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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 ..... 4. 673 11-2-1980 10 Dhurs Rs. 49,000 The Competent Authority referred 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o down nearer to the cost declared in the sale deeds. Apart from the above submission already made before the ld. lower authorities, the ld. Counsel for the assessee reiterated the illegality of the proceedings initiated by the IAC (Acq.) in this case. He contended, there were no material before the Competent Authority to show that something more than the stated consideration in the document had passed between the transacting parties. There was no presumption in law to asume that something more than apparent consideration as shown in the deed had passed between 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 ratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el if property interpreted it would be seen that those decisions were only based on the legal interpretation but also on fact. According to the ld. DR Mr. R.B., sukla, if the suggestion of the id counsel is accepted it would be different for the Department to proceed with acquisition except on concrete proof of understatement. He was of the opinion to overcome such difficulty legislature in its wisdom provided where understatement had to be presumed. He drew out attention to sub-s (2) of cl. (a) (b) which reads as under; (a) where the fair market value of 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority validly initiated proceeding in this case. To elucidate the matter we should refer the entire section of 269C; 269C.Immovable property in respect of which proceedings for acquisition may be taken (1) Where the competent authority has reason to believe that any immovable property of a fair market value exceeding (one hundred thousand rupees) has been transferred by person (hereafter in this chapter referred to as the transferor) to another person (hereafter in this chapter referred to as the transferee) for an apparent consideration which is less than the 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een given in this section itself i.e. sub s. (2) There are two types of understatement which had been envisaged by the section One is consideration understated by less than 25per cent and another by more than 25per cent. If it is less than 25per cent the onus is on the competent authority to prove that consideration had not been truly stated in the deed. On the other hand if the consideration is understated by more than 25per cent from the fair market value the onus is on the parties claiming that the consideration had been truly stated in the deed. As the decision whether 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 comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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