TMI Blog1998 (11) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... issued on April 7, 1994, for the assessment year 1992-93. Thus the notice has been issued within four years from the end of the relevant assessment year. The notice under section 148 has been issued on the basis that the Assessing Officer has received a report from the Valuation Officer regarding the value of the Soya Unit which had been sold to S. M. Dyechem Limited, Bombay. The unit was transferred for a total consideration of Rs. 9,65,00,000 that is for capital assets as well as current assets. The assessee has filed the return for the assessment year 1992-93 on December 23, 1992. Along with the said return, the assessee has filed the audit report of profit and loss account, the balance-sheet for the financial year ended on March 31, 1992, and also the reports under sections 44AB, 80HH and 80HHC of the Act. After considering all the relevant materials produced before respondent No. 1, respondent No. 1 completed the assessment under section 143(3) of the Act on March 30, 1995, and computed the total income of the petitioner at Rs. 22,28,43,640. The Assessing Officer has also referred to the transaction of Soya Unit which was sold by the petitioner. Though the book value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned counsel for the Department, Mr. Mullick, submits that notice under section 148 has been issued on the basis of the material on record and whether there was an escapement of income or not and how much income has escaped from the assessment, that cannot be decided at the notice stage ; that can be decided only after issue of notice. Therefore, at the notice stage the court should not interfere only on the ground that the Department has not proved how much income has been escaped. He placed reliance on the decision of the apex court in ITO v. Selected Dalurband and Coal Co. Pvt. Ltd. [1996] 217 ITR 597 ; Brooke Bond Lipton India Ltd. v. CIT [1996] 222 ITR 540 (Cal) and Rattan Gupta v. Union of India [1998] 234 ITR 220 (Delhi). He also referred to the background of this case which is stated in paragraphs 6 and 9 of the affidavit-in-opposition. He further submits that there is alternate remedy in case the petitioner has any grievance after the reassessment, he can file appeal and take all these grounds before the appellate authority. In counter, Dr. Pal, learned counsel for the petitioner, placed reliance on Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC) ; Indian Oil C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made. Therefore, the apex court has taken the view that the notice under section 148 was valid. In the case in hand the dispute is whether the capital gain has correctly been shown by the assessee in his return for the assessment year 1992-93 after completion of the assessment. The Assessing Officer received the valuation report which shows higher value of the assets transferred than the value disclosed. Can that be taken as reason for notice under section 148 of the Act ? For capital gains tax before 1988 there was a section 52(2) which reads as under : "52.(2) Without prejudice to the provisions of sub-section (1), if in the opinion of the Income-tax Officer 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 Inspecting Assistant Commissioner, be taken to be its fair market value on the date of its transfer." This section has been omitted w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir market value of the capital asset represents the actual consideration received by the assessee as against the consideration untruly declared or disclosed by him. This approach in the construction of sub-section (2) falls in line with the scheme of the provisions relating to tax on capital gains. It may be noted that section 52 is not a charging section but is a computation section. It has to be read along with section 48 which provides the mode of computation and under which the starting point of computation is 'the full value of the consideration received or accruing'. What in fact never accrued or was never received cannot be computed as capital gains under section 48. Therefore, sub-section (2) cannot be construed as bringing within the computation of capital gains an amount which, by no stretch of imagination, can be said to have accrued to the assessee or been received by him and it must be confined to cases where the actual consideration received for the transfer is understated and since in such cases it is very difficult, if not impossible, to determine and prove the exact quantum of the suppressed consideration, sub-section (2) provides the statutory measure for determin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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