TMI Blog2006 (6) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the AO in substituting the full value of the consideration received by the fair market value as stated by the DVO in his report was not in accordance with law. In the circumstances, we hold that there was no capital gain which could be brought to tax in the hands of the assessee. The appeal of the assessee is allowed. In the result, the appeal by the assessee is allowed. - HON'BLE N. V. VASUDEVAN., N. S. SAINI, A.M. For the Appellant : Ashwani Taneja and Ankur Agarwal, Advs. For the Respondent : H.K. Lal, Adv. ORDER N.V. VASUDEVAN, J.M.: 1. This is an appeal by the assessee against the order dt. 8 th Sept., 2002of learned CIT(A)-XIX, New Delhi, relating to the Asst. Yr. 1997-98. 2. The facts and circumstances under which the present appeal arises are as follows. The assessee is an individual. He had filed a return of income declaring an income of Rs. 1,42,730/-. This income 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 Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the full value of consideration received by an assessee on transfer. This was rejected by the learned CIT(A). All other objections regarding valuation of the property was also rejected by the learned CIT(A). The learned CIT(A) thus confirmed the order of the AO, hence the present appeal by the assessee before the Tribunal. 5. We have heard the submissions of the learned counsel for the assessee and the learned Departmental Representative. The primary question that would arise for our consideration would be as to whether the AO was justified in substituting the full value of consideration by the fair market value on the basis of the DVO's report. Sec. 48 of the Act lays down the method of computation of capital gain. It says that from the full value of consideration received on transfer of a capital asset, the expenses incurred in connection with the transfer and the cost of acquisition of the capital asset has to be deducted. From the facts available on record it is clear that the sale consideration as per the registered document was only a sum of Rs. 18 lakhs. There was no material available with the AO to show that the assessee received much more than a sum of Rs. 18 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revious approval of the IAC, be taken to be the fair market value of the capital asset on the date of the transfer. (2) Without prejudice to the provisions of sub-s. (1), if in the opinion 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 concerned with the case of computation of capital gains on sale of shares. The shares were not quoted in the stock exchange. There was no evidence to show that the consideration over and above what vyas stated to have passed between the parties had in fact passed. The questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to assess the capital gain at a higher value than declared by the assessee. The judicial pronouncements referred to above are quite clear and lay down the ratio uniformly. The learned Departmental Representative however filed before us a copy of the decision of the Delhi Bench of the Tribunal in the case of Hanemp Properties Ltd. vs. Asstt. CIT in ITA 3811/Del/2005 wherein the Hon'ble Bench has made the following observations: It would be seen that in the case of C.B. Gautam, the Hon'ble Supreme Court have laid down that in a case where there is significant undervaluation of the immovable property in the apparent consideration disclosed in the agreement that would give rise to a rebuttable presumption of tax evasion and they have held that this proposition is supported by the earlier decision of the Court in the case of K.P. Verghese vs. ITO. On a combined reading of the judgments of the Hon'ble Supreme Court in the case of K.P. Verghese and in the case of C.B. Gautam, it would be seen that the argument that no matter what is the difference between the fair market value of the property and the apparent consideration disclosed by the parties, there ought to be furt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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