Maimunabai Usman and Anr. Vs Appropriate Authority and Ors.

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 IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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 ORDINARY ORIGINAL CIVIL JURISDICTION

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 WRIT PETITION NO. 125 OF 1993

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 1. Maimunabai Usman

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 2. Mohamed Aslam Mohamed Usman

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 3. Mohamed Arshad Umar Kagzi

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 4. Human Arshad Kagzi .. Petitioners

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V/s

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 1. Appropriate Authority

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 2. Union of India .. Respondents

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 Ms.Asifa Khan with Mr.K.B. Bhujle for the Petitioners.

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 Mr.R. Asokan for the Respondents.

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 CORAM : H.L. GOKHALE & J.P. DEVADHAR, JJ.

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 DATE : 9TH OCTOBER 2006

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ORAL JUDGMENT : (Per H.L. Gokhale, J.)

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 1. Heard Ms.Khan for the Petitioners and Mr.Asokan

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 for the Respondents.

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 2. Petitioners No.1 and 2 were owners of a flat
 bearing No.902 on the 9th floor of "C" Wing in Kanti
 Apartment, Mount Mary Road, Bandra (West),
 Mumbai-400050. They were interested in selling the said
 flat. They entered into an agreement on 6th October
 1992 to sell the same to Respondents No.3 and 4. The
 flat was to be sold for Rs.19 lakhs. Thereafter as per

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 the requirement of Chapter XX-C of the Income Tax Act,
 1961, they filed the necessary Form 37-I for approval of
 the said transaction on 15th October 1992.

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 3. Petitioners No.3 and 4 received a notice dated
 15th December 1992 from the Appropriate Authority. This
 notice stated that they should show cause as to why an
 order should not be made in their case under section
 269UD(1) of the Income Tax Act. They were asked to
 attend before the Appropriate Authority on 22nd December
 1992.

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 4. The Petitioners accordingly attended before the
 Appropriate Authority and filed their written statement
 on 22nd December 1992. In this statement, they cited
 two instances of transaction in the same building. One
 was Flat No.104 on the first floor having an area of 915
 sq.ft. built-up, which was sold for Rs.23 lakhs in June
 1992 and the other one was a flat on the 10th floor in
 "C" Wing having an area of 615 sq.ft. which was sold in
 August 1992 for Rs.19 lakhs. The Petitioners appeared
 before the Appropriate Authority through their Chartered
 Accountant and the submissions of the Chartered
 Accountant were noted. The Appropriate Authority passed
 an order holding that there was an under valuation and,
 therefore, directed compulsory acquisition of the said
 flat by its order passed on 30th December 1992. The

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 reasons were enclosed in the annexure thereto. It is
 this order which is challenged in the present petition.

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 5. The petition came up for admission on 28th
 January 1993 when Rule was issued and interim order was
 passed in terms of prayer (c) of the petition which
 restrained the Respondents from taking possession of the
 concerned flat.

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 6. Today when the matter reached for final hearing,
 Ms.Khan for the Petitioners pointed out that although
 four instances are referred in the reasons given by the
 Appropriate Authority, they were not supplied to the
 Petitioners in advance to enable them to give their
 comments thereon. This has resulted into denial of
 natural justice. In any case, she submitted that out of
 the two instances, which were cited by the Petitioners,
 the second one, namely Flat No.C-3 on the 10th floor in
 the same building is situated just above the flat
 involved in the present petition. It is of the
 identical size and it has also been sold for Rs.19
 lakhs. As far as that transaction is concerned, the
 Appropriate Authority consisting of the very three
 officers has granted a certificate under section
 269UL(3) of the Income Tax Act accepting that there was
 no under valuation.

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 7. Alternatively, she submitted that even if one
 takes the figures which are disclosed in the order, it
 is seen that this flat on the 10th floor was sold at the
 rate of Rs.3352/- per sq.ft. The order itself records
 that the present flat was sold at the rate of Rs.3164/-
 per sq.ft. Even if these two figures are taken
 together, it will mean that the Petitioners’ flat has
 undergone a transaction at a rate which is less by
 Rs.188/- which is hardly 5% or so when compared to
 Rs.3352/- which is the rate of the transaction for the
 10th floor flat. Assuming without accepting that the
 calculations of the Appropriate Authority are correct,
 she submits that this was in any case not an occasion to
 acquire the flat since there was no under valuation to
 the tune of 15% involved. This yardstick of 15% is
 reflected in the judgment of the Supreme Court in the
 case of C.B. Gautam v. Union of India - 199 ITR 530
(at page 553).

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 8. Mr.Asokan, learned counsel appearing for the
 Revenue, on the other hand, submitted that the
 Appropriate Authority was right in arriving at the
 decision and it has referred to and relied upon four
 different instances in the annexure.

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 9. We have noted the submissions of both the
 counsel. In our view, both the submissions made by the

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 counsel for the Petitioners are correct. Firstly, the
 instances, which were relied upon by the Revenue, ought
 to have been made available to the Petitioners to enable
 them to defend themselves properly. This position has
 been laid down in two Division Bench judgments of this
 Court reported in Shreyas Builders v. M.D. Kodnani -
242 ITR 320 and Jagdish Electronics (India) Pvt. Ltd.

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v. Appropriate Authority - 242 ITR 326. Besides, the
 four instances which the Revenue has relied upon are
 from four different buildings though located in the same
 area. As against that, the Petitioners have drawn
 attention to two instances from the very building. Out
 of the two flats, one is on the fifth floor, but it is
 in "A" Wing. So we may not treat it as a comparable
 instance. The other flat in the "C" Wing on the 10th
 floor is identical to the one which is involved in the
 present transaction and, as stated above, even as per
 the calculations reflected in the order of the
 Appropriate Authority, there is no undervaluation to the
 tune of 15% involved in the present petition.

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 10. This being the position, we have no alternative
 but to quash and set aside the order which has been
 impugned in the present petition. Accordingly Rule is
 made absolute and the decision and the order dated 30th
 December 1992 passed by the Appropriate Authority is
 hereby quashed and set aside. There will be no order as

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 to costs.

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 11. When the petition was admitted on 28th January
 1993, the Respondents were given liberty to deposit the
 amount of apparent consideration with the Prothonotary &
 Senior Master. Mr.Asokan states that the amount has
 been so deposited. The Prothonotary & Senior Master
 will refund that amount with accrued interest, if any,

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 to the Respondents.

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 (H.L. GOKHALE, J.)

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 (J.P. DEVADHAR J.)

Maimunabai Usman and Anr. v. Appropriate Authority and Ors.

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