TMI Blog1993 (3) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gains arising from the sale of parts of the property known as Binai House, Ajmer, for the assessment years 1974-75 and 1975-76?" The brief facts of the case are that the property known as Binai House was sold for a consideration of Rs. 90,000 to one Shri Ram Lal on conditional sale. The assessee has repurchased the said property on June 20, 1973, for the same consideration of Rs. 90,000 and sold it to different persons. In the assessment year 1974-75, the sales were effected as under: Rs. 1. Dineshchand Agarwal 27-2-1974 32,000 2. Smt. Chikli Devi 27-2-1974 31,000 3. Shri Bajrang Lal 27-2-1974 17,000 4. Gaffarkhan and Sattarkhan 21-6-1973 40,000 The Income-tax Officer observed that the value shown in the sale deed was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Tribunal, Bombay Bench 'D', Camp, Jaipur. It was contended that the Income-tax Officer has not been able to bring any material to show that the consideration shown in the sale deeds was an understatement and simply on the basis of the subsequent sale of the property by the purchaser fetching a higher value it could not be presumed that it was a case of understatement. The Income-tax Appellate Tribunal came to the conclusion that the bona fides of the transaction have not been assailed and the fact that the property has actually been sold by the purchasers for a higher consideration later on could only be the starting point for making an enquiry whether the transactions in question were bona fide or not. Without establishing that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of the transfer exceeds the full value of the consideration declared by the assessee by not less than 15 per cent. of the value so declared, but also that the consideration has been understated and the assessee has actually received more than what is declared by him. There are two distinct conditions which have to be satisfied before sub-section (2) can be invoked by the Revenue and the burden of showing that these two conditions are satisfied rests on the Revenue. It is for the Revenue to show that each of these two conditions is satisfied and the Revenue cannot claim to have discharged this burden which lies upon it, by merely establishing that the fair market value of the capital asset as on the date of the transfer exceeds by 15 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ablish a negative, namely, that he did not receive any consideration beyond that declared by him." It was further observed: "It is, therefore, clear that sub-section (2) cannot be invoked by the Revenue unless there is understatement of the consideration in respect of the transfer and the burden of showing that there is such understatement is on the Revenue. Once it is established by the Revenue that the consideration for the transfer has been understated or, to put it differently, the consideration actually received by the assessee is more than what is declared or disclosed by him, sub-section (2) is immediately attracted, subject of course to the fulfilment of the condition of 15 per cent. or more difference, and the Revenue is then n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which, by no stretch of imagination, can be said to have accrued to the assessee or been received by him and it must be confined to cases where the actual consideration received for the transfer is understated and since in such cases it is very difficult, if not impossible, to determine and prove the exact quantum of the suppressed consideration, sub-section (2) provides the statutory measure for determining the consideration actually received by the assessee and permits the Revenue to take the fair market value of the capital asset as the full value of the consideration received in respect of the transfer." The above decision was again followed by the apex court in CIT v. Shivakami Co. Pvt. Ltd. [1986] 159 ITR 71; [1986] 2 SCC 418, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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