9911796707
TMI Blog2006 (6) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... come was nothing but the salary income from the firm M/s Super Chemical Distributors of which he was a partner and interest on capital contributed to the aforesaid firm. The return was accepted under s. 143(1) of the Act. 3. In the course of assessment proceedings under s. 143(3) in the case of Super Chemical Distributors, the AO noticed that there was an addition of Rs. 19,30,000/- to the capital account of the assessee as partner of M/s Super Chemical Distributor as appearing in the books of M/s Super Chemical Distributors. Rs. 18,00,000/- out of the aforesaid addition was explained as contribution out of sale consideration received on sale of plot at Pusa Road. The assessee had sold the aforesaid property, viz., Plot No.6, Site No. 21, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value determined from the DVO. This was also rejected by the AO and he computed the capital gain on sale of the property as follows: Capital gain 1,45,560 Sale consideration being fair market value as per valuer's report as discussed above 28,46,214 Less: Indexed cost of acquisition of the plot 1610000 x 305 22,02,017 223 6,44,197 4. Before the learned CIT(A), the assessee reiterated its claim that no reference could be made to the DVO for estimating the full value of consideration received by an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for consideration. The question before the Government (Court) was as to whether the very asset parted with itself be regarded as consideration for transfer. The Court held as follows: "It is manifest that the consideration for the transfer of capital asset is what the transferor received in lieu of the asset he parts with, namely, money or money's worth and, therefore, the very asset transferred or parted with cannot be the consideration for the transfer. It follows, that the expression 'full consideration' in the main part of s. 12B(2) of Indian IT Act, 1922, cannot be construed as having a reference to the market value of the asset transferred but the expression means only the full value of the thing received by the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the ITO the fair market value of a capital asset transferred by an assessee as on the date of the transfer exceeds the full value of the consideration declared by the assessee in respect of the transfer of such capital asset by an amount of not less than fifteen per cent of the value so declared, the full value of the consideration for such capital asset shall, with the previous approval of the IAC, be taken to be its fair market value on the date of its transfer." The provisions of s. 52 of the IT Act, 1961 existed upto30th March, 1988and was deleted by the Finance Act, 1989 w.e.f.1st April, 1988. The Hon'ble Supreme Court in the case of CIT vs. Shivakami & Co. (P) Ltd. (1986) 52 CTR (SC) 108 : (1986) 159 ITR 71 (SC) was concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any other value other than the apparent consideration for sale. 7. In the case of CIT vs. Godavari Corporation Ltd. (1993) 112 CTR (SC) 310 : (1993) 200 ITR 567 (SC) in the context of s. 52(2) which empowered the AO to substitute fair market value when the full value of consideration received by an assessee on transfer is less than the fair market value by 15 per cent, whether in such circumstances, the AO was empowered to make a reference to the DVO to determine the fair market value and whether a reference made by the AO to the DVO in the absence of any material to show that more consideration was received by the assessee was valid or not came up for consideration. The Court held that in the absence of any material to show that more co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence between the fair market value of the property and the apparent consideration disclosed by the parties, there ought to be further positive evidence of any concealed or suppressed consideration being paid to the transferor by the transferee is not legally tenable. In a case where there is significant undervaluation of the immovable property in the disclosed apparent consideration, there would be a rebuttable presumption of understatement of consideration also. In the instant case according to the Revenue while the fair market value of the property on the material date was Rs. 19,45,300/- and Rs. 28,38,500/-, the assessee claimed to have purchased these two properties for Rs. 1,50,000/- and Rs. 4,50,000/- only. It is not correct proposi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
