COMMISSIONER OF INCOME TAX Vs. SIVAN SOAP FACTORY

JUDGEMENT

(1.) THIS is an appeal under section 269H(1) of the Income-tax Act, 1961 ('the Act') against the order of the Tribunal, Madras 'A' Bench, dated 30-6-1980, made in I.T. (Acquisition) Appeal No. 21 (Mad.) of 1974-75 under section 269G of the Act.

(2.) THE revenue is the appellant herein. THE respondent is Sivan Soap Factory, Madurai. One A. B. Balakrishnan transferred the property in question situated at No. 46B, Chairman Muthuramier Road, Madurai (Factory site and building) under a document, dated 11-12-1972, for a stated consideration of Rs. 1,40,000. THE IAC initiated the proceedings under Chapter XX-A of the Act for the acquisition of the property on the ground that the fair market value of the property sold in favour of the respondent herein was in excess of the stated consideration by more than 15 per cent. After giving notice to the parties and after hearing them, he determined the fair market value of the property as Rs. 2,54,000, and as the stated consideration of Rs. 1,40,000 was much below the fair market value, attracting the provisions of the Chapter referred to above, he proceeded to acquire the property as contemplated by the Act. It is against this order of the said IAC, the owner of the property, who is the transferee, preferred an appeal before the Tribunal. THE Tribunal, by an order, dated 31-7-1975, allowed the appeal and set aside the acquisition proceedings. As against the said order passed by the Tribunal, the department went in appeal before this Court in T.C. No. 88 of 1976. While disposing of this tax case, this Court, by its judgment, dated 27-11-1978, set aside the order of the Tribunal and remanded back the matter to the file of the Tribunal with a direction to dispose of the same in accordance with law and after taking into consideration the direction given by this Court in the abovesaid judgment. Accordingly, Income-tax (Acquisition) Appeal 21 (Mad.) of 1974-75, was remitted back to the file of the Tribunal for fresh disposal. When the appeal came up for hearing, the Tribunal on the basis of a remand report furnished by the competent authority, proceeded to dispose of the appeal on the merits.

(3.) INSOFAR as issue No. 3 is concerned, the Tribunal took the view that inasmuch as it fixed the fair market value at Rs. 1,40,000, this question does not arise. However, for the sake of completeness, the Tribunal answered the third issue in the following manner : "In this case, the department failed to establish that there is conclusive proof to show that the consideration has not been truly stated in the instrument of transfer. The object with which the consideration has not been so stated was also not established. Even if the fair market value exceeds the stated consideration by 25 per cent, the presumption indicated under section 269C(2)(b) is only a rebuttable presumption. In this case, the Tribunal found that the contrary has been proved. The department has no case that there is, in fact, any extra consideration. There is also no case of any other form of tax evasion by the transferor or the transferee. Under such circumstances, on a guess work and by some exercise in estimating the value of the property, the department cannot resort to the proceedings under section 269C of the Act."