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TMI Blog1986 (1) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... cted for Rs. 30,000. The report of the Inspector, however, was not placed before us nor a copy of that report was supplied to the assessee at any stage of the proceedings. However, on the basis of the above two places of evidence, the competent authority had reason to believe that the fair market value of the property exceeded the apparent consideration by more than 15 per cent thereof. He also stated in the reasons recorded by him for initiating the above proceedings that he had further reason to believe that the consideration for the transfer of the property agreed to between the parties had not been truly stated in the instrument of transfer with the object of reduction or evasion of tax liability of the transfer under the Act or facilitating concealment of income or assets of the transferee. 2. The assessee, i.e. the transferee before us, objected to the initiation of the above proceedings vide her letter dt. 9th Nov., 1982. It was submitted by her before the competent authority that she had purchased the property in question bona fide at the prevalent market rate, that it was in the low lying area away from the residential or commercial area of the locality without any appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instruments of transfer with the object of evasion of tax both by the transferor, as well as by the transferee. After taking approval of the Chief Commissioner of U.P. and CIT, Lucknow, he ordered the acquisition of the property. 4. The assessee is now in appeal before us. There were two submissions of the ld. counsel for the assessee in this regard. His first submission was that the assumption of jurisdiction by the competent authority was itself invalid and illegal. In this connection, he pointed out that when the proceedings had been initiated by the competent authority on 8th July, 1982 or even on 29th Sept., 1982, when a notice under s. 269D(1) of the Act was issued to the assessee, he had no worthwhile evidence in his possession which could lead him to believe that the assessee's property had been transferred for an apparent consideration which was less than its fair market value and that the consideration for the transfer as agreed to between the parties had not truly stated in the instruments of transfer with the object of evasion of tax. He argued that the report of the Inspector had not been supplied to the assessee and, therefore, it could not be relied upon by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r transfer as agreed to between the parties has not been truly stated in the instrument of transfer and that such untrue statement of consideration is with the object of facilitating the reduction or evasion of the liability of the transferor or the transferee to pay their respective taxes. The Court observed that the competent authority can initiate proceedings only on fulfilment of the above basic conditions. The competent authority cannot proceed to reach a conclusion that the object was to evade tax from the mere fact that there is some material to indicate that the apparent consideration was less than the fair market value by 15 per cent of such apparent consideration. He must have some material to reach the conclusion that the consideration stated in the instrument of transfer was untrue and such untrue statement was made with the object of evading the tax. The Court also held that the presumption that the consideration stated in the document has not been truly stated with the object of evading the tax is available only at the later stage, when an enquiry is to be concluded and not at the stage of initiation of proceedings. The Court, while relying on the decision of Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion to offer her comments thereon. The mention of the estimated fair market value in form No. 37-G was only for the purpose of stamp duty. This fair market value was fixed as we were told by the Administrative authority for the purpose of stamp duty. The assessee had no occasion to challenge its fairness and, therefore, reliance on such value as a conclusive proof for initiating the proceedings would not be valid. It is for the Revenue to show that it was in fact the fair market value. The burden for proving the fair market value is on the Department and not on the assessee. There is no evidence on record to show that value was fixed by the Administrative authority even though for the purpose of stamp duty. In any case, it is an estimated value and cannot take place of fair market value. There is also evidence on record to show as mentioned by the Competent Authority himself that the Addl. District Magistrate had fixed the value of the residential plots ranging between Rs. 35 to Rs. 150 per square yard on 21st March, 1980. Of course there must have been some use upto 27th Feb., 1982 when the assessee had purchased her own plot. However, these values do not take into account the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mensions as was the case of the assessee. If we take into account the fact that the assessee was also required to incur considerable expenditure in filling the plot to bring it to the normal level, then we do not think anything unusual about its sale price at Rs. 25 per sq. yard for which it was sold. The Punjab Haryana High Court in the case of Mani Singh Avatar Singh vs. IAC (1984) 41 CTR (P H) 243 : (1985) 151 ITR 233 (P H) has held that all the instances, which are quoted by the parties, as also those which are relied on by the competent authority should be cumulatively taken into account to find out whether the fair market value was more than the apparent consideration. Similar principle was also laid down by Allahabad High Court in CIT vs. Jumramal Sen (1985) 154 ITR 689 (All). 11. Taking all the above facts into account and after going through the various authorities cited at the Bar, some of which have also been referred to in our this order, we are of the considered opinion that the competent authority did not have jurisdiction either to initiate the proceedings for the acquisition of the property in question or to finally acquire it. We, therefore, cancel his order p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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