Compulsory pre-emptive purchase not necessary in collaboration agreement between owner & developer

Brief of the case:

In case of Unitech Ltd. Vs. UOI Hon’ble SC has set aside the order passed by Bombay HC in a writ petition filed by asseessee against the order under section 269UD. Hon’ble SC have held compulsory pre-emptive purchase illegal. Hon’ble court take note of its observation in C.B. Gautam’s case ((1993) 1 SCC 78) that unless the difference in the apparent effective consideration and the market value is more than 15%, the Appropriate Authority cannot assume jurisdiction under section 269-UD of the Act. The same does not mean that the mere fact that such difference is more than 15% will, automatically, lead to the conclusion that there has been undervaluation of property with the motive of evading tax.

Facts of the case:

• Vidarbha Engineering Industries i.e. Appellant No. 2 holds on lease, three plots of land at Nagpur, referred to as the ‘subject land’ in the judgment.

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