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

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

The collaboration agreement did not constitute a sale, exchange, or lease, nor an express transfer; only possessory rights were granted to builder. The authorities erred in treating the consideration as for transfer of built-up area instead of land and wrongly concluded that 78% was transferred to builder. No pre-emptive purchase could have been ordered under Chapter XXC. Thus, the compulsory purchase order and High Court's affirmation were set aside.

Parties
Appellant: Unitech Ltd.; Appellant: Vidarbha Engineering Industries; Respondent: Union of India
Jurisdiction
India
Judgment Date
04 November 2015
Procedural Posture
Civil Appeal / Appeal Against High Court Order
Outcome
appeal allowed
Legal Topics
Compulsory Pre Emptive Purchase, Transfer of Property, Undervaluation, Income Tax, Collaboration Agreements
Tax Law Property Law Compulsory Pre Emptive Purchase Transfer of Property Undervaluation Income Tax Collaboration Agreements

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Parties

Unitech Ltd.

Appellant

Vidarbha Engineering Industries

Appellant

Union of India

Respondent

Procedural Posture

Civil Appeal / Appeal Against High Court Order

Legal Issues

  1. 1 Whether the collaboration agreement between appellants and builder constituted a 'transfer' under Chapter XXC of the Income Tax Act
  2. 2 Whether the order of compulsory pre-emptive purchase under s.269UD was valid considering the nature of rights transferred and alleged undervaluation

Ratio Decidendi

The collaboration agreement did not constitute a sale, exchange, or lease, nor an express transfer; only possessory rights were granted to builder. The authorities erred in treating the consideration as for transfer of built-up area instead of land and wrongly concluded that 78% was transferred to builder. No pre-emptive purchase could have been ordered under Chapter XXC. Thus, the compulsory purchase order and High Court's affirmation were set aside.

Court Disposition

appeal allowed

Orders

  • The impugned order dated 20.02.2004 passed by High Court of Bombay at Nagpur is set aside.
  • Order dated 29.07.1994 passed by the appropriate authority under Section 269UD(1) of the Income Tax Act is also set aside.