COMMISSIONER OF INCOME TAX Vs. AGNES K C

JUDGEMENT

(1.) THESE petitions filed under Section 256(2) of the Income-tax Act, 1961, relate to the assessment years 1983-84, 1984-85 and 1985-86. The respondents are the legal heirs of an individual assessee. The original assessee purchased land admeasuring 3.73 acres in Fort Cochin in February-March, 1982, for a consideration of Rs. 21.26 lakhs which would work out at the rate of Rs. 5,700 per cent. Out of the above, the assessee sold 1.21 acres in March, 1982. From the remaining portion, 60 cents was sold to two minor daughters of Mohammed Salim Pasha of Bombay under a sale deed dated February 25, 1983, for a consideration of Rs. 8,000 per cent. Another 1.10 acres of land was sold during the year relevant to the assessment year 1984-85 to two minors as well as to Smt. Annamma Abraham for a consideration of Rs. 8,000 per cent. Remaining 82 cents of land was sold during the period relevant for the assessment year 1985-86 to the wife of Mohammed Salim Pasha at the rate of Rs. 8,000 per cent.

(2.) PURSUANT to a search under Section 132 of the Income-tax Act conducted at the residential premises of Salim Pasha at Bombay as well as his business premises, certain receipts and documents were seized. After elaborate enquiries and taking sworn statements, the Income-tax Officer came to the conclusion that the land was sold at the rate of Rs. 12,951 per cent and not at the rate of Rs. 8,000 as declared by the assessee. The Income-tax Officer assessed the capital gains on the above basis for each assessment year. On appeal, the Commissioner of Income-tax (Appeals) affirmed the above finding. The assessee filed second appeal before the Tribunal. The Tribunal accepted the argument of the assessee that the agreement in English dated March 1, 1983, seized during the search was not meant to be acted upon and higher price was shown therein to facilitate resale for higher value or to get higher compensation if acquired by the corporation. The application filed by the Revenue under Section 256(1) of the Income-tax Act seeking reference of eight questions was rejected by the Tribunal.

(3.) COMMUNICATE a copy of this judgment under the seal of this court and the signature of the Registrar to the Income-tax Appellate Tribunal, Cochin Bench, for information and compliance.