2000 (12) TMI 61 - HC - Income Tax

Summary

Issues Involved:
1. Applicability of section 52(2) of the Income-tax Act, 1961 to the case of the assessee.
2. Deletion of the addition of Rs. 21,327 made on account of reversionary value of the land in arriving at the fair market value of the property.

Judgment Details:

Issue 1: Applicability of section 52(2) of the Income-tax Act, 1961
The case involved the assessment of an individual, where the Assessing Officer added capital gains to the assessee from the sale of a property. The fair market value of the property was determined by the Valuation Officer, and the Assessing Officer invoked section 52(2) of the Act to adopt this value as the sale consideration. The Tribunal, however, held that section 52(2) was not applicable as there was no material indicating any receipt over and above the declared consideration in the sale deed. The Tribunal's decision was supported by various High Court decisions and aligned with the apex court's ruling in K.P. Varghese v. ITO [1981] 131 ITR 597. Consequently, the first question was answered in favor of the assessee, and the reference was disposed of accordingly.

Issue 2: Deletion of Addition on Account of Reversionary Value
The second issue pertained to the deletion of an addition made on account of the reversionary value of the land in determining the fair market value of the property. However, due to the resolution of the first issue in favor of the assessee, the second question became of academic interest and was not addressed in the judgment.

Therefore, the High Court of Delhi ruled in favor of the assessee regarding the applicability of section 52(2) of the Income-tax Act, 1961, based on the absence of material indicating any receipt beyond the declared consideration, in line with relevant legal precedents.