TMI Blog2002 (1) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 7,70,000. The said property, being 1/3rd share of the assessee was purchased by him during the financial year 1996-97 for a sum of Rs. 4,50,000. The assessee declared short term capital gain of Rs. 22,146 on the sale transaction. The Assessing Officer felt that the sale consideration shown by the assessee was understated and he, therefore, made a reference to the Valuation Officer by invoking the provisions of section 55A of the Income-tax Act. The Valuation Officer vide his report dated 27th March, 2001, estimated the fair market value of the entire property on the date of its sale at Rs. 39,40,674 in which 1/3rd share of the assessee works out to Rs. 13,13,558 as against Rs. 7,70,000 declared by the assessee. A copy of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer and dismiss the appeal of the assessee. 5. Shri Rakesh Gupta, ld. Counsel for the assessee, assailing the impugned order of the ld. CIT(A) argued that the revenue has reached the finding that consideration shown by the assessee at Rs. 7,70,000 is not the real consideration without bringing on record any evidence in support of the same. According to the ld. Counsel, the onus squarely lay upon the revenue to prove that the consideration shown by the assessee is not the real consideration for the sale of the property. The reliance is placed on the decision of the Supreme Court in CIT v. Godavari Corpn. Ltd. [1993] 200 ITR 567 wherein it has been held that unless there is evidence that more than what was stated was received, no hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose, the assessee has contributed Rs. 3,00,000 towards construction of the said property. This contribution of Rs. 3,00,000 by the assessee have been financed by taking loan from one, Shri Ashok Kumar Kothari. Subsequently, the assessee has decided to sell of his 1/3rd share to the financier, Shri Ashok Kumar Kothari. At this time, 70% construction of the second floor had been completed. When we compare the valuation reports of assessee s valuer and the Government valuer, we find that the difference in the valuation figures are mainly on account of the difference in valuation of land adopted by the two valuers in their respective reports. The Government valuer while determining the fair market value of the entire building at Rs. 39,40,000 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 13,50,000 only. We specifically called upon the ld. DR to indicate whether the investment made by the assessee and the other co-owners in June, 1996 relevant for asst. year 1997-98 has been accepted by the Department or not. The learned DR has been unable to clarify the position and it appears to us that the department has accepted the cost of acquisition of the property in the case of the assessee as well as the co-owners. Significantly, the Departmental Valuer has worked out the fair market value of the property as on 5-6-1996 at Rs. 34,50,000 whereas the assessee and the other two co-owners have shown the purchase consideration of Rs. 13,50,000 only. The Income-tax authorities have after accepting the cost of acquisition as shown by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Although section 52(2) of the IT Act has been omitted from the statute, the fact remains that in case of transfer of assets, it is for the revenue to establish that there has been an understatement of consideration by the assessee and the consideration actually received is more than disclosed before the tax authorities. In the instant case, all that the Department has done in to rely upon the report of the Valuation Officer. A valuation report is only an opinion but that does not show or prove that there is some underhand dealing and consideration have passed more than what is disclosed by the assessee. The sale consideration disclosed by the assessee, supported by documentary evidence like sale deed etc. cannot be disbelieved merely on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord in support of understatement of the sales consideration by the assessee. While sustaining the action of the Assessing Officer, the CIT(A) has observed that if there is understatement of purchase price as well as sale price, the assessee, in such circumstances, can be taxed for undisclosed income either as undisclosed income in purchase or property or undisclosed receipt at the time of sale and the real income is taxed only once. We are unable to endorse the reasoning adopted by the ld. CIT(A). If the assessee has understated the cost of acquisition of the property, the department should have brought to tax the undisclosed investment made in the acquisition of the property. If the assessee understated the sale consider- ation at the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
