COMMISSIONER OF INCOME TAX Vs. VENKATARAMAN A

JUDGEMENT

(1.) IN these two groups of tax cases, three points arise for consideration under the I.T. Act, 1961. One group, viz., T. C. Nos. 300 to 302 of 1977, relates to A. Venkataraman. The questions of law referred to us by the Tribunal in this group are as follows

(2.) THE other group of cases comprised in T. C. Nos. 423 to 425 of 1977, relate to Ramana Balaji. The Tribunal has referred to us the following three questions of law in these cases.

(3.) THE Tribunal, on appeal, held that s. 52(2) does not enable the ITO to disregard the reality of the consideration for the transfer of a capital asset merely on the score that it is less than what the ITO regards as the fair market value of the property on the date of sale. According to the Tribunal, s. 52(2) can be invoked only in cases where there is a clear understatement of the sale price in the document, that is to say, where the assessee receives, in reality, more than what the document, of conveyance shows. This position is now settled beyond doubt by decision of the Supreme Court in K. P. Varghese v. ITO. We, therefore, answer the first question of law in both these groups of references in favour of the assessees, and against the department.