TMI Blog1991 (8) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... st etc. in the aforesaid property in favour of M/s Ramesh Apartments (P.) Ltd. by Release Deed dated20-11-1978. Release deed was, however, not registered. In return, the aforesaid company paid shares of the face value of Rs. 10,000 each to the co-owners and a sum of Rs. 2,75,000 each was shown as a loan payable to the co-owners in the balance-sheet of the aforesaid company. Thus, a consideration of Rs. 8,55,000 in all was paid for the Release Deed. 3. The Assessing Officer held that the Release Deed had resulted in a transfer of the property in question which gave rise to capital gains. He further held that the property in question was transferred at less than the market value. He called for the report of the Departmental Valuation Officer and ultimately held the value of 1/3rd share of the property at Rs. 4,50,467 as against the value shown in the books at Rs. 2,85,000 (Rs. 10,000 representing the face value of shares and Rs. 2,75,000 representing the amount of loan). After allowing the cost of acquisition as on 1-1-1964 at Rs. 80,000 and after allowing deduction under section 80-T of the Act at Rs. 96,366, he computed the capital gains at Rs. 2,74,101 in the hands of each of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to section 12B of the Indian Income-tax Act, 1922 where the transfer was by three modes, namely, sale, exchange, or transfer. According to him, however, the principle remained the same even in respect of the 1961 Act where the definition was inclusive and an enlarged one. The Learned Counsel for the assessee relied on the decision of the Delhi High Court in Mercury General Corpn. (P.) Ltd.'s case where the Delhi High Court had held that even for the purpose of relinquishment of interest in property there was as much necessity for a registered document as there was for the completion of a valid sale. Reliance was also placed on the Delhi High Court decision in CIT v. Meatles Ltd. [1972] 84 ITR 37, in which the term 'sale' was explained. It was also submitted that the definition of 'transfer in relation to capital asset' contained in section 2(47) of the Act was enlarged by insertion of Sub-clauses (v) (vi) and Explanation, of the said section by the Finance Act, 1987 w.e.f. 1-4-1988. The thrust of the argument was that if a transaction involving the allowing of possession of the immovable property to be taken or retained in part performance of a contract of the nature referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Shri Syali was that the admitted consideration that had passed in this transaction was Rs. 8,55,000, 1/3rd of which came to Rs. 2,85,000. Relying on the Supreme Court decision in K.P. Varghese v. ITO [1981] 131 ITR 597, it was submitted that sub-section (2) of section 52 of the Act could be invoked only where the consideration for the transfer of a capital asset had been understated by the assessee or, in other words, the full value of the consideration in respect of the transfer was shown at a lesser figure than that actually received by the assessee and the burden of proving such understatement or concealment was on revenue. Reliance was also placed on the Supreme Court case in CIT v. Shivakami Co. (P.) Ltd. [1986] 159 ITR 71 for the proposition that unless there is evidence that more than what was stated was received no higher price can be taken to be the basis for computation of capital gains. Relying on these two authorities aforesaid, the learned Counsel for the assessee submitted that simply because according to the Departmental Valuation Officer, the market value of the property in question was more than what was decided upon, sub-section (2) of section 52 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Venkataramiah and Meatles Ltd. were under the old Act whereas section 2(47) of the 1961 Act had enlarged the definition of "Transfer". It was again emphasised that the facts contained in the case of Mercury General Corpn. (P.) Ltd. were altogether different. It was emphasised again and again that the property in question had definitely been transferred by the assessees to the aforesaid company and that the non-registration of the Release Deed did not take any difference. According to her, capital gains was exigible. 9. As regards the non-applicability of section 52(2) of the Act, it was submited that this point was raised by the learned Counsel for the assessee before the CIT (Appeals) who had not dealt with the same. According to her, this matter could go back to the first appellate authority for consideration and disposal at his end. 10. We have carefully considered the rival submissions as also the facts on record. This is common ground that the Release Deed dated20-11-1978was not registered. The Delhi High Court in the case of Mercury General Corpn. (P.) Ltd. has clearly held that even for purposes of relinquishment of interest in property there was as much necessity for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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