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TMI Blog1986 (4) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... He had shown the sale price of the former as Rs. 3 lakhs and of the latter as Rs. 3,15,700 the rates being the same for both, i.e., Rs. 100 per sq. yd. The ITO invoked the provisions of section 52(2) of the Income-tax Act, 1961 and estimated the market value of the former at Rs. 5,40,000 and of the latter at Rs. 7,15,500. Ultimately, the Tribunal held that section 52(2) was not applicable. In the meantime, the GTO levied gift-tax in respect of difference between the value shown by the assessee for both the years and the valuation made by the Valuation Officer. The Commissioner (Appeals) held that section 4(1)(a) could not be invoked because it was held by the Tribunal that section 52(2) was not applicable. This decision was reversed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon the order of the Commissioner (Appeals) and emphasized that the valuation report relied upon was based on a sale instance almost across the road of assessee's plot and the sale was registered on 25-7-1973 at the rate of Rs. 250 per sq. yd. On this basis he argued but for the proviso the transfer to the Government also would have attracted the deeming provisions and so according to him the question of transfer being and outsider or transfer being at arms length did not arise. To this Shri Talati replied by inviting our attention to the provisions of section 52(2) which was in fact similar and even then the supreme Court had said that mere difference in the values was not enough but something more must be seen. 6. The learned dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India;". 8. It can be seen that the crucial words in the section are 'adequate considerations'. If the consideration is not adequate, then to that extent the gift is deemed to have been made by the transferor. It is unnecessary to quote in extend so all the judgments which have been relied upon by the assessee's advocate. On a perusal of these judgments the following legal propositions emerge : (i) For applying the section, reliance cannot be placed merely upon the difference between the payment made and the market price of the property in question. Something more has to be seen. In this respect the parallel drawn by Shri Talati between the proviso here and the proviso to section 52(2) is quite valid and the reliance placed by him on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total strangers and, therefore, there should not be any question of personal factor between the two. In fact the submissions of Mr. Talati that the transaction was between total strangers itself comes in his way on this point. Secondly, the difference between the market price and the price shown by the assessee is very large, i.e., nearly 80 per cent. It must be borne in mind that this figure is arrived at on the basis of a sale instance of Rs. 250 per sq. yd. and the Valuation Officer has taken the market price at only Rs. 180 per sq. yd. So even here there is considerable scaling down in the estimate. So far as bona Fides of the transaction is concerned it cannot be over looked that recording of the sale price at a lower figure generally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -7-1973 and the rate is Rs. 250 per sq. yd. It cannot be said that the location of this land is far away from the assessee's land which has been sold or that the date of the sale is not proximate. Even then the estimate has not been made at Rs. 250 but at the much lower figure of Rs. 180 which the Commissioner (Appeals) has scaled down Rs. 160 for the assessment year 1972-73 and Rs. 190 for the assessment year 1973-74. In our view the fact that the acquisition proceedings had been dropped is not relevant. There may be various considerations in any case we are.concerned with the gift-tax assessment which is a separate matter. Similarly, the fact that the Commissioner (Appeals) order in wealth-tax taking the value of the land at Rs. 100 has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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