TMI Blog1990 (3) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... section 147 of the Income-tax Act. There is no material or information whatsoever on the basis whereof, respondent No. 2 could entertain any belief as alleged in the said notice. The alleged belief is mere pretence and does not exist and was not held in good faith. It is asserted that the petitioner-firm had fully and truly disclosed all the material and relevant facts necessary for the assessment of its income at the time of the original assessment and that there was no omission or failure on the part of the petitioner to disclose fully and truly all the material and relevant facts and there is no cause of action for the issuance of the impugned notice. The writ petition is contested by the respondents by production of all records and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons have been controverted. It has been disclosed that the letter of right shares issued by the Orient Paper Mills Limited was produced before the Incometax Officer at the time of the original assessment which will show that the partly paid-up shares were ranked pari passu with the fully paid-up shares. The relationship of the parties was also within the knowledge of the Income-tax Officer as would appear from the copy of the assessment order in the case of the assessee-company for the assessment year 1961-62. Learned counsel appearing for the writ petitioner has developed his argument by drawing the attention of the court to the case of K. P. Varghese v. ITO [1981] 131 ITR 597 (SC). It is submitted that the Supreme Court laid down that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in order to save the shares from attachment and sale by the Income-tax Officer for tax arrears, they were transferred at a very low figure. It was held that although the transaction was to defeat the claim of the Revenue, still the consideration had not been understated and as such the proviso to section 12B(2) of old Act corresponding to section 52(1) of the Act could not be invoked. It was held by the Supreme Court that (at p. 76 of 159 ITR) "understatement of value is a misstatement of value. Selling goods at an undervalue to defeat the Revenue is different from understating the value in the document of sale". It is argued with much emphasis that, in view of the law as laid down by the Supreme Court in the above two decisions, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment is very much applicable to the facts and circumstances of the present case and the relief sought by the petitioner may be granted accordingly. Mr. R. C. Prasad, learned counsel appearing for the Revenue, has drawn the attention of the court to the fact that Messrs. Central India Industries Limited is an investment company. The income of the company arises from dividend and interest. For the assessment year 1962-63, the company had shown net capital gains of Rs. 2,46,433 on sale of shares. Capital gains as shown by the assessee was assessed to tax by the Income-tax Officer. Capital gains on sale of 49,077 partly paid ordinary shares of the Orient Paper Mills Limited relating to short-term capital asset was sold by the company on D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 7,80,324 by applying the provisions of section 52 and instead he included in the total income only the capital gains of Rs. 1,96,308 as shown by the assessee-company. Mr. Prasad has also drawn the attention of the court to the case reported in 67 ITR 117 (sic). Having heard learned counsel appearing for the respective parties and going through the materials on record, this court is of the view that the writ court will not sit in appeal over each order of the statutory authority unless the impugned orders are perverse in nature causing manifest injustice. The writ court will interfere where the acts done and/or caused to have been done are without jurisdiction or in excess of jurisdiction. In recent judgment in State of U. P. v. Maharaj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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