COMMISSIONER OF INCOME TAX Vs. OCHHAVLAL LALJIBHAI DHARIA

JUDGEMENT

(1.) WHAT is the width, scope and purport of S. 269F(9) of the IT Act, 1961 (hereinafter referred to as "the said Act"), which excludes the evidence of an agreement to sell property other than that registered under the Registration Act, 1908, as inadmissible for purposes of rebutting the presumption of untrue statement of consideration raised under S. 269C(2)(a) of the said Act, is a short but interesting question arising in this appeal. The question arises in the following circumstances :

(2.) JAIDIP Sinhji Chauhan, who was a ruler of the erstwhile State of Devgadh Baria in Panchmahals District (hereinafter known as "the transferor"), entered into an agreement on 7th March, 1968, to sell an open plot of land admeasuring 4,048 sq. mts. bearing No. 663, situate in the town of Devgadh Baria to one Dharia Ochhavlal Laljibhai (hereinafter known as "the transferee") for a consideration of Rs. 25,000 at the rate of Rs. 6.25 per sq. yard. This plot of land formed part of the parcel of land of S.No. 458. A sum of Rs. 251 was paid by way of earnest money by the transferee to the transferor. It appears that there was some dispute about the title of the transferor which was ultimately resolved in about the year 1972. A deed of conveyance was accordingly executed by the transferor in favour of the transferee on 17th Sept., 1973.

(3.) THE transferor did not file any objections while the transferee filed his objections on 3rd April, 1974. The transferee, inter alia, contended that since he had agreed to purchase the plot in question under an agreement of 7th March, 1968, he was legally bound to purchase the said property at the rate agreed upon by and between the parties, and, therefore, the apparent consideration stated accordingly in the instrument of transfer was truly and correctly stated, and since that was the only price for the said property at the date of the transfer, no presumption could arise that the apparent consideration has not been stated truly or correctly, and, in any case, there was no ulterior motive of either concealment of income or tax evasion which would render the property liable to be acquired by the Government. In any case, it was contended that the transferee himself has sold the plots of land bearing plot Nos. 664 and 666 adjoining the plot under acquisition at the rate of Rs. 3 per sq. mtr. only and, therefore, there was no understatement as to the consideration.