{"id":211581,"date":"2000-12-06T00:00:00","date_gmt":"2000-12-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ramesh-bhai-j-patel-etc-etc-vs-union-of-india-on-6-december-2000"},"modified":"2015-03-26T18:01:14","modified_gmt":"2015-03-26T12:31:14","slug":"ramesh-bhai-j-patel-etc-etc-vs-union-of-india-on-6-december-2000","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ramesh-bhai-j-patel-etc-etc-vs-union-of-india-on-6-december-2000","title":{"rendered":"Ramesh Bhai J. Patel Etc. Etc vs Union Of India on 6 December, 2000"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Ramesh Bhai J. Patel Etc. Etc vs Union Of India on 6 December, 2000<\/div>\n<div class=\"doc_author\">Author: Bharucha<\/div>\n<div class=\"doc_bench\">Bench: Y.K.Sabhaewal, S.P.Bharucha, S.N.Hegde<\/div>\n<pre>           CASE NO.:\nAppeal (civil) 1158 1998\n\n\nPETITIONER:\nRAMESH BHAI J.\tPATEL ETC.  ETC.\n\n\tVs.\n\nRESPONDENT:\nUNION OF INDIA\n\nDATE OF JUDGMENT:\t06\/12\/2000\n\nBENCH:\nY.K.Sabhaewal, S.P.Bharucha,, S.N.Hegde\n\n\n\n\nJUDGMENT:\n<\/pre>\n<p>L&#8230;..I&#8230;&#8230;&#8230;T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T..J<\/p>\n<p>      J U D G M E N T<\/p>\n<p>      BHARUCHA, J.\n<\/p>\n<p>      These  are appeals against the judgment and order of a<br \/>\nDivision  Bench\t of the High Court of Gujarat, delivered  on<br \/>\nwrit  petitions.   The controversy before us relates to\t the<br \/>\ncorrect interpretation of Section 269UA(b) of the Income Tax<br \/>\nAct,  1961.  Section 269UA falls within Chapter XX-C of\t the<br \/>\nAct, which deals with the purchase by the Central Government<br \/>\nof  immovable  properties  in  certain\tcases  of  transfer.<br \/>\nSection\t 269UA is the definition section for the purposes of<br \/>\nthe   Chapter.\t Clause\t (b)   thereof\t defines   apparent<br \/>\nconsideration.\t  So   far  as\t is   relevant,\t  `apparent<br \/>\nconsideration means:\n<\/p>\n<p>      (1)  in relation to any immovable property in respect<br \/>\nof  which an agreement for transfer is made, being immovable<br \/>\nproperty  of  the  nature referred to in sub-clause  (i)  of<br \/>\nclause (d), means, &#8212;-\n<\/p>\n<p>      (i)  if the immovable property is to be transferred by<br \/>\nway  of\t sale,\tthe  consideration   for  such\ttransfer  as<br \/>\nspecified in the agreement or transfer;\n<\/p>\n<blockquote><p>      (ii) xxxxx<\/p>\n<\/blockquote>\n<blockquote><p>      (iii) xxxxx<\/p>\n<p>      and  where the whole or any part of the  consideration<br \/>\nfor  such  transfer is payable on any date or dates  falling<br \/>\nafter  the date of such agreement for transfer, the value of<br \/>\nthe consideration payable after such date shall be deemed to<br \/>\nbe  the\t discounted value of such consideration, as  on\t the<br \/>\ndate  of such agreement for transfer, determined by adopting<br \/>\nsuch rate of interest as may be prescribed in this behalf;\n<\/p><\/blockquote>\n<p>      ..<\/p>\n<p>      The  rate of interest in this behalf is prescribed  by<br \/>\nRule  48(i) of the Income Tax Rules and it is eight per cent<br \/>\nper annum.\n<\/p>\n<p>      The contention on behalf of the appellants (assessees)<br \/>\nwas  that there can be no discount of the price mentioned in<br \/>\nthe  agreement\tof transfer and, if there can, the  discount<br \/>\nmust relate to the period between the date of payment of the<br \/>\npurchase price by the Central Government and the date of the<br \/>\nlast payment under the agreement.  No argument was, however,<br \/>\nadvanced  in  respect  of the first  contention.   The\tonly<br \/>\nargument  was based on the premise that the discount is made<br \/>\nbecause\t the  transferor is compensated by  payment  earlier<br \/>\nthan   scheduled  under\t the   agreement;   and\t that\tsuch<br \/>\ncompensation  is  for  the period that is  saved,  that\t is,<br \/>\nbetween\t the  date of payment by the Central Government\t and<br \/>\nthe last date of payment under the agreement.\n<\/p>\n<p>      It  is relevant, before we proceed, to point out\tthat<br \/>\nSection\t 269UG provides that the amount of the consideration<br \/>\npayable\t on  purchase  by  the Central\tGovernment  must  be<br \/>\ntendered  to the person entitled thereto within a period  of<br \/>\none  month from the end of the month in which the  immovable<br \/>\nproperty  vests\t in the Central Government.   Section  269UH<br \/>\nstates\tthat if the Central Government fails to tender\tsuch<br \/>\npayment\t within\t such  time, the order of  purchase  by\t the<br \/>\nCentral\t Government  of the immovable property\tshall  stand<br \/>\nabrogated  and the immovable property shall stand  re-vested<br \/>\nin the transferor.\n<\/p>\n<p>      On  a  plain reading of Section 269UA(b), there is  no<br \/>\ninterlinking  of the apparent consideration to be determined<br \/>\nthereunder  with  the  payment\tto be made  by\tthe  Central<br \/>\nGovernment on purchase under Chapter XX-C.  Section 269UA(b)<br \/>\nprescribes   how  the  apparent\t  consideration\t under\t the<br \/>\nagreement,  that is, the consideration for the agreement, is<br \/>\nto  be\tdetermined, and it states that if the  consideration<br \/>\nunder  the agreement is payable on any date or dates falling<br \/>\nafter\tthe  date  of  the   agreement,\t the  value  of\t the<br \/>\nconsideration  that  is\t payable  after\t  the  date  of\t the<br \/>\nagreement shall be deemed to be the discounted value of such<br \/>\nconsideration  as  on the date of the agreement.   In  other<br \/>\nwords,\tthe apparent consideration in such case will not  be<br \/>\nthe  consideration  that is stated in the agreement  but  it<br \/>\nshall be the amount thereof less a discount to be calculated<br \/>\nin the manner set out in the definition.  The period of such<br \/>\ndiscount  shall\t be  the  period between  the  date  of\t the<br \/>\nagreement  and the date or dates on which the  consideration<br \/>\nor part thereof is payable.\n<\/p>\n<p>      To  put it differently, because, under the  agreement,<br \/>\nthe  transferor\t gives\tthe  transferee\t  time\tto  pay\t the<br \/>\nconsideration,\tthe  consideration is assumed to  comprehend<br \/>\nsome  element of interest for such delayed payment, and this<br \/>\nis   ascertained  and  deducted\t to   arrive  at  the\treal<br \/>\nconsideration\tfor   the  agreement,\t or   the   apparent<br \/>\nconsideration.\t The period of the delay necessarily  starts<br \/>\non the date of the agreement.\n<\/p>\n<p>      Our  attention  was drawn by learned counsel  for\t the<br \/>\nappellants  to the judgment of a Division Bench of the\tHigh<br \/>\nCourt  at  Bombay  in  Shrichand Raheja &amp;  Anr.\t  vs.\tS.C.<br \/>\nPrasad,\t (Appropriate  Authority) &amp; Ors.  [213 I.T.R.\t33].<br \/>\nIt was argued by learned counsel for the Revenue before that<br \/>\nHigh  Court  that,  for\t the  purpose  of  discounting,\t the<br \/>\nrelevant  date is the date of the agreement and not the date<br \/>\nof  the payment by the Central Government and, in support of<br \/>\nhis  submission,  he relied upon the expression as  on\tthe<br \/>\ndate  of  such agreement for transfer in Section  269UA(b).<br \/>\nThe High Court did not agree because, in its view, the plain<br \/>\nreading\t of the definition of apparent consideration made it<br \/>\nclear  that the value of the consideration payable after the<br \/>\ndate  of  the  agreement was the discounted  value  and\t the<br \/>\ndefinition  did\t not  prescribe that  the  discounted  value<br \/>\nshould\tbe  ascertained\t with reference to the date  of\t the<br \/>\nagreement.   In its view, the expression as on the date\t of<br \/>\nsuch  agreement for transfer referred to the  consideration<br \/>\npayable\t on  that  date\t and   was  not\t indicative  of\t the<br \/>\ncommencement  of  the  period to  ascertain  the  discounted<br \/>\nvalue.\n<\/p>\n<p>      We  are  unable to agree.\t The High Court\t appears  to<br \/>\nhave  overlooked  the  purpose\tof   Chapter  XX-C  and\t the<br \/>\ndefinition  of\tapparent  consideration\t thereunder.   The<br \/>\npurpose\t is to determine whether immovable property has been<br \/>\nsought\t to  be\t transferred  at  an  under-valuation.\t  To<br \/>\ndetermine  whether  there has been an  under-valuation,\t the<br \/>\ntrue  consideration  for the transfer has to  be  determined<br \/>\nand,  necessarily, it has to be determined as on the date of<br \/>\nthe  agreement for transfer.  That this is so is clear\tfrom<br \/>\nthe  latter  part of clause (b), which we have quoted;\t the<br \/>\nphrase the discounted value of such consideration as on the<br \/>\ndate  of such agreement for transfer therein indicates\tthe<br \/>\npoint  of time from which the period for discounting must be<br \/>\ncalculated.   For  these reasons, the appeals are  dismissed<br \/>\nwith costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Ramesh Bhai J. Patel Etc. Etc vs Union Of India on 6 December, 2000 Author: Bharucha Bench: Y.K.Sabhaewal, S.P.Bharucha, S.N.Hegde CASE NO.: Appeal (civil) 1158 1998 PETITIONER: RAMESH BHAI J. PATEL ETC. ETC. Vs. RESPONDENT: UNION OF INDIA DATE OF JUDGMENT: 06\/12\/2000 BENCH: Y.K.Sabhaewal, S.P.Bharucha,, S.N.Hegde JUDGMENT: L&#8230;..I&#8230;&#8230;&#8230;T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T..J J U D [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-211581","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Ramesh Bhai J. Patel Etc. 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