1984 (8) TMI 79 - HC - Income Tax

Summary

Issues:
1. Interpretation of s. 269C(2) of the Income Tax Act.
2. Relevance of findings under Chapter XXA in determining capital gains under s. 52(2) of the Act.
3. Burden of proof on the revenue to establish understatement of consideration for invoking s. 52(2).

Analysis:
1. The judgment dealt with the interpretation of s. 269C(2) of the Income Tax Act, which provides conclusive proof in acquisition proceedings if the fair market value exceeds the apparent consideration by a certain percentage. The court considered whether findings under this section could be used to determine capital gains under s. 52(2) of the Act.

2. The court analyzed the relevance of findings under Chapter XXA in determining capital gains under s. 52(2) of the Act. It was argued that the findings in the acquisition proceedings were conclusive proof of understatement of consideration. However, the court held that such findings were based on presumptions and did not establish actual receipt of additional consideration by the assessee.

3. The judgment emphasized the burden of proof on the revenue to establish understatement of consideration for invoking s. 52(2) of the Act. Referring to the Supreme Court's decision in Varghese v. ITO, the court highlighted that the revenue must prove both the fair market value exceeding the declared consideration and actual receipt of additional consideration by the assessee. Mere satisfaction of the first condition does not automatically imply fulfillment of the second condition.

4. Ultimately, the court dismissed the application, concluding that the Tribunal's finding that no material showed the assessee received more than the apparent consideration was not erroneous. The court emphasized that the burden lies on the revenue to establish understatement of consideration independently of the fair market value difference, as required by s. 52(2) of the Act.