SC admits Unitech's plea on tax evasion
The Supreme Court has admitted an appeal filed by real estate major Unitech seeking quashing of a Bombay High Court order that held it liable for undervaluing a property in Maharashtra to evade tax.
By PTI |
NEW DELHI: The Supreme Court has admitted an appeal filed by real estate major Unitech seeking quashing of a Bombay High Court order that held it liable for undervaluing a property in Maharashtra to evade tax.
A bench of Justice B N Agrawal and Justice P P Naoleker admitted Unitech's plea seeking to stay a direction by the government authorities to initiate prosecution proceedings against the developers on the ground the amount paid for the property was low and understated by more than 15 per cent.
Unitech and Vidharbha Engineering Industries had entered into a collaboration in 1994 for developing a property in industrial area of Untkhana in Nagpur for about Rs one crore.
According to Unitech, the High Court did not consider the fact the parties never intended to sell the property and its direction that 100 per cent area of the plot should be acquired was wrong. It said the deal amount should be viewed in the totality of terms and conditions of collaboration agreement, depreciation in market and other expenses.
Besides, the show cause notice for pre-emptive purchase of land did not allege anything about evasion of tax or the undervaluation of the property to evade tax, according to the petition filed by counsel Nidesh Gupta.
The Centre, through Solictor General G E Vahanwati and counsel Mohit Chaudhary, had said the authorities after comparing the prevailing rates in the vicinity area had come to the conclusion that consideration was substantially lower and the property was made to pre-emptive purchase.
"If there is any understatement of the value of the property as determined by the appropriate authority, it gives rise to the presumption that black money is involved in the transaction," the government said in its reply.
A bench of Justice B N Agrawal and Justice P P Naoleker admitted Unitech's plea seeking to stay a direction by the government authorities to initiate prosecution proceedings against the developers on the ground the amount paid for the property was low and understated by more than 15 per cent.
Unitech and Vidharbha Engineering Industries had entered into a collaboration in 1994 for developing a property in industrial area of Untkhana in Nagpur for about Rs one crore.
According to Unitech, the High Court did not consider the fact the parties never intended to sell the property and its direction that 100 per cent area of the plot should be acquired was wrong. It said the deal amount should be viewed in the totality of terms and conditions of collaboration agreement, depreciation in market and other expenses.
Besides, the show cause notice for pre-emptive purchase of land did not allege anything about evasion of tax or the undervaluation of the property to evade tax, according to the petition filed by counsel Nidesh Gupta.
The Centre, through Solictor General G E Vahanwati and counsel Mohit Chaudhary, had said the authorities after comparing the prevailing rates in the vicinity area had come to the conclusion that consideration was substantially lower and the property was made to pre-emptive purchase.
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"If there is any understatement of the value of the property as determined by the appropriate authority, it gives rise to the presumption that black money is involved in the transaction," the government said in its reply.
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