1992 (7) TMI 122 - AT - Income Tax

Summary

Issues involved: Appeal against Gift-tax assessment based on property transfer for inadequate consideration.

Summary:
The appellant sold a property for Rs. 70,000, but the Gift-tax Officer (GTO) assessed the taxable gift at Rs. 65,000 based on market value. The Deputy Commissioner of Income-tax (Appeals) upheld this decision. The appellant argued that the GTO erred in relying on registration authorities' value for stamp duty, which lacks a rational basis. The appellant cited precedents to support their case.

The Departmental Representative (DR) defended the GTO's decision, stating that registration authorities' values are not arbitrary. After considering both sides, the Tribunal found in favor of the appellant. They noted the lack of evidence supporting the registration authorities' valuation and emphasized the need for a more rational valuation process as seen in Wealth-tax and Gift-tax Laws.

Referring to a High Court decision, the Tribunal highlighted the importance of a thorough investigation before deeming a transaction inadequate. They emphasized that the burden of proof lies with the revenue authority. Ultimately, the Tribunal concluded that the GTO was unjustified in assessing the appellant under section 4(1)(a) of the Gift-tax Act, thereby allowing the appeal and vacating the lower authorities' orders.