TMI Blog2003 (7) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... as many as twelve grounds are raised in the appeal, most of which are argumentative and narrative in nature. This is contrary to r. 8 of the ITAT Rules, 1963. The appeal is liable to be dismissed on this ground itself. However, as mentioned earlier, in the interest of justice, we refrain from doing so. 3. The only grievance of the assessee is against the determination of taxable gift at Rs. 25,64,256 under s. 4(1)(a) of the GT Act, 1958 (the Act). 4. During the year under consideration, assessee had transferred certain assets consisting of plant and machinery and freehold land for a consideration of Rs. 76,35,000 and Rs. 32,00,000, respectively, to M/s Wipro Ltd. Capital gains arising from these transactions were duly offered for taxat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VO. On the other hand, he found infirmity with the valuation made by the assessee s valuer. The action of the AO in applying the provisions of s. 4(1)(a) was upheld by the CGT(A). 7. The learned counsel for the assessee made detailed submissions before us and relied on a number of decisions in support of the submissions. His foremost objection was against invoking the provisions of s. 16 of the Act. It was contended that s. 16 could be invoked only when the AO had reasons to believe that taxable gift had escaped assessment. In the light of the facts of the present case, therefore, the AO should have first come to the conclusion that assets were sold for inadequate consideration. Having come to this conclusion, thereafter only the matter c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard consisted of Government directors, the transaction approved by such a board could not be doubted, particularly where the only ground was the DVO s report to make such assessment. 9. The contention of the learned Departmental Representative was that as there was the concept of deemed gift, there was no concept of capital gain and hence, the fact that capital gains as computed by the assessee were accepted by the Department, was not relevant. Further, according to the learned Departmental Representative, it was not material even if the transaction was at arm s length for the purposes of s. 4(1)(a) of the Act. It was submitted that DVO s report could be the basis for invoking s. 16 of the Act. With regard to the year of taxability, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 as against DVO s valuation of Rs. 1,34,04,256. The difference between the two is certainly not so much, which may raise one s eyebrows. The valuation made by the DVO may not be wholly incorrect. After all, he too is an expert. But then, while striking a deal like the one in the present case, there may have been many factors, which may have influenced the parties to arrive at a particular agreement. This may result into some pluses and minuses. Under such circumstances to term the consideration as inadequate is far from being reasonable. It also cannot be gainsaid (sic) that the assessee should have sold the assets at the price determined by the DVO. In a deal of over a crore of rupees, variation of a few lakhs is not unreasonable and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held that existence of inadequate consideration is a condition precedent for applying s. 4(1)(a). If the consideration which passed between the parties can be considered to be reasonable or fair, it cannot be considered inadequate. Therefore, considering the difference between the DVO s valuation and the actual consideration together with the circumstances described above, we are of the view that the consideration was not inadequate and hence s. 4(1)(a) was not applicable. 16. Since we are allowing the assessee s appeal on the above grounds, we do not deem it necessary to deal with the arguments of the learned counsel regarding the applicability of s. 45(c) and the argument that capital gains as offered by the assessee were accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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