Assessing officers should be alerted deciding matters under one direct tax law . - Income Tax - 1249/CBDT

INSTRUCTION NO. 1249/CBDT Dated : April 11, 1979 Attention is invited to Board's Instruction No. **592 (F.No.236/159/72-A PAC), 595 (F.No.313/13/73-ED), 544(F.No.301/126/72-ED), 494 (F. No. 309/6/72-ED) and DOMS Circular No. 3/16/73-DOMS, dated 15.11.1973 in which it was impressed upon the Income-tax Officers that at the time of deciding matters under one direct tax law the information contained in the records pertaining to the other direct taxes should invariably be correlated and made use of. In spite of the issue of these instructions, the Audit have brought to the notice of the Board, many instances where there has been failure to effect such correlation. 2. Some of the common instances pointed out by the Audit relate to the following matters- (i) Transfer of non-business assets without adequate consideration. In such cases the applicability of section 52(1) or 52(2) of the Income-tax Act from the angle of capital gains and deemed gift under section 4(1)(a) of the Gift-tax Act has to be examined. In this connection, Board's Instruction No.969 dated 2.7.1976 may be referred to. (ii) Income-tax assessees having substantial wealth not being assessed to Wealth-tax. In spite of the fact that the income-tax records indicate that the assessees have substantial wealth exceeding the taxable limit such as capital as a partner in a firm, immovable property etc., no wealth-tax proceedings were initiated. (iii) Over-stating the market value of the property as on 1.1.54/1.1.64 by the assesses for the purposes of computation of capital gains. From the market value of the property as returned/assessed in the corresponding wealth-tax assessments or from other date available, it is sometimes apparent that the assesses has over-stated the market value of the property as on 1.1.54/1.1.64 while adopting it as "cost of acquisition" for the purpose of computation of capital gains. In spite of this, the Income-tax Officers accept this value without any verification. (iv) Life interest of a beneficiary in a trust not included in wealth-tax assessments. Though from the Income-tax records it was clear that the assessee had a life interest in a trust as a beneficiary, the value of such interest was not included in his wealth-tax assessments. (v) Reporting the information regarding death of an assessee by the I.T.O. to the Assistant Controller of Estate Duty. Wherever an I.T.O comes to know about the death of an assessee whose estate is likely to exceed Rs.50,000/-, he should pass on the information about the death to the Assistant Controller of Estate Duty together with the addresses of the legal heirs. However, in many cases, this is not done resulting in escapement of estate duty. 3. The instances, quoted above, are only illustrative and not exhaustive. It, is therefore, requested that the assessing officers should be alerted once again to bear in mind such glaring mistakes and avoid the same in future.