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TMI Blog1986 (12) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred the valuation of the property to the Valuation Cell of the Department. The report of the Valuation Officer was given in the following manner: "Annexure No. 1 The valuation of the property of Shri Dilip Kumar Arora, S/o Shri Pranath R/o. Dak Bunglow Road, P.S. Kotwali, P.O. G.P.O., Distt. Patna bearing holding No. 36-30, Ward No. 1, Circle No. 6, Sheet No. 2, Plot No. 58(P), Touzi No. 205 (Pata collectorate) Road. Known as off Frazer Road, (Mazharul Haque Path.) Valuation as on 16th Sept., 1982 1. The cost of the structure : Khapra Poash with 9'-6'' Av. Ht. 30-0X1 6'0'=480.00 s ft. = 44.59 Sq.m @ Rs. 427.52 Per. S.qm. Rs. 19,063 2. Compound Wall of ht. 6'-9' 59.22 Mtr. @ Rs. 236.30 per R. Mtr. Rs. 13,994 Rs. 33,057 3. No water supply and electricity . 4. Less for depreciation of 27 years passed. 9/10X27/30X Rs. 33,057= Rs. 26,776 (--) Rs. 26,776 5. Depreciated value of the structure. Rs. 6,281 6. Cost of land of area 6759 S. ft. =Rs. 4,965 Kathas Rs. 1,59,919 (a) 1st belt -- 3.173 Katha @ Rs. 50,400 per katha (b) 2nd belt -- 1.792 Katha @ 2/3 of Rs. 50,400 per Katha Rs. 60,211 Total Rs. 2,26,411 (Since the partition amongst the transferees not yet done, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the transacting parties. The burden of showing that there was understatement of the consideration was on the Revenue and not on the assessee as held by the Supreme Court in the case of K.P. Verghese vs. ITO (1981) 24 CTR (SC) 358 : (1981) 131 ITR 597 at 615 (SC). The ld. Counsel for the assessee further argued that in the case of Mathew M. Thomas vs. IAC (1982) 1 ITD 115 (Coch) : 1 SOT 529 (Coch) the Tribunal had held that the above Supreme Court decision had relevance in respect of provisions of s. 269C especially claimed. (a) and (b) of sub-s(1).He urged, it was necessary for the competent authority to form belief on rational, relevant and congent material that the transferor had an object of reducing or evading the tax on the income arising from the transaction in question. In order to entertain this belief there must be some material before the competent authority which would indicate that the consideration received by the transfer is more, in fact, than the consideration stated in the document. Without evidence to this effect claimed by the ld. counsel of the assessee, there would be no basis, in fact, for belief that the transferer entertained an object of tax evasion Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such property exceed the apparent consideration therefor by more than twenty five percent of such apparent consideration, it shall be conclusive proof that the consideration for such transfer as agreed to between the parties had not been truly stated in the instrument of transfer; (b) where the property has been transferred for an apparent consideration which is less its fair market value, it shall be presumed, unless the contrary is proved that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument for transfer with such object as is referred to in cl. (a) or cl. (b) of section (1) According to him the said clauses are available to the competent authorities even for the initiation of the proceedings. He was of the opinion that if the presumption was not available at the time for the initiation, there was no reason to enquire at the time of acquisition. In other words, these sections, would be of no use if the decisions cited by the ld counsel for the assessee are followed literally. According to the ld. DR, the general object of the legislature was to acquire these properties where consideration had not been truly stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fair market value of the property and that the consideration for such transfer as agree to between the parties has not been truly stated in the instrument of transfer with the object of (a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer; or (b) facilitating the concealment of any income or any money or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian ITA, 1922 11 of (1922) or this Act or the Wealth tax Act 1957 (27of 1957) the competent authority may subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter; Provided that before initiating such proceedings the competent authority shall record his reasons for doing so provided further that no such proceedings shall be initiated unless the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration therefor by more than fifteen percent of such apparent consideration (2) In any proceedings under this Chapter in respect of any immovable propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the consideration and been truly stated to be considered by competent authority at the time of initiation of the proceeding it is not understand able why he cannot take resort to sub s. (2) (b) to presume that he consideration was not truly stated where it was less than 25 per cent of the market value However even if we agree with the submissions to the DR we do not find that competent authority was justified in initiating proceedings in this case as the market value of the property was not more than 25 per cent as stated in the transfer deed. For that reason, subs s (2) claimed. (b) was not available to the competent authority to initiate proceedings. We find the Valuation Cell Officer had estimated the value of the entire property at Rs. 2,26,411 as against apparent consideration mentioned in the transfer deed of Rs. 1,96,000 The ld. Competent authority however, had preferred the valuation made by the Inspector to initiate proceedings. The valuation made by the Valuation Cell is to be taken as opinion of expert. The ld. Competent authority has not given any congent reason of not following the report of the Valuation Cell and we also do not find anything in the report of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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