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TMI Blog1991 (5) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... O, for reasons discussed in detail in his order, took the view that this amounted to a gift by the assessee, as the value of the assets was under-stated by Rs. 1,56,000 minus Rs. 82,000 = Rs. 74,000. He, therefore, charged the amount of Rs. 69,000, after giving the basic allowance of Rs. 5,000 to gift-tax. 2. When the matter went in appeal to the DCGT(A), he confirmed the view taken by the GTO after discussing and taking into account the arguments which were advanced before him. Hence the present appeal before us. 3. Although Shri Ranka conceded that in view of the decision of thehon'ble Supreme Court in the case of Sunil Siddharthbhai v. CIT [1985] 156 ITR 509 this amounted to a transfer, yet it was not without consideration and hence could not be treated as gift. He submitted that the view taken by the different Benches of the Tribunal was that the provisions of section 4(1)(a)(ii) of the GT Act could be invoked only when there was inadequate consideration and that too if it was so inadequate as to shock the conscience of the Court. He submitted that in the case of GTO v. Shri H.H. Gaj Singh [1986] 26 17J (Jp.) 503 Tribunal in similar circumstances the capital contribution wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation date was Dewali 1975, i.e. 3-11-1975 the WTO himself had taken the value of these plots at Rs. 1,26,000. Hence, if at all this transaction has to be subjected to gift-tax, the value of the plots should be taken at Rs. 1,26,000 which is nearer the date of transfer, i.e., 9-2-1976. 4. The ld. counsel further argued that the provisions of section 4 of the Gift-tax Act were not applicable in this case because it was a bona fide act. He submitted that there was no finding in the assessment order that the contribution was with mala fide intention. On the other hand, the assessee had given reasons in partnership deed why he was making this contribution and they were his ill-health and impending Land Ceiling Laws etc. He further submitted that in the case of the firm the first appellate authority had upheld the view that a genuine firm had come into existence and hence it indicated that it was a bona fide transaction. He argued that as per the decisions of the Hon'ble Rajasthan High Court in the case of Smt. Vidyavati DeviRathi [1988] 169 ITR 708 and CGT v. Sah Roop Narain [1988] 169 ITR 794 the burden was on the revenue to prove that it was not a bona fide transfer. 5. The ld. c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,26,000 and hence, according to the ld. Sr. Departmental Representative, the provisions of section 15(6) of the Gift-tax Act do not come in the way. 7. Regarding the claim that the transaction was bona fide, he argued that Their Lordships of the Hon'ble Supreme Court had held in Sunil Sidharthbhai's case that the GTO could go behind the face of a transaction and in any case for purposes of section 4(1)(a) of the GT Act the GTO was not required to establish lack of bona fides of the assessee. It is only under section 4(1)(c) that it is required and as already argued, when assessee admitted the value of these plots at Rs. 1,26,000 on Dewali 1975, it could not be said that the assessee had a bona fide belief that as late as on 9-2-1976 its value would be only Rs. 82,000. 8. The ld. counsel for the assessee replied that in the first instance it was not correct that these plots of land were stock-in-trade because, according to him, when a new firm is constituted, whatever contribution is made, is capital contribution and this may be read from the partnership dead. 9. He further submitted that the use of the word " may " in section 15(6) of the GT Act was in such a way that it had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty transferred by way of gift-tax. (a) in a case where the value of the property as returned is in accordance with the estimate made by a registered valuer, if the Gift-tax Officer is of opinion that the value so returned is less than its fair market value ; (b) in any other case, if the Gift-tax Officer is of opinion---- (i) that the fair market value of the property exceeds the value of the property as returned by more than such percentage of the value of the property as returned or by more than such amount as may be prescribed in this behalf ; or (ii) that having regard to the nature of the property, and other relevant circumstances, it is necessary so to do ; and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23,sub-section (5) of section 24, section 34-AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Wealth-tax Officer under sub-section (1) of section 16-A of that Act. Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation on his own." It is obvious that the Gift-tax Officer has not followed these instructions and hence, as stated by us earlier, the legal presumption would be that the report of the Valuation Officer giving the value of the plots, at Rs. 82,000 became binding on him. So far as the question of assessee having accepted the valuation of those plots at Rs. 1,26,000 as on Dewali 1975 and Rs. 1,56,000 as on Dewali 1976 is concerned, in our opinion, there can be many reasons or considerations with the assessee for not having agitated this issue in the wealth-tax assessments. However, in any case, in view of the clear instructions from the Board and clear provisions of section 15(6) of the Gif-Tax Act, that part of the conduct of the assessee cannot nullify the requirements of law nor can it empower the GTO to ignore the provisions of law and the instructions of the Board thereon. From all these discussions it is clear that in the first instance the valuation reports given in the wealth-tax assessments as far back as on 31-10-1976 cannot authorise the GTO to ignore the specific provisions of section 15(6) of the GT Act and the instructions of the Board thereon and cannot authorise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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