise with sale transaction of property under sale agreement before proposing its pre-emptive purchase so that bona fide purchasers are not harassed and transaction not hampered - ignoring sale transaction relied upon by petitioner is fatal to case of respondent and would vitiate order - impugned order quashed. - code of criminal procedure, 1973 [c.a. no. 2/1974]. section 41: [ swatanter kumar, cj, smt ranjana desai & d.b. bhosale, jj] arrest of accused - held, a police officer or a person empowered to arrest may arrest a person without intervention of the court subject to the limitations specified under the provisions of the code. the provisions of section 41 of the code provides for arrest by a police officer without an order from a magistrate and without a warrant. a distinct and different power under section 44 of the code empowers the magistrate to arrest or order any person to arrest the offender. under section 44 of the code, that power is vested in the court of the magistrate when an offence is committed in his presence. if the legislature has taken care of providing such specific power under section 44 of the code, then there could be no reason for such a power not to be specified under the provisions of chapter xii of the code. in terms of section 41, a police officer may arrest a person without a warrant or order from the magistrate for any or all of the conditions specified in that provision. language of this provision clearly suggested that the police officer can arrest a person without an order from the magistrate. thus, there appears to be no reason why on the strength of section 156(3) of the code, any restriction should be read into the power specifically granted by the legislature to the police officer. of course, freedom of investigation is the essence of these provisions but in order to suppress the mischief it is sufficiently indicated under different provisions of the code that the arresting officer should exercise his power or discretion judiciously and should be free of motive. some kind of inbuilt safeguard is available to the accused in the cases where the magistrate directs investigation under section 156 (3) of the code by taking recourse to the provisions of section 438 of the code by approaching the court of session or the high court for such relief. thus, during the course of investigation of a criminal case, an accused is not remediless and that would further buttress the above view. [jagannath singh v dr. ajay upadyay & anr 2006 cri lj 4274; 2006 (5) air bom r held per incuriam]. - it failed to mention the fair market value and the basis for the computation was also not indicated and no material was furnished to the petitioners despite the judgment of the supreme court in the case of c. and for the purpose of comparison with well maintained flats, the rate of the present flat is taken at rs. 1.80 crores in respect of the present flat would be fair market value of the property on the ground that the earlier transaction was entered into on 9th february, 1992 and the no objection was to the agreement dated 29th april, 1992 and thereafter there has been a steep rise in the market prices in malabar hill as well as other posh localities of bombay town. the relevant portion of the reasoning in the impugned order is as under :in our judgment the following sale instances would give a fairly reliable insight into the probable market price of the flat in question on the material date: gautam's case (supra) and consequently they were satisfied that this is a fit case for exercising the powers under section 269-ud(1) and chapter xxi of the income tax act and proceeded to pass the impugned order. secondly it, failed to consider the sale instances of some of the flats and rate per sq. also, recourse to compulsory purchase of the immovable property in question under chapter xxc of the act should be taken only in clear cases of gross under valuation from which the inference must clearly flow that it is done for evasion of taxes. from 1 to 1.25. the transaction in the sale instance in which the buyer has paid higher value for the land purchased by him, because of the above advantage to him cannot therefore, furnish a good guide for determining the market value of the suit land. in the event of the purchasers fail and or neglect to pay the vendor the said balance sum of rs.j.n. patel, j.1. the petitioners have filed this petition challenging the validity and legality of the order dated 30th november, 1992, passed by the respondent no. 1 under sub-section (1) of section 269ud of the income tax act, 1961 whereby flat no. 131, ashoka apartment, 13th floor, along with garage no. 12, 69 napean sea road, bombay - 400 006 was ordered to be purchased by the central government.2. according to the petitioners the said flat was agreed to be purchased by the petitioners from the respondent no. 3 at a fair market value; the order passed by respondent no. 1 - appropriate authority is in violation of the principles of natural justice i.e. by not giving reasonable opportunity of being heard and by not disclosing the material relied upon by them and referred to in the impugned order despite being called upon and on numerous other grounds. therefore, the same is liable to be quashed and set aside.3. the facts in the case can be summed up as under:---on 9th september, 1992 the petitioners entered into an agreement for (of) sale for purchasing flat no. 131 admeasuring 2830 sq. ft. situated in ashoka apartment, 13th floor along with garage no. 16, 68, napean sea road, bombay - 400 006 with respondent no. 3 suchindra bali. the price agreed upon was rs. 1,80,00,000/-. out of this amount, the petitioners paid an earnest money deposit of rs. 18,75,000/- and it was agreed that the balance of rs. 1,61,25,000/- was payable within one month of the issuance of n.o.c. by the appropriate authority. on 15th september, 1992 as required form 37i was filed. thereafter on 20th november, 1992 the appropriated authority issued a letter calling upon the petitioners to show cause as to why an order should not be made in accordance with the provisions of section 269-ud(1) of the income tax act, to which the petitioners filed their written submission before the appropriate authority on 29th november, 1992 and after hearing the parties on 30th november, 1992 the appropriate authority passed the impugned order. on 10th december, 1992 the petitioners-purchasers filed this petition challenging the impugned order.4. it is the contention of the petitioners that during the period from december, 1991, to january, 1992 they were negotiating for another flat i.e. flat no. 121 of the same carpet area in the same building namely ashoka apartments and the price had been negotiated at rs. 1.40 crores, but the transaction could not be carried to fruition and the vendors of the said flat no. 121 entered into an agreement for sale of the said flat at a price of rs. 1.40 crores on 9th february, 1992. on 9th april, 1992 the appropriate authority granted its no objection certificate and cleared form 37i lodged in respect of the sale of flat no. 121 at a price of rs. 1.40 crores. it is submitted on behalf of the petitioners that during the period between september, 1991 and may, 1992 the appropriate authority cleared several other transactions of flats in the same building, ashoka apartments at the rates ranging between rs. 4039/- to rs. 5253/- per sq. ft. sometime in june-july, 1992 the petitioners learnt that flat no. 131 in the same building 'ashoka apartment' was available for sale. originally the flat belonged to dr. c.l. bali. upon his death on 1st april, 1986 there were certain disputes between his wife from an earlier marriage and his wife from subsequent marriage, smt. vyjantimala bali. on 26th july, 1989, probate had been granted by the madras high court to smt. vyjantimala in tos. no. 19 of 1987 and as such the negotiations for the sale of flat took place with smt. vyjantimala, the mother of the respondent no. 3 pursuant to which the agreement to sell the flat came to be executed on 9th september, 1992.5. dr. chandrachud, the learned counsel appearing on behalf of the petitioners submitted that the show cause notice issued by the appropriate authority did not contain any reference to there being a significant under-valuation of the property to the extent of 15% or more of the fair market value. it failed to mention the fair market value and the basis for the computation was also not indicated and no material was furnished to the petitioners despite the judgment of the supreme court in the case of c.b. gautam. it is further contended that though the purchase price under the agreement was rs. 1.80 crores the transfer charges of rs. 2,19,000/- had to be paid to the society. in addition, the flat was in an extremely shabby condition and required extensive repairs and the vendor was also indebted to the society and considering all these facts the area of the flat being 2832 sq. ft. the rate per sq. ft. worked out to rs. 6,433/-. so it cannot be said that the flat in question was undervalued. dr. chandrachud also pointed out that the appropriate authority had cleared the sale of similar flat no. 121 in the same building 'ashoka apartment' on 29th april, 1992 under chapter xx-c of the income tax act, 1961 for a consideration of rs. 1.40 crores and the agreement entered into by the petitioners in respect of flat no. 131 in 'ashoka apartment' was on 9th september, 1992 i.e. after a gap of just 3-4 months with an enhancement of rs. 40.00 lakhs in the consideration which was adequate particularly because the flat required extensive repairs and taking into consideration that both the flats are identical in all respect the appropriate authority ought to have cleared the sale of this flat no. 131 also. it was also contended on behalf of the petitioners that the petitioners have in their reply to the show cause notice given the instances of sale transactions cleared by the appropriate authority including those in the very same building between september, 1991 and may, 1992. even in may, 1992 an agreement for sale of flat no. 86 in the same building at rs. 5253/- per sq. ft. took place. so there was no justification in passing the impugned order in case of transaction entered into by the petitioners. dr. chandrachud assailed the reasoning given by the appropriate authority in the impugned order, that by reason of having given no objections certificate on an earlier occasion they are not precluded to pass a purchase order. the purchase order is not justified on facts and that the case of the respondent-appropriate authority that there was a steep price rise after may, 1992 is without any basis. it is contended by dr. chandrachud that the appropriate authority has relied upon other sale instances in the order, though none of these instances have been furnished to the petitioners at any earlier stage and that the appropriate authority cannot rely upon the sale instances on the basis of which they have passed the impugned order on the ground that these are of far superior buildings and not comparable. dr. chandrachud also contended that the appropriate authority has mainly held that the apparent consideration was very low as compared to the fair market value of the flat without any computation of the fair market value and there has been no determination of the fair market value by the appropriate authority. for this he strongly relied upon the case of (1) c.b. gautam v. union of india & others, reported in : [1993]199itr530(sc) . (2) sarwarben temas khambata & others v. appropriate authority, reported in (1995) (3) itr 216 vimal agarwal v. appropriate authority & others : [1994]210itr16(bom) , (4) mrs. nirmal laxminarayan grover v. appropriate authority, ahmedabad & others (1995) tax lr 355 and (5) vijay kumar sharma v. appropriate authority & another 1995 tax lr 720.6. mr. sethna, learned counsel for the respondents no. 1 and 2 submitted that this writ petition has been filed by the petitioners mainly on the ground that the respondents did not comply with the principles of natural justice while passing the impugned order and that it was the grievance of the petitioners that the appropriate authority did not supply the sale instances relied upon by them before passing the impugned order even though the personal hearing was given to the petitioners. according to mr. sethna at the relevant time when the impugned order came to be passed ie. prior to the judgment of the supreme court in the case c.b. gautam v. union of india & others, reported in : [1993]199itr530(sc) it was not a requirement under the statute to give personal hearing to the parties when an order under section 269-ud(1) passed. the appropriate authority only required to record the reasoning in support of his order and it is only after the decision in c.b. gautam's case (supra) that the principles of natural justice and opportunity of being heard came to be introduced. mr. sethna submitted that in the present case though the respondents were not having the copy of the judgment in c.b. gautam's case, but they had followed the mandate of the said order by giving opportunity of hearing to the parties. it is contended by mr. sethna that the impugned order and the reasons recorded by the appropriate authority, the appropriate authority has discussed at length the various sale instances relied upon by them and at the relevant time it was not necessary and incumbent upon the respondents to supply all materials relied upon by them. what was contemplated was only a (requirement of a personal hearing to show cause for the parties and as such non-supply of material in support of the show cause notice would not vitiate the compliance of the principles of natural justice and he has relied upon the judgments in the case of m/s. fedco pvt. ltd. v. s.n. bilgrami : [1960]2scr408 and mrs. vimaladevi g. maheshwari v. s.k. laul & others. it is submitted by mr. sethna that in view of the fact that the sale instances relied upon by the appropriate authority were not supplied to the petitioners is considered to be in violation of the principles of natural justice, this court is still competent to remand the matter back to appropriate authority for a de-novo trial on a time bound schedule as was done in the case of home builders v appropriate authority and about 45 others such matters where the impugned orders were passed prior to c.b. gautam's case (supra) and such remand of the matter will serve the purpose of the present petition and give the parties a chance to vindicate their grievance.7. it is contended by mr. sethna that the subject property was declared only at the rate of rs. 5,560/- per sq. ft. after including rs. 200/- per sq. ft. for renovation which was very low comparing to the market rate as demonstrated by the sale instances referred to in the reasons while passing the impugned order. mr. sethna pointed out from the two schedules relied upon by the appropriate authority and submitted that from a perusal of the sale instances from napean sea road where the subject property is located during the period from april, 1992 to september, 1992, the fair market value of such properties was in the range of rs. 7,186/- per sq. ft. to rs. 11,773/- per sq. ft. of built up area. the sale instances relied upon by the appropriate authority also amply demonstrate the steep upward trend of the market value of the properties in the said locality which goes to demonstrate a high price rise in the real estate market and in the circumstances the power under section 269-ud(1) of the act came to be validly exercised by the respondents-appropriate authority. the difference between the fair market value and the declared value of the subject property is more than 15%.8. mr. sethna further contended that the appropriate authority has considered the submissions of the petitioners in respect of granting n.o.c. to a flat in the same building for an apparent consideration of rs. 1.40 crores. mr. sethna submitted that in that case the sale agreement was dated 9th february, 1992 whereas the sale agreement in the instant case was dated 9th september, 1992 i.e. almost after 7 months and it is during this period i.e. between february and september, 1992 there was a steep rise in prices of properties in south bombay which is reflected in the sale instances discussed in the order and can also be seen from the instances relied upon by the petitioners themselves in their written submissions dated 26th november, 1992 that the rates per. sq. ft. in the same building ashoka apartments were around rs. 4,039/- per sq. ft. in september, 1991 and it went upto rs. 5,263/- per sq. ft. till may, 1992 and as such it cannot be said that the impugned order suffers from any non-application of mind.9. mr. sethna, the learned counsel for the respondents 1 and 2 submitted that the provisions of chapter xxc of the income tax act are enacted with the laudable objective of curbing under-hand dealing in the real estates transactions and the writ court exercising jurisdiction under article 226 of the constitution is not sitting in appeal against the orders of the appropriate authority as can be seen from the case of vimaladevi g. maheshwari (supra) and m/s. lok housing & construction co. ltd. v. appropriate authority and others. mr. sethna submitted that the impugned order is not challenged by the vendors and he further submitted that as the impugned order does not suffer from any illegality it is submitted that the writ petition be dismissed with costs.10. mr. seervai, the learned counsel appearing for the vendor-respondent no. 3, has strongly objected to the contention of the learned counsel shri sethna on behalf of the respondent nos. 1 and 2 that in case the court comes to a finding that the respondents nos. 1 and 2 did not comply with the principles of natural justice while passing the impugned order, the matter can be remanded for de-novo hearing on a time bound schedule. mr. seervai submitted that there is no provision under the income tax act by which the matter can be remanded to the appropriate authority for de-novo hearing.11. we have heard the parties at length and we have taken into consideration the judgments cited at the bar.12. let us first examine whether this is a case of significant under valuation as contended. on this aspect the reasons recorded in the impugned order in paragraphs 9 to 14 are required to be considered. the appropriate authority has accepted the contention of the petitioners that the flat in question having remained unoccupied for a long period, is in shabby condition and needs renovation and they observed that the flat in question can be nicely renovated by a further expenditure of about rs. 200/- per sq. ft. and for the purpose of comparison with well maintained flats, the rate of the present flat is taken at rs. 5,560/- (rs. 5,358/- per sq. ft. plus rs. 200/- per sq. ft.) but has in terms refused to accept the contention of the petitioners that because a flat in the same building situate on the 13th floor was granted no objection certificate for an apparent consideration of rs. 1.40 crores, the consideration of rs. 1.80 crores in respect of the present flat would be fair market value of the property on the ground that the earlier transaction was entered into on 9th february, 1992 and the no objection was to the agreement dated 29th april, 1992 and thereafter there has been a steep rise in the market prices in malabar hill as well as other posh localities of bombay town. the appropriate authority proceeded to examine and assess the same by relying on sale instances. the relevant portion of the reasoning in the impugned order is as under :---'in our judgment the following sale instances would give a fairly reliable insight into the probable market price of the flat in question on the material date:--------------------------------------------------------------------------------sr. case date of description of area rate remarks.no. no. agreement the property sq. ft. per rs.-----------------------------------------------------------------------------1. 9222 23-04-92 flat no. 3-a 2380 7196 full3rd floor sea viewbrighton68d, napeansearoad.2. 9241 27-04-92 flat no. 302 1209 7596 no seaview3rd floormanju apts.,narayandabholkar rd.3. 9889 29-07-92 flat no. 4 1580 7731 very partialdariya mahal sea viewno. 380 napeansearoad.4. 9990 10-08-92 flat no. 142a, 2840 11773 partialb & c, sea viewlaxmi nivas14th floor87 napeansearoad5. 10242 27-09-92 flat no. 801 1012 8648 full8th floor sea viewchandanbala4, ratilalthakkar margoff napeansearoad.-----------------------------------------------------------------------------the above sale instances are in respect of flats in buildings situated at napeansea road area. the appropriate authority also took into consideration the following comparable sale instances of flats in buildings situated at malabar hill area.---------------------------------------------------------------------------sr. case date of description of area rate remarks.no. no. agreement the property sq. ft. per rs.---------------------------------------------------------------------------1. 9081 30-03-92 f-4a 4th fl., 2625 9422 full manek, l.d. sea view ruparel marg bombay.2. 9105 24-04-92 f-5, gitanjali 1780 7156 full sea 5th floor view 75/77, walkeshwar3. 9819 29-07-92 f-0101, miami 2080 8546 full sea 10th floor view 70-a, bhulabhai desai road4. 9986 20-08-92 flat no. 12-a 1071 7403 full ajanta apts., sea view 7th floor 124-126 walkeshwar rd.5. 9540 09-06-92 flat no. 141 3435 9655 partial 14th floor sea view neelamber 37 peddar rd.6. 9332 30-04-92 flat no. 5 3015 11385 full 5th floor sea view cliff b.g. kher marg---------------------------------------------------------------------------thus after taking into consideration the aforesaid sale instances, the appropriate authority came to the conclusion that the price of rs. 5,560/- (after including rs. 200/- per sq. ft. for renovation) of built up area for the said flat is obviously low and came to a finding that they are of the considered opinion that the disclosed apparent consideration is very low as compared to the fair market value of the flat in question on the material date and in any case is far in excess of 15% margin contemplated by the hon'ble supreme court in c.b. gautam's case (supra) and consequently they were satisfied that this is a fit case for exercising the powers under section 269-ud(1) and chapter xxi of the income tax act and proceeded to pass the impugned order.13. it is contended by dr. chandrachud that the sale instances mentioned in the above two tables which was the basis for arriving at the conclusion that the consideration of the said flat is very low as compared to the fair market value of the flat in question, was not annexed to the show cause notice given to the petitioners by the appropriate authority. secondly it, failed to consider the sale instances of some of the flats and rate per sq. ft. for which the appropriate authority found to be fair market value the list of which is furnished to the appropriate authority by the petitioners along with their letter dated 26th november, 1992. the said list is reproduced here under :-------------------------------------------------------------------------name of building area value rate prior toand brief address sq. ft. sq. ft. nov. 1992----------------------------------------------------------------------1. ashoka, apartments 2830 crores 5071 199268, napeansea road 12th floorflat no. 1211.42 marchmr. makjarboa2. flat no. 86, 1045 lakhs 5263 199255 mayashoka apartments68, napeansea roadbombay3. shivtirth 63 august 1400 lakhs 4500 1992warden roadbombay4. lands end 95 october 1600 lakhs 5937 1992napeansen roadbombay(fully furnished)5. sky scrapler 63 sept., 1400 lakhs 4500 1992warden roadbombay6. vasant mahal 42 october 1115 lakhs 3766 1991c-road, churchgatebombaycertificate no. 7819dated 28-10-91 ofappropriate authority7. sadhana 49.50 1200 lakhs 4125 1991dec., b-road, churchgatebombaycertificate no. 8303dated 5-12-81 ofappropriate authority8. ashoka apartment 55.75 1380 lakhs 4039 1991sept.,68 napeansea roadflat no. 339. ashoka apartment 52.00 1045 lakhs 4976 1991nov., 68 napeansea roadflat no. 101----------------------------------------------------------------------14. there is not a whisper of these sale instances in the reasons recorded by the appropriate authority while passing the impugned order, which goes to show that the appropriate authority has not taken into consideration the list of the properties furnished by the petitioners which was very much relevant as it consists of sale transactions of at least 4 flats in the same building 'ashoka apartment' during the period september, 1991, november, 1991, march, 1992 and may, 1992 and those are mentioned in the list reproduced hereinabove at serial nos. 8, 9 and 1, 2. these instances reflect that apparent consideration was the fair market value of the subject property. non-consideration of these sale instances by the appropriate authority only shows non-application of mind.15. the respondents have not denied the correctness of this list submitted by the petitioners. if we compare these two tables relied upon by the respondents-appropriate authority with the list furnished by the petitioners, we find that the value of flats in ashoka apartments where the flat in question is situated did not exceed the rate of rs. 5,263/- per sq. ft. in may, 1992 and the four instances given in the list would show that in september, 1991 flat no. 33 was agreed to be sold at the rate of rs. 4,039/- per sq. ft. in november, 1991 flat no. 101 it was agreed to be sold at the rate of rs. 4,076/- per sq. ft. in march, 1992, flat no. 68 was agreed to be sold at the rate of rs. 5,071/- per sq. ft. and in may, 1992 flat no. 96 was agreed to be sold at rs. 5,263/- per sq. ft., whereas the sale instances relied upon by respondent as shown in the two tables commanded price in the range of rs. 7,186/- per sq. ft., to rs. 11,773/- per sq. ft. built up area. the two sale instances in table-i are of april, 1992 and commanded rate of rs. 7,196/- per sq. ft. and rs. 7,596/- per sq. ft. of built up area. in table ii, 1st two sale instances are of march, 1992 and april, 1992 and were sold at the rate of rs. 9,422/- per sq. ft. and rs. 7,156/- per sq. ft. of built up area and the 6th sale instance which is of april, 1002 the rate was rs. 11,385/- per sq. ft. of built up area.16. though the sale instances relied upon the appropriate authority given in the two tables are all properties situate in and around the same area, but the very fact that the fair market value of these properties being substantially diverse from the fair market value of the flats situated in ashoka apartments, itself goes to show that the appropriate authority for the purposes of assessment of the fair market value has taken for the purpose of comparison properties which commanded substantially more value even during the period under consideration. the very fact that the respondents 1 and 2 ignored the petitioners list of sale instances which also included sale transactions in ashoka apartments, would show that the respondents-appropriate authority have adopted the principle of 'pick and choose' in order to render the transaction in question as significantly undervalued.17. it is in this background that the contention of the petitioners that they were not given reasonable opportunity of showing cause/hearing as contemplated in c.b. gautam's case (supra) assumes importance as no opportunity was given to the petitioners to meet the case of the respondents as regards the sale instances relied upon by the respondents for the purposes of arriving at a conclusion that the apparent consideration is significantly undervalued, otherwise the petitioners could have pointed out how the sale instance relied upon by the appropriate authority could not form basis for comparison. secondly, by ignoring the list of sale instances furnished by the petitioners the respondents have only demonstrated non-application of mind in the matter.18. further, there is no material on record placed by appropriate authority to show that there was a steep rise in price of real estate during the period february, 1992 to september, 1992 as found by the appropriate authority in the impugned order. sale instances of properties in the table are of different period and of different properties. with regard to ashoka apartment where properties are similar the sale instances do not reflect any steep rise. even in the apparent consideration reasonable rise in the market price is reflected because appropriate authority has itself considered rs. 1.40 crores as fair market value and the transaction of rs. 1.80 crores after a period of few months cannot be considered to be undervalued more than 15% of the fair market value.19. the learned counsel for the petitioners has rightly relied on the two authorities i.e. the decision of this court in the case of mrs. nirmal laxminarayan grover v. appropriate authority (income-tax department), ahmedabad and others, reported in 1995 tax l.r. 355 wherein it is held that :---'in the matter of compulsory purchase of immovable property under section 269-ud of the income-tax act, the income-tax department must take genuine efforts to find proper material or proper sale instances which are comparable time wise and location-wise with the sale transaction of the property in question under the agreement of sale before proposing its preemptive purchase so that the bona fide purchasers are not harassed and the bona fide transactions are not hampered. also, recourse to compulsory purchase of the immovable property in question under chapter xxc of the act should be taken only in clear cases of gross under valuation from which the inference must clearly flow that it is done for evasion of taxes.in assessing the fair market value of the land, its special value to an owner of an adjoining property of whom it may have some very special advantage is a factor which has to be taken into consideration, because such a buyer is likely to pay more price for the said land than a prudent buyer would otherwise pay. the above factor is therefore recognized as plus factor in determining its market value. the sale instance relied upon by the appropriate authority in the instant case is unjustified because there is special advantage to the purchaser of the land in the sale instance by purchase of the adjoining land because it increases its f.s.i. from 1 to 1.25. the transaction in the sale instance in which the buyer has paid higher value for the land purchased by him, because of the above advantage to him cannot therefore, furnish a good guide for determining the market value of the suit land.'and the case of vijay kumar sharma v. appropriate authority through dy. commr. of i.t. lucknow and another reported in 1995 tax l.r. 720 where the court considered that the relevant material on which the appropriate authority had formed its opinion about under valuation of consideration in agreement of sale by parties ought to have been supplied along with notice and observed as under :---'the provisions under section 269-ud of the income-tax act can be resorted to only when there is a significant under-valuation of the property to the extent of 15% or more then the apparent consideration shown in the agreement of sale. hence, where the show cause notice issued to the parties did not state that in the opinion of the appropriate authority, the fair market value of the property in question was 15% more than the apparent consideration mentioned in the agreement to sell between the parties nor did it refer to the material on which such an opinion was formed and also no document whatsoever was annexed to the said show cause notice, the order for compulsory purchase of property was liable to be set aside. the affected parties were absolutely in the dark about the material that was intended to be used against them for making the order of the compulsory purchase. in order that an effective opportunity of showing cause is given to the affected parties, it was necessary to annex with the notice all the relevant materials that the appropriate authority had collected for forming its tentative opinion and which it wanted to use in support of the order under section 269-ud of the act.'20. in our view, the fact of not furnishing the two tables giving the sale instances of various flats which came to be relied upon by the respondents to the petitioners along with the show cause notice did cause prejudice to the petitioners, further ignoring the sale transactions relied upon by the petitioners is fatal to the case of the respondent and would vitiate the impugned order.21. in view of the judgment rendered by this court in the case of vimal agarwal v. appropriate authority and others, reported in : [1994]210itr16(bom) and the division bench judgment of the gujarat high court in the case of sarwarben temas khambata & others v. appropriate authority reported in : [1995]216itr850(guj) , the respondents-appropriate authority are expected to come to a definite conclusion that the under valuation is by more than 15% of the fair market value and for that purpose it is expected on their part to have arrived at a fair market value of the subject property and demonstrate that there is a difference between the consideration and the fair market value of more than 15%. we find no such assessment in the impugned order is done by the respondents-appropriate authority.22. therefore, taking over all view of the matter and the various authorities on the point, the impugned order is liable to be quashed and set aside.23. the agreement for sale entered into between the parties on 9th september, 1993 under which the subject property was agreed to be sold to the petitioners, it was agreed in clause 2 as under:---'2. the said consideration amount of rs. 1,80,00,000/- (rupees one crore eighty lacs only) shall be paid by the purchasers to the vendor as follows:---a) a sum of rs. 18,75,000/- (rupees eighteen lacs seventy five thousand only) shall be paid by the purchasers to the vendor simultaneously with the execution of these presents as earnest money.b) the balance amount shall be paid within one month after the noc is obtained by the vendor under section 269-uc of the income tax act. the vendor shall sign such papers and letters that are necessary for the purpose of obtaining of noc from the society.c) the transactions shall be completed within one month from the date of obtaining the necessary permissions from the appropriate authority appointed under chapter xxc of the income tax act, 1961 and simultaneously complete the transactions and payment of the balance consideration amount, the vendor shall put the purchasers in vacant possession of the said premises.in the event of the purchasers fail and or neglect to pay the vendor the said balance sum of rs. 1,61,25,000/- (rupees one crore sixty-one lacs twenty five thousand only) within the stipulated period and circumstances as stated above, it will be at the option of the vendor to rescind this agreement without giving any notice, and the vendor shall be entitled to forfeit the entire deposit.'24. as we are quashing and setting aside the impugned order, the petitioners who are the purchasers will be under an obligation to pay the balance amount within one month from the date of this order to the vendor and complete the transaction in all respect. on receipt of the balance consideration as per the agreement the vendor shall put the purchasers in vacant possession of the suit premises. today the respondent nos. 1 and 2- appropriate authority are in possession of the subject property. in the circumstances the petitioners shall pay to the respondent no. 3 (vendor) under the said agreement what is due and payable with interest thereon at the rate of 20% per annum from the date when the appropriate authority returned the apparent consideration to the petitioners as held in the case of rajalakshmi narayanan v. margaret kathleen gandhi and others, reported in : [1993]201itr681(sc) within a period of two months from today i.e. the date on which this petition has been disposed of. on making such payment the respondents-appropriate authority shall hand over the possession of the subject property to the petitioners.25. in the result, the petition is allowed in the aforesaid terms. the impugned order is quashed and set aside. rule is made absolute.