HC expresses concern on low prices quoted in sale deeds

HC expresses concern on low prices quoted in sale deeds
PRESS TRUST OF INDIA

NEW DELHI, SEPT 18: The Delhi High Court has taken note of parties in sale and purchase deeds showing the value of properties much lower than the actual price with intent to circumvent the provisions of Income Tax Act and make payment in black money.

"It has become common place for parties to enter into agreements to sell for a particular consideration (price)... and execute agreements for a lesser consideration after taking into account the cash component received," Justice Vikramjit Sen in a recent judgement said.

"Intention of the parties is to circumvent the provisions of Income Tax Act, which have been inserted with the specific intent of combating the scourge of black money," the court said while rejecting the petitions for interim injunction against dispossession of two purchasers of flats on the first and second floors of a house here in which the agreement made for sale of second floor was allegedly forged.

Imposing a litigation cost of Rs 15,000 on each of the purchaser, Justice Sen said "where such parties fall out, it is not open to or expected of the court to countenance these transactions."

A lower court earlier had sent one of the purchaser to judicial custody for alleged forcible possession of the first floor and rejected his bail for allegedly "forging documents" in a sale deed executed by one Laksmi Narain Gupta of Mumbai in September 1996.

Purchaser, Ashok Jain, is currently lodged under judicial custody in Tihar jail for allegedly occupying Gupta's first floor flat in Safdarjung area forcibly after executing a deed for the second floor.

The High Court rejecting Jain's petition for interim injunction against dispossession by Gupta, said "the documents relied upon by the plaintiffs (Jain and his brother Parveen Jain) do not indicate that there was a complete or concluded contract between them."

The plaintiffs' failure to indicate the existence of two agreements to sell the properties on September 25, 1996 in the suits filed in the lower court was a material suppression which was sufficient to "disentitle" them from granting the temporary injunction, the court said.

"The plaintiffs have been shifting stands and stories far too frequently to enthuse respect and credibility," it said.

Though the Jains had claimed to have made payments of Rs 21 lakh and 30 lakh to Gupta, no receipt was produced, it said adding the total cost of the two flats was put at Rs 1.11 crore by the defendent (Gupta).

No explanation was forthcoming on the important question on why the sale consideration was quoted lower, Justice Sen said adding "It appears to me, these agreements may have been contemplated in order to circumvent the obtainment of the permission from the competent authority."