9911796707
TMI Blog1984 (5) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ral agreement to sale was executed and possession was transferred pursuant to that agreement to the purchaser the latter carried out certain constructions. The case is that possession of incomplete house was given under the agreement to sell to the purchaser who carried out constructions after taking possession. The sale was effected for Rs. 1,30,000. The ITO referred the matter to the Valuation Officer who estimated the fair market value of the house as it stood at that time, at Rs. 1,98,350. The cost of incomplete construction, according to the assessee, was Rs. 72,561. Thus the total cost of incomplete construction came to Rs. 77,211 including the acquisition price of plot of land at Rs. 4,650. The difference of the cost of incomplete ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of capital gain tax. He submits that the report of the Valuation Officer is incorrect inasmuch as he valued the properties it stood at the time of inspection. In short, he says that the subject matter of sale was not the property which existed at the time of inspection of the Valuation Officer but only incomplete house was transferred to the purchaser who raised further construction to make the house complete after taking possession from the assessee. So the argument is that the Valuation Officer having valued the property including the subsequent construction that was raised by the purchaser after taking the possession, a serious error has arisen and for that reason the report of the Valuation Officer cannot be relied on at all. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstantial evidence which is very strongly demonstrated in the instant case by the report of the Valuation Officer who estimated the fair market value at Rs. 1,98,350. We do not agree with this argument of the Revenue. What the Hon'ble Supreme Court has said in (1981) 24 CTR (SC) 358: (1981) 131 ITR 597 (SC) in the case of K.P. Varghese vs. ITO is that one of the two conditions to be established by the Revenue is that the consideration has been understated in that the assessee has actually received more than what is declared by him. The Supreme Court clearly said that s. 52(2) cannot be invoked by the Revenue merely by establishing that fair market value exceeded the full value of the consideration by more than 15 per cent. From the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
