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TMI Blog1985 (7) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... red to register with the competent authority on 6th Sept., 1982. Copy of the agreement between the transferees and the transferor Mrs. Naina Joges Bhar is at page 2 to 5. The assessee's reply dt 23rd Dec., 1982 to the IAC (Acq) letter dt 13th Oct., 1982 is at pages six and seven which indicates that the purchase price was available to the transferees by way of foreign remittance. Two of the joint owners, it appears, are non-resident Indian citizens. The question of valuation of the property has been referred by the IAC (Acq.) to the Valuation Officer. At page eight, the assessee's letter dt. 30th Dec., 1982, addressed to the Valuation Officer wherein reference has inter alia, been made to the two instances of sale of flat in the same building itself and of the fact that the correct method of working out the fair market value is the land and building method. While the land prices could be collected from the Registrar's office, the construction costs could be worked out on the actual basis. There is then the valuation report of the Valuation Officer at pages forty-five to fifty which has been forwarded by the IAC (Acq) to the transferor as well as transferees vide letter dt. 15th Jan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fair market value by 15% of such apparent consideration. The competent authority must have 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 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 inquiry is to be concluded and not at the stage of initiation of proceedings." Taking us through the report of the Valuation Officer and the detailed objections filed by the transferees there against as will as the reasons recorded by the IAC (Acq). for initiating proceedings under s. 269C Shri Harish submits that the conditions laid down by the Bombay High Court for initiating proceedings under s. 269C are certainly not satisfied in this case. Neither there is any good reason for holding that the transferees have purchased the property at less than 15 per cent of the fair market price nor is there any shisper in the reasons recorded that the alleged untrue statement of consideration is with the object of facilitating the reduction or evasions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sec. 269 has been held to be an administrative power. Thus. the ld. standing counsel submits that it is for the Tribunal to decide whether they would follow the Supreme Court decision in the case of S. Narayanappa & Ors. (1967) 63 ITR 219 (SC) which has been followed by a number of High Courts or the Bombay High Court decision supra where the above Supreme Court decision has not even been noticed. 5. We have carefully considered the rival submissions. It is true that the same expression, i. e. "has reason to believe" has been used in s. 34 (1) (a) of the IT Act, 1922 and s. 147(a) and s. 269C(1) of the IT Act, 1961. It may also be true that if the final conclusion as regards the apparent consideration being less than the fair market value by 15 per cent or more of such apparent consideration and of the fact that the under-statement has been with the object of facilitation the reduction or evasion of the liability of the transferor or the transferee to pay tax under various Acts is to be arrived at before the initiation of the proceedings, the subsequent proceedings after the initiation would be meaningless. However, Bombay High Court having held in so many words in its decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 16th Dec., 1982, the valuer has himself noted that the flat was not ready for occupation and that the flooring and other finishing works were not completed along with water supply, sanitary and electrical fittings. According to the transferees all this has been done over a period of 1-1/2 years at a cost of Rs. 1,45,576. The electric meter was installed in April, 1984 when the flat was occupied by the transferees. Sec. 269AB has been introduced in the IT Act w. e. f. 1st July, 1982. The section provides for registration of transactions in real estate for the first time It had adverse effect on the real estate market which is evident from the article which appeared in the Gujarati paper 'Bombay Samachar' dt. 11th August, 1982. In terms of the article, the prices of the flats have fallen by twenty to thirty per cent. On account of the new provision and for some time there are practically no transactions in real estate. The flat on the second floor of this very building i. e. Prithvi Apartments was sold on 17th Nov., 1982. i. e., after about three months of the sale herein. The built-up area is 2242 sq. ft. The sale price being Rs. 15,69,400, the rate per sq. ft. works out to Rs. 70 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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