(1) THIS common order shall govern the disposal of five writ petitions, namely, CWP 3286/87,3287/ 87,3288/87,3289/87 and 3290/87 filed respectively by Surinder Gupta HUF, Surinder Gupta, Miss Neha Gupta minor (through father Surinder Gupta), Mrs Meenakshi Gupta and Miss Sunita Gupta minor (through father Surinder Gupta) respectively all arising out of an order passed in a set of common facts. The petitioners are seeking quashing of the order dated 6. 11. 1987 passed under Section 269 UD (1) of the Income Tax Act, 1961 whereby the Appropriate Authority has in exercise of the powers conferred by Section 269 UD (i) of the Income Tax Act, 1961 ordered purchase of the suit property at an amount equal to apparent consideration for the transfer of the said property. In each of the writ petitions the Chief Commissioner of Income Tax, the Appropriate Authority, the Union of India and the four vendors have been joined as respondents. The petitioners are the prospective purchasers.

(2) THE suit property is a piece of land measuring 500 sq yards and bearing No. W/69 situated in Block of residential colony of Greater Kailash I, New Delhi, within the limits of Delhi Municipal Corporation along with a 2? storey residential house, servant quarter and garage standing thereon.

(3) THE relevant facts are not in controversy.

3. 1 By a deed of conveyance dated 21. 3. 1964 the suit property was purchased jointly by Harbans Singh, and Jaswant Singh, both in one-half share each. Harbans Singh has expired. He is survived by two sons and two daughters namely Pritipal Singh, Gurcharan Singh, Gulshan, Kaur and Ms. Amarjeet Kaur. Consequent upon the death of Harbans Singh his 50% share in the suit property has devolved upon his four children each having acquired 12. 5% share in the property. However,ms Amarjeet Kaur, the fourth daughter has relinquished her share in favour of her brothers and sister. The three have therefore become entitled each to 16. 66% share in the property. As amongst the heirs of Harbans Singh and Jaswant Singh an oral partition of the property effective from 17. 4. 87 has taken place. A memorandum of partition was recorded on 5. 6. 87. The house was divided by metes and bounds. The schedule annexed with the memorandum of partition sets out the specific description of the parcels which have fallen to the share of each one of the co-owners in accordance with the following shares : Jaswant Singh 50% Pritipal Singh 16. 66% Gurcharan Singh 16. 67% Gulshan Kaur 16. 67%

3. 2 On 25. 8. 87, the abovesaid four owners of the property entered into an agreement to sell the same in favour of the follow ing five purchasers : 1. Shri Surinder Gupta 2. Shri Surinder Gupta HUF through its Karta Surinder Gupta 3. Ms. Meenakshi Gupta 4. Ms. Sumina Gupta minor through her father and natural guardian. 5. Ms. Neha Gupta minor daughter through her natural guardian.

3. 3. There are usual recitals in the agreement. One of the recitals goes to show that each one of the owner- vendors has transferred the property proportionate with his share to one of the purchasers. It will be useful to extract and reproduce the following few recitals from the agreement to sell:

"and WHEREAS the vendors have agreed to sell the said property and the purchasers have agreed to purchase the same for a total consideration of Rs. 40,00,000. 00 (Rupees Forty lacs only) in the following manner :- a) 50% of Shri Jaswant Singh shall be purchased as under : - i) 25% by Shri Surinder Gupta for total consideration of Rs. 10,00,000/ (Rupees Ten lacs only.) ii) 25% by Smt. Minakshi Gupta for total consideration of Rs. 10,00,000. 00 (Rupees Tat lacs only.) b) 16. 66% share of Shri Pritipal Singh shall be purchased by Surinder Gupta, HUF, through its Karta, Shri Surinder Gupta for the total consideration ofrs. 6,66,400/- (Rupees six lakhs sixty six thousand and four hundred only). c) 16. 67% share of Shri Gurcharan Singh shall be purchased by Miss Sumina Gupta minor daughter of Shri Surinder Gupta through her father and natural guardian for the total consideration of Rs. 6,66,800. 00 (Rupees six lakhs sixty six thousand and four hundred only). c) 16. 67% share of Miss Gulshan Kaur shall be purchased by Miss Neha Gupta minor daughter of Shri Surinder Gupta through her father and natural guardian for the total consideration of Rs. 6,66,800. 00 (Rupees six lakhs sixty six thousand and four hundred only)."

xxxx xxxx xxxx

"and WHEREAS the vendors have agreed to sell and transfer their individual shares in the property, as specified here in above, in favour of the respective purchasers, by a single composite sale deed covering all five individual and separate transactions. Now therefore it is hereby agreed between the parties as follows : XXX XXXX XXXX"

2. That the Sale shall be composite transaction relating to the respective shares of the Vendors in favour of the respective purchasers as set out hereinabove. 3. That the aggregate price of the entire property comprising of all the shares of the vendors is Rs. 40,00,000/ (Rupees forty lacs only). The said price shall be payable as follows:- i) Shri Surinder Gupta shall pay to Shri Jaswant Singh in respect of his 25% share a sum of Rs. 10,00,000/- (Rupees ten lacs only). 445 ii) Mrs Minakshi Gupta shall pay to Shri Jaswant Singh in respect of her 25% share of a sum of Rs. 10,00,000. 00 (Rs. ten lakhs only). iii) Surinder Gupta. HUF, shall pay to Shri Pritipal Singh in respect of his 16. 66% share a sum of Rs. 6,66,400. 00 (Rupees six lacs sixty six thousand and four hundred only). iv) Miss Sumina Gupta through her father and Natural guardian Shri Surinder Gupta shall pay to Shri Gurcharan Singh in respect of his 16. 67% share a sum of Rs. 6,66,800. 00 (Rupees six lacs sixty six thousand and eight hundred only). v) Miss Neha Gupta through her father and natural guardian shall pay to Miss Gulshan Kaur in respect other 16. 67% share a sum ofrs. 6,66,800/- (Rupees six lacs sixty six thousand and eight hundred only). 4) That in an aggregate sum of Rs. 29,00,000. 00 (Rupees twenty nine lacs only) representing 72,5000% of the total price consideration has been paid as earnest money by the respective purchasers to the vendors in respect of their respective shares as per details below: a) Shri Surinder Gupta has paid to Shri Jaswant Singh Rs. 7,25,000. 00 vide cheque No. 118814 dated 25. 8. 87 drawn on State Bank of Saurashtra, Nehru Place Branch New Delhi. b) Mrs Minakshi Gupta has paid to Shri Jaswant Singh a sum of Rs. 7,25,000. 00 vide cheque No. 032807 dated 25. 8. 87 drawn on Central Bank of India,, Nehru Place Branch New Delhi. c) Surinder Gupta HUF has paid to Shri Pritipal Singh a sum ofrs. 4,83,140/ vide cheque No. 118835 dated 25. 8. 1987 drawn on State bank of Saurashtra Nehru Place Branch New Delhi. d) Miss Sumina Gupta has paid to Shri Gurcharan Singh a sum of Rs. 4,83,430. 00 vide cheque No. 023007 dated 25. 8. 87drawn on State bank ofsaurashtra Nehru Place Branch New Delhi. c) Miss Neha Gupta has paid to miss Gulshan Kaur a sum of Rs. 4,83,430. 00 vide cheque No. 151481 dated 25. 8. 1987 drawn on State Bank of Saurashtra, Nehru Place Branch New Delhi. The receipt of the above payments is here by acknowledged by the vendors (subject to encashment of the said cheques). 5) That the balance amount of Rs. 11 ,00,000. 00 shall be paid by the purchasers to the vendors at the time of the execution and registration of the Sale Deed as follows : a) Surinder Gupta shall pay to Sh Jaswant Singh Rs. 2. 75/0/ (Rupees two lacs seventy five thousand only). b) Smt. Minakshi Gupta shall pay to Shri Jaswant Singh Rs. 2,75,000. 00 (Rupees two lacs seventy five thousand only). c) Surinder Gupta, HUF shall pay to Shri Pritipal Singh Rs. 1,83,260. 00 (Rupees one lac eighty three thousand and two hundred sixty only): d) Miss Sumina Gupta shall pay to Shri Gurcharan Singh Rs. 1,83,370. 00 (Rupees one lac eighty three thousand three hundred and seventy only). e) Miss Neha Gupta shall pay to Miss Gulshan Kaur Rs. 1,03,370/ (Rupees one lac eighty three thousand and three hundred seventy only)

xxxx xxxx xxxx3. 4 The gist of the transactions, as disclosed by the agreement to sell is placed in a tabulated form as under :- VENDOR SHARE in PURCHASER Consideration Property Rs Jaswant Singh 25% Surinder Gupta 10,00,000. 00 Jaswant Singh 25% Minakshi Gupta 10,00,000. 00 Pritipal Singh 16. 66% Surinder Gupta HUF 6,66,400. 00 Gurcharan Singh 16. 67% Sumina Gupta 6,66,800. 00 Gulshan Kaur 16. 67% Neha Gupta 6,66,800. 00- TOTAL 100% Rs. 40,00,000. 00

(4) THE four vendors and the five vendees filed a joint statement of transfer of immoveable property to be furnished to the Appropriate Authority under Section 269 UC in the prescribed form 37-I. The possession over the property forming subject matter of the agreement to sell was physically delivered by the vendors to the vendees and receipt reciting delivery of possession was executed on 25. 8. 87.

(5) ON the statement in form 3 7-1 having been filed the proceedings under Chapter XXC were initiated by the respondent leading to the impugned order under Section 269 UD (1) of the Income Tax Act.

(6) THOUGH there was a challenge laid to the vires of provisions of Chapter XXC but the same has been given up by the learned counsel for the petitioner in view of the decision of the Supreme Court in CB Gautam's case 1993 (119) ITR 530. The only question that survives for decision in this case is whether the transaction as evidenced by the agreement to sell and receipt of delivery of possession dated 25. 8. 87 has to be treated as one transaction to sell or five transactions of sale though recorded and evidenced by a single document.

(7) THE point is no more res Integra. It is settled by a number of authorities from different High Courts.

(8) THE facts of this case bear a close similarity to the facts of the case in K. V. Kishore and Anr. vs Appropriate Authority, (1991) 189 ITR 264 (Madras). A certain piece of land was allotted to one S by the City Improvement Trust Board-Bangalore. S died in 1962 leaving behind his wife, a son and three daughters. A family arrangement was entered into specifying the shares of the heirs in the land. All the heirs joined together and sold the land. The agreement of sale stated that the vendors had agreed to the execution of a single deed as a matter of convenience. The individual share of each of the vendors was less than Rs. 10 lakhs but the total value of the consideration was Rs. 20 lakhs. Acquisition proceedings were initiated under section 269ud of the Income tax Act 1961. On a writ petition to quash the proceedings, it was held :

'that the original allottee of the land died in the year 1962. He being a Hindu, governed by the Hindu Succession Act, on his death, his wife and children acquired a vested right to the definite quantified shares in the property left behind by him. As owners of their respective shares, they were competent to enter into a family arrangement which they did on April 8. 1987 under the terms of which, each one of the respondents No. 4 to 8 were allotted a definite share in the property. After April 8, 1987, they were individual owners of definite share in the properly. Each one could deal with only his respective share and he cannot deal with the share of another The property which so falls to the share of each individual w ill come definitely within the definition of the words "immovable property". Such a sharer was entitled to transfer his immovable property to a third person. Merely because a plurality of such indh idual owners joined together to enter into one single agreement to transfer their respective shares in favour of one or more persons, that would not make am difference to the main issue that what each transferred was his definite share of the property. It was not in dispute that the value of each such share was less than Rs. 10 lakhs. Section 269 UD was not, therefore, applicable. The order of acquisition was liable to be quashed. "

(9) YET another decision of Madras High Court in N. C. Rangesh and others vs. Inspector General Registration and Ors, 1990 (189) ITR 2 70 has been brought to our notice. It w as in the context of a circular issued by IGR to the effect that in case w here undivided interest in immoveable property is sold a certificate under S. 230-A of the Income Tax 1961 or a no-objection certificate under Chapter XX-C from the appropriate authority will have to be obtained if the value of the entire property happens to be more than Rs. 2 lakhs or Rs. 10 lakhs as the case may be. The circular w as struck down as not warranted by law and as being contrary to law. The learned Judge has held :

" The criteria to obtain a certificate either under section 230a or under Chapter XXC should be the value of the property or the interest of the person in the property that is sought to be transferred and it is only with reference to that that the income-tax clearance certificate could be insisted upon. When an undivided share is sold under a valid sale deed or a valid agreement of sale as provided in the Transfer of Property Act for a consideration which is below the limit prescribed under Section 230a or Chapter XXC the said provisions will not apply."

(10) THE Madras High Court has taken the same view in R. Lokeshwari vs State of Tamil Nadu (1992) 196 ITR 501 (Madras). The Madras view has been approved and followed by the High Court of Karnataka in Appropriate Authority vs JSA Raghava Ready and Ors, (1993) 199 ITR 508 (Karnataka). Andhra Pradesh High Court has also taken a similar view in S. Ganesh Rao vs State of A. P. (1988) 174 ITR 304.

(11) INCIDENTALLY we may refer to two other decisions, the law propounded w herein though in a different context lends support to the view taken hereinabove.

11. 1 The Commissioner of Gift Tax Karela vs. R Valsala Amma, (1971) 82 ITR 828 w as a case under Gift Tax Act. The assessee and her sister had received under the will of their mother, inter alia a cinema theatre building with machinery and another building called "police quarters". Each one of them had a half share in the properties. They gifted these buildings to their brother by means of a single gift deed and the question w as whether the assessee and her sister should be assessed in respect of the gift as individuals or as an association or body of individuals. Their Lordships have held :

"now the question is in what capacity the gift was made by the assessee. Did they do it as an association or as a body of individuals or as individuals. The property received by the assesses under the will of their mother was admittedly received by them as cotenants. Each one of them had half share in that property. The question whether they divided that property or not is not a material question. In law each one of them had half the right in the property that they gifted to their brother. They were holding that property as tenants in common and not as joint tenants. Hence they made the gift as tenants-in-coinmon and not as joint tenants. Each one must be held to have made a gift other share of the property ft is made through one single document It is surprising that the Income lax officer or the appellate Assistant Commissioner or the Tribunal should have ever thought that the gift in question was by an association or by a body of individuals. The Gift-tax Act did not change the general law relating to the rights of property It merely sought to tax a gift of the property owned by a person. As mentioned earlier the property with which we are concerned in this case is a property owned by two persons as tenants-in-common, each one having a definite share."

11. 2 Commissioner of Income Tax vs T. V. Suresh Chandran, (1980) 121 IT R 985 (Karela) was a case under Section 269-C of the Income Tax Act. The transferors were co-owners having inherited the property from ancestors. They transferred the property to four persons with one deed. The Competent Authority initiated proceedings for acquisition of the property by treating the entire property as one. It was held that each one of the four transferees had absolute right to the property so transferred to him and in the property transferred to one the other transferees had no right. The right of each of transferees to the property was absolute. The fact that the transferees may make common use of the property purchased by them is a factor which would have no bearing on the purchase itself. Had the sale been effected by four instruments the case urged by the revenue may not have arisenlt make no difference merely because the four sales w ere covered by one instrument. Section 269c w as held to be inapplicable.

(12) THE object behind the enactment of Chapter XXC is to prevent transactions by shady transfer or exchange of immovable property for under the table considerations as to generate back money. The general law relating to property rights and governing transfer of immoveable property has not undergone any change or been effected by the provisions of Chapter XX-C. It remains what it w as as if Chapter XXC of the Income Tax Act, 1961 was not enacted.

(13) IN the case at hand the facts found project an entirely different picture. Even at the risk of repetition let the facts not in dispute, be noticed in their chronological order.

13. 1 The property was purchased jointly by Jaswant Singh and Harbans Singh from M/s DLF Housing Construction by sale deed dated 21. 3. 64. Both of them got a building plan sanctioned from the MCD and raised a house w ith 2? storeys. Harbans Singh expired and his fifty percent share in the property devolved upon his four heirs, one of whom, namely, Amarjeet Kaur relinquished her share in the property in favour other brothers and sister.

13. 2 All the co-owners thereafter decided to have the property partitioned amongst themselves proportionately with the share held by each of them. There was an oral partition which is evidenced by a memorandum of partition dated 5. 6. 8 7. The property has been partitioned by metes and bounds. On25. 8. 87 all the owners of the property have entered into an agreement, each one of them agreeing to transfer his share in the property and the property which has fallen to his share consistently w ith the entitlement to a prospective vendee. The agreement entered into between the parties states all the relevant facts including the factum of partition. The actual property which has fallen in partition to the share of each of the vendors is mentioned. The agreement recites separately the consideration pay able to each of the vendor by each of the prospective vendees. Each of the vendors could have entered into a separate agreement to sell However, they have entered into only one agreement The correctness of the facts stated in the agreement is not disputed by the respondents nor could it have been

(14) THE respondents could not have in law treated the several different transactions evidenced by the agreement as one and then proceeded to apply the provisions of S 269 UD of the Act.

(15) IN the opinion of this court, though there is one agreement to sell, it must be deemed that there are four transactions of immoveable property entered into by four owners in favour of five vendees. It is only the transaction entered into by Jaswant Singh in favour of Surinder Gupta and Minakshi Gupta alienating his 50% share in the property for a consideration of Rs. 20 lakhs (25% each for Rs. 10 lakhs) which could have attracted the applicability of S. 269 UD of the Act. In so far as the proposed sales contained in the agreement to sell dated 25. 8. 87 by Pritipal Singh and Gurcharan Singh and Gulshan Kaur are concerned. the apparent consideration for each of the transactions being less than Rs. 10 lakhs. Section 269 UD of the Act is not at all attracted to am of them.

(16) THE learned counsel for the respondents has relied on a decision of Bombay High Court in Jodhram Daulatram Arora vs M B Kodnani (1994) 75 ITR 521. Having carefully perused the Bombay decision we are satisfied that it does not help the respondents. Madras view in K. V. Kishore's case (supra) and N. C. Rangesh's case (supra) was cited before the Division Bench of Bombay High Court. Bombay High Court has not expressed any dissent w ith the Madras view of the law. What the Division Bench has stated is that on the facts of the case before it the petitioners (before it) had purchased the property in joint ownership, the shares were undivided, the transaction was one and it could not be said that each of the petitioners had individually agreed to buy individually an undivided share in the property from the vendor. The agreement did not mention any price separately being paid for each undivided share. The consideration was one for the whole joint property. On these facts the Madras view of the law was held to be inapplicable.

(17) FOR the foregoing reasons CWP No. 3286/87, 3288/87, 3290/87 filed respectively by Surinder Gupta, HUF, Ms Nehra Gupta and Ms Sunita Gupta are allowed. The impugned order dated 6. 11. 1987 and all the proceedings under Chapter XX-C of the Income Tax Act, 1961 in so far as the interest in the property or the properties belonging to Pritipal Singh Gurcharan Singh and Gulshan Kaur are concerned are set aside.

(18) IN so far as Jaswant Singh is concerned, to the extent of the property owned by him and sought to be alienated the impugned order would stand.

(19) THE relief to be granted shall have to be moulded and worded in accordance with the law laid down and relief granted by the Supreme Court in C. B. Gautam's case (supra). Consistently, there with it is directed that the statement inform No. 3 7-1 jointly submitted by the several petitioners as set out earlier shall be treated to have been submitted only by the vendor Jaswant Singh as regards the 50% share of the property owned by him and the agreement entered into by him with Surinder Gupta and Smt. Minakshi Gupta. Remaining part of the form 37-1 shall be treated as redundant. The statement shall be deemed to have been submitted on the date of signing of this judgment. Thereafter if the appropriate authority considers it fit it may issue a show cause notice calling upon the petitioner Jaswant Singh and his vendees to show cause why an order for compulsory purchase of the property in question should not be made under the provisions of sub section (1) of Section 269 UD and give a reasonable opportunity to the persons noticed to show cause against such an order being made. Having afforded such an opportunity if the Appropriate Authority considers it fit, it may hold an enquiry even though summary in nature and may pass an order for compulsory purchase by the Central Govt of the property in question under Section 269 UD (1). The Appropriate Authority w ill have to decide whether an enquiry is called for in the facts and circumstances of the case after the show cause notice is issued: If an order for compulsory purchase of the property is made hereafter the Central Govt. shall pay to the intending seller the amount of apparent consideration plus interest @ 9% p. a. from 6-11-1987 the date on which the impugned order was made. No order as to costs.

(20) ALL the five petitions stand disposed of. 21. One copy each of this order shall be placed in the records of CWP No 3287/87 and 3289/87.