Judgment :- R. JAYASIMHA BABU, J. The property of the petitioner has been sought to be pre-emptively purchased by the Revenue on the ground that the market value stated in the agreement with the purchaser is not the market value and that the difference between the apparent consideration and the market value as determined by the Appropriate Authority exceeds 15%. 2. Form 37-I statement was furnished on 13th October, 1992. The consideration for the transfer set out therein is Rs. 67, 50, 000. The extent of the property is 4 grounds and 1, 555 sq. ft. 3. A show cause notice was issued to the petitioner alleging that a property comparable in value measuring 1 ground 1, 350 sq. ft. at a location very near the property of the petitioner had been sold for Rs. 29, 75, 000 which worked out to a rate of Rs. 16.12 lakh per ground and the consideration as set out in the agreement between the petitioner and the purchaser worked out to a figure which was much less than the same and, therefore, there was undervaluation presumably with the intention to avoid payment of Income-tax. 4. In the show cause notice, it was stated that the comparable property is located on a dead end cross road of about 30' width, called II Avenue, taking off from Casa Major Road, fairly close to the petitioners' property which was right on Casa Major Road itself. The width of Casa Major Road is 40'. It was alleged that because of the petitioners' property being on the main road, the value of that property was higher by 15% over and above that of the property situated on II Avenue, Casa Major Road on a dead end cross. The manner in which that figure of 15% was chosen was not set out in the notice. The petitioner as also the intending purchaser replied to the show cause notice disputing the claim that the property had been undervalued with intention to evade tax and that the value of the property on the Casa Major Road could not be estimated at a figure 15% over and above the value of the property in the Cross Road. 5. The petitioner as also the intending purchaser replied to the show cause notice disputing the claim that the property had been undervalued with intention to evade tax and that the value of the property on the Casa Major Road could not be estimated at a figure 15% over and above the value of the property in the Cross Road. 5. The support for the assertion in the show cause notice that 15% addition to the value as ascertained from the sale of the comparable property was warranted is the note prepared by the Executive Engineer of the Appropriate Authority before the show cause notice was issued. This is what he has noted in that report : "As the location of the property in the instant case is on the main Casa Major Road as against the location of the case under comparison on a Cross Road, which is also dead end road, off Casa Major Road, the fair market rate of land in the instant case can be considered to be atleast 15% more." * 6. It is only by the addition of 15% that the Appropriate Authority could possibly claim that there had been undervaluation. If the rate at which the property sold on the II Cross Road had been adopted, there would have been no basis whatever for alleging any undervaluation. The owner as also the purchaser had in their replies pointed out that the property in question is situated opposite to a school, that there are no neighbours in the immediate vicinity, that the place will be deserted in the evenings and that the location cannot therefore, be regarded as being very much more valuable than the residential property situated in the Cross Road. 7. The provisions in the IT Act providing for pre-emptive purchase is a power conferred on the authorities to be exercised only in a case where there has been undervaluation. Though the expression 'market value' has not been defined in the relevant section or elsewhere in the Act, the "market value" has to be determined rationally on the basis of objective criteria and cannot be left to the whims and fancies of the officer or Authority though in the ultimate analysis the market value remains an estimate. That estimate must be based upon a reasonable foundation of fact. That estimate must be based upon a reasonable foundation of fact. It is for this reason that the Appropriate Authority takes care to find out comparable instances of sale so that the rate at which comparable properties had been sold can be the basis for determining the market value of the property which they are required to estimate. 8. The Supreme Court in C. B. Gautam vs. Union of India & Ors. 1993 (108) CTR(SC) 304 r/w 1993 (110) CTR(SC) 179 : 1993 (199) ITR 530, 1992 (6) JT 678 , 1992 (3) Scale 138 , 1993 (1) SCC 78 , 1992 (108) CTR 304, 1992 (65) TAXMAN 440, 1994 AIR(SC) 771, 1993 UPTC 163, 1992 (108) CTR(SC) 304 (SC) : TC 3PS.87 has laid down that the exercise of power of pre-emptive purchase casts a shadow on the integrity of the parties to direct the transaction inasmuch as there is an imputation of dishonesty to the extent of not stating truthfully the real value of the property when they enter into the agreement. It was, therefore, held by the Court that the person likely to be affected by the order is entitled to notice and hearing. The hearing so given is to be completed in a very short span of time. Neither the authority nor the person affected has the time required to find out all the transactions which can be regarded as comparable and adduce evidence to establish that the transaction was between a willing buyer and willing purchaser acting at arms length and that such transactions will provide the proper basis for determining the market value. 9. It is, therefore, all the more necessary that when an Appropriate Authority holds that the property has been undervalued, its determination is to be based upon firm foundations of fact and does not give room for arbitrariness. The Authority is not required under the terms of the Act to direct purchase of each and every property in respect of which declarations are filed before it. It is not constituted as a buying agent for the Government. It is only required to ensure that parties to the transactions transact honestly and do not avoid payment of tax by deliberately undervaluing the property. 10. Any factor in the exercise carried out by the Appropriate Authority which is liable to be regarded as arbitrary must, therefore, be excluded. It is not constituted as a buying agent for the Government. It is only required to ensure that parties to the transactions transact honestly and do not avoid payment of tax by deliberately undervaluing the property. 10. Any factor in the exercise carried out by the Appropriate Authority which is liable to be regarded as arbitrary must, therefore, be excluded. It is one thing for the Authority to adopt as the basis of comparison the value at which another property in the vicinity has been sold and it is different matter altogether for the Authority to make an addition to that value on the basis of factors considered by it to warrant such addition. Any addition to a recorded value must be fully justifiable. If there is room for doubt as to the correctness of the addition, the benefit must go to the owner of the property and the prospective purchaser rather than the Revenue. 11. In the instant case, had the authority merely adopted the rate at which the property in the Cross Road had been sold, there would have been no case for asserting that there was undervaluation. It is only by reason of the addition of 15% to the value of the other property that undervaluation has been arrived at. No reasons are forthcoming as to why the figure of 15% has been adopted. Had that figure been 5% or 10%, the value still would not have been in excess of 15% over the market value as ascertained from the transaction concerning the property situated nearby. 12. The reasons given by the Executive Engineer which reasons have been adopted by the Appropriate Authority, viz., that the other property was situated in a Cross Road in a dead end are not factors of which it can be said with certainty that a purchaser will offer a lesser price than for a property situated on a main road situated opposite to a school and which may not be ideal for use as a residence. A person looking for a house to live in is more likely to prefer a house which is situate a little in the interior than on the main road opposite to a school where there are no neighbours. The choice of the figure of 15% as an addition therefore, cannot be said to be a relative, rational and objective addition figure. The choice of the figure of 15% as an addition therefore, cannot be said to be a relative, rational and objective addition figure. It is more in the nature of the opinion of the Engineer as to what he thinks should be the addition. Such opinions on the part of the Engineer being blindly adopted by the Appropriate Authority is not a safe basis on which to hold that a transaction which is otherwise bona fide is to be regarded as an instance of deliberate undervaluation with a view to avoid payment of Income-tax. 13. The impugned order directing pre-emptive purchase therefore, cannot be sustained and the same is set aside. In the circumstances, there will be no order as to costs.