UNITECH LTD. &ANR. versus UNION OF INDIA & ANR.

Citation: [2015] 12 S.C.R. 992 · Decided: 04-11-2015 · Supreme Court of India · Bench: MADAN B. LOKUR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
[2015] 12 S.C.R. 992 
UNITECH LTD. &ANR. 
v. 
UNION OF INDIA&ANR. 
(Civil Appeal No. 430 of 2007) 
NOVEMBER 04, 2015 
[MADAN B.·LOKURAND S.A. BOBDE, JJ.) 
Income Tax Act, 1961 - Chapter XXC, s. 269UD - · 
c Compulsory pre-emptive purchase - Appellant no. 2 
obtained land on lease and entered into collaboration 
agreeuient with a building company to develop and construct 
a commercial complex on the said land - Builder would 
retain 78 % of the developed area and transfer 22 % to the 
D share of appellant as consideration - Submission of 
statement u/s. 269UC by appellant- Issi.Janee of show cause 
notice by revenue authorities that there was undervaluation 
of the property - Objections by the appellant - Rejection of 
E the objections and order of compulsory pre-empti11-e purchase 
under Chapter XXC passed by the Appropriate Authority u/ 
s. 269UD - Writ petition by appellant challenging the said 
order- Dismissal by High Court- On appeal, held: Appellant 
is not an owner.but only a lessee of the land - It could not 
F convey a title which it did not possess itself - No clause in 
the agreement purports to effect a transfer - Also in 
consideration of the licence, the builder agreed that the 
appellant would have a share of 22% in the constructed area 
- It is contemplated that upon construction the builder would 
G retain 78% and the share of appellant would be 22% of the 
built up area - Thus, the transaction cannot be construed as 
a sale, lease or a licence, only possessory rights have been 
granted to builder to construct the building on the land -
Authorities erred in holding that the consideration for the 
H 
992 
UNITECH LTD. &ANR. v. UNION OF INDIA&ANR. 
993 
subject property was understated in holding that appellant A 
transferred property to the extent of 78% to builder -
Appellants never stated that the consideration for Rs. 
1, 00, 40, 0001- was in respect of the built up area but stated 
that it was for transfer of the subject land-A/so, there was no 
evidence to conclude that appellant had transferred 78% of 8 
the built up area to builder and retained 22% - Objects of the 
provision is to prevent evasion of taxes by undervaluation -
Thus, no pre-emptive purchase could have been ordered -
High Court failed to render a finding on the relevance of c 
comparable sale instances- Order passed by the High Court 
as also the order passed by the appropriate authority uls. 
269UD (1) is set aside. 
Ashis Mukerji v. Union of India and Ors [1996] 
222 ITR 168 - approved. 
Amarjit Thaparv. S.K. Lau/ & Ors. (2008) 298 ITR 
336 - disapproved. 
D 
C.B. Gautam v Union of India (1993) 1 SCC 
E 
78:1992 (3) Suppl. SCR 12- referred to. 
Case law reference 
approved 
Para 5 
(2008) 298 ITR 168 
(2008) 298 ITR 336 
disapproved. . 
Para 12 
1992 (3) Suppl. SCR 12 referred to. 
Para 12 
F 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 430 G 
of2007. 
From the Judgment and Order dated 20.02.2004 of the 
High Court of Judicature at Bombay, Nagpur Bench in Writ 
Petition No. 2203of1994. 
1-1 
994 
SUPREME COURT REPORTS 
[2015] 12 S.C.R. 
A 
V.A. Mohta, Sr.Adv., Devansh Mohta, Siddhesh Kotwal, 
Nilakanta Nayak, Shreya Bhatnagar, Raghunatha Sethupathy, 
B. D. Das, Nirnimesh Dube, Anirudhha P. Mayee, Advs., for 
the Appellants. 
B 
Arijit Prasad, Gargi Khanna, Anil Katiyar, B. V. Balaram 
Das, Advs., for the Respondents. 
The Judgment of the Court was delivered by 
c 
S. A. BOBDE, J. 1. This appeal is preferred by the 
appellants, who suffered an order of compulsory pre-emptive 
purchase under Chapter XXC of the Income Tax Aet, 1961 
(hereinafter referred to as 'the Act') passed bytheAppropriate 
Authority under Section 269UD of the Act. 
D 
2. Vidarbha Engineering Industries - Appellant No. 2 
(hereinafter referred to as 'Vidarbha Engineering') holds on 
lease, three plots of land admeasuring 2595.152 sq mtrs i.e. 
27934 sq ft at Dahipura and Untkhana, Nagpur (hereinafter 
E referred to as the 'subject land'). This land is comprised of 
three plots of land i.e. Plot Nos. 34, 35 and 36 obtained by 
Vidarbha Engineering from the Nagpur Improvement Trust. 
Vidarbha Engineering decided to develop the subject land and 
entered into an agreement forthe purpose with Unitech Ltd. 
F (herein after referred to as 'Unitech'). The Memorandum of 
Understanding between them was formalized into a 
collaboration agreement dated 17 .03.1994. Under this 
agreement the land holder agreed to allow Unitech to develop 
and construct a commercia

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