APPROPRIATE AUTHORITY AND ANR. versus KAILASH SUNEJA AND ANR.

Citation: [2001] SUPP. 1 S.C.R. 343 · Decided: 07-08-2001 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Dismissed

Judgment (excerpt)

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APPROPRIATE AUTHORITY AND ANR. 
A 
V. 
KAILASH SUNEJA AND ANR. 
AUGUST 7, 2001 
[S. RAJENDRA BABU AND K.G. HALAKRISHNAN, JJ.] 
B 
Income Tax: 
Income Tax Act, 1961-Chapter XX-C-Acquisition of Immovable 
property by Appropriate Authority-Valuation of Fair Market Value-Basis C 
of-Held, adoption of any method of valuation of the property by the 
Appropriate Authority cannot be interfered with-On facts, there are loopholes 
or lacunae in the process of reasoning adopted by the Appropriate Authority 
in arriving at the conclusions-Hence, acquisition of property is improper. 
D 
Constitution of India, 1950-Article 136 and 226-Scope of Judicial 
Review. 
An agreement for sale of an immoveable tenanted property situated on 
a plot measuring 800 square yards in Delhi, was entered into by respondents 
for a consideration of Rs. 79 lakhs. A statement in Form No. 37-1 was E 
furnished before petitioner-Appropriate Authority as per the provisions under 
Chapter XX-C of the Income Tax Act, 1961. The Appropriate Authority made 
an order of purchase of the property under the provisions of the Act on finding 
that the apparent consideration has been under-valued by 24 % of fair market 
value of the property. The fair market value of the property was calculated 
by the Appropriate Authority after considering sale instances of three different F 
properties. The respondents filed Writ Petitions before High Court against 
the o.rder of the Appropriate Authority. The High Court allowed the Writ 
Petitions of the respondents by holding that the method of valuation of the 
fair market value of the property is not just and reasonable on the ground 
that the Appropraite Authority has compared the values of incomparable G 
properties. 
In appeal to this Court, the Appropriate Authority contended that there 
were several methods of calculating fair market value of an immovable 
property; that the High Court could not interfere with the calculations of fair 
343 
H 
344 
SUPREME COURT REPORTS [2001] SUPP. 1 S.C.R. 
A market value of the property, if it chooses any of the methods; and that the 
scope of interference of the High Court under Article 226 of the Constitution 
is very limited. 
Dismissing the appeals, the Court 
B 
HELD : The scope of interference under Article 226 of the Constitution 
is very limited, but that is only in the nature of a judicial review of the 
proceedings and not by way of appeal or revision where the scope of 
interference is much wider. In cases of the present nature, where several 
methods are available for finding out the value of the property and if any 
method is adopted by the Appropriate Authority, which may be reasonable, 
C then it may not call for any interference. However, if there are loopholes or 
lacunae in the process of reasoning adopted by the Appropriate Authority in 
arriving at the conclusions then the parties who appear before the authorities 
will definitely have a reason to have heart burn. It is unjustifiable if one 
method of valuation is adopted and benefit given to one party is not adopted 
D in the other case to arrive at the conclusion. In this background, if the High 
Court had examined the matter and arrived at a conclusion, it is not necessary 
for this Court to interefere with the finding in a proceeding arising under 
Article 136 of the Constitution. 1349-H; 350-A, B, Cl 
Appropriate Authority and Anr. v. Sudha Patil (Smt.) and Anr., 11998) 8 
E SCC 237 and C.B. Gautam v. Union of India, 11993) I SCC 78, referred to. 
F 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 6050-51 
of 1998. 
From the Judgment and Order dated 17. 12.97 of the Delhi High 
Court in C. W.P. No. 5220/93 and 1988 of 1994. 
Shail Kumar Dwivedi for the Appellants. 
M.S. Syali, K.K. Mohan and Ms. Geetanjali Mohan for the 
Respondents. 
G 
.The Judgment of the Court was delivered by 
RAJENDRA BABU, J. The property comprised in No. G-4(0ld No. 
C-62), Maharani Bagh, New Delhi on a plot measuring about 800 sq. yards 
was agreed to be sold pursuant to an agreement dated July I, 1993 for a sale 
consideration of Rs. 79 lakhs. The property consists of two floors - ground 
H and the first - and is in occupation of the tenants. The agreement provided 
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APPROPRIATE AUTHORITY v. KAILASH SUNE.IA [RAJENDRA BABU. J.] 345 
for symbolic delivery of the possession while it was open to the purchaser to A 
make use of the portion over the roof on the first floor. An application in 
Form 37(1) was filed on 9.7.1993. The Ap

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