HIMUDA-lessor wasn’t entitled to an unearned increase as there was no transfer of leasehold rights on an acquisition of co.
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Case details: Mahle Filter Systems India Ltd. v. Himachal Pradesh Urban Development Authority (HIMUDA) - [2021] 129 taxmann.com 74 (Himachal Pradesh)
Judiciary and Counsel Details
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- Vivel Singh Thakur, J.
- Ms. Manisha Gandhi, Sr. Adv., Suvineet Shamra and Rahul Mahajan, Advs. for the Petitioner.
- Bhupinder Gupta, Sr. Adv., Ajeet Singh Jaswal, Adv., Desh Raj Thakur, Addl Adv. General, R.P. Singh, Adv., General, T.S. Chauhan and Abhay Kaushal, Advs. for the Respondent.
Facts of the Case
In the instant case, Respondent-Authority allotted two industrial plots on lease to petitioner company whereupon petitioner established its manufacturing facilities. However, terms of lease put bar on petitioner on selling, transferring, or otherwise parting with possession of whole or any part of industrial plots without previous consent of Authority . Later on, the petitioner acquired another company.
It was a case of respondent that pursuant to a said acquisition, leasehold rights of said plots had been transferred by petitioner in name of acquired company without previous consent of the respondent, causing the violation of lease deed warranting payment of 50 percent amount of unearned increase to said Authority.
High Court Held
However, the High Court noted that pursuant to a said acquisition, assets of the petitioner had not been transferred rather assets of acquired company had been transferred in favour of the petitioner. There being no transfer of leasehold rights of industrial plots, no previous consent of respondent-authority was required and consequently, Authority was not entitled to claim a 50 per cent unearned increase.
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