TMI Blog2010 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... as confirm by Tribunal. Held that- there was no infirmity in the order of Commissioner (Appeals) and Tribunal. But the method adopted by assessing officer is not corret. - 4 of 1992 - - - Dated:- 16-8-2010 - A. K. SIKRI and Ms. REVA KHETRAPAL JJ. Sanjeev Sabharwal for the Commissioner. Prakash Kumar for the assessee. JUDGMENT The judgment of the court was delivered by 1. A. K. Sikri J.-The following two questions are referred by the Tribunal in compliance with the directions of this court contained in orders dated July 8, 1991 under section 256(2) of the Act : "1. Whether the hon'ble Income-tax Appellate Tribunal was right in law in deleting the addition of Rs. 4,20,000 made by the Assessing Officer on account of capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Supreme Court in the case of K.P. Varghese v. ITO [1981] 131 ITR 597. In his opinion, if the Revenue seeks to bring a case within the provisions of section 52(2), it must show that not only the fair market value of the capital asset exceeded the full value of consideration, but also that the consideration had been understated and that the assessee had actually received more than what had been declared by him. The Commissioner of Income-tax (Appeals) also referring to the decision of the Delhi High Court in the case of Addl. CIT v. Mrs. Avtar Mohan Singh [1982] 136 ITR 645, held that there was no scope either in law or on facts to compute the capital gain at Rs. 4,20,000 on the transfer of capital shares instead of Rs. 35,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of valuation under the Wealth-tax Act. However, when the situation like the present is considered where the shares were sold by the assessee to some other persons and the question was as to whether there was any capital gain under section 52 or not, yield or dividend method would have been more appropriate for valuing the shares of a running concern. That apart, as already pointed out above, the Assessing Officer did not record any finding that consideration had been understated and the assessee had actually received more than what had been declared by him in the income-tax return. 8. In view of this fact alone, as per K. P. Varghese [1981] 131 ITR 597, no addition could have been made under section 52 of the Act. 9. We thus answe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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