COMMISSIONER OF GIFT TAX Vs. D BASKARA REDDY

JUDGEMENT

(1.) AT the instance of the Department, the Tribunal referred the following common question, for the opinion of this court for the assessment years 1970-71 and 1971-72 in the case of three different assessees, under section 26(1) of the Gift-tax Act, 1958 :

(2.) THE three assessees, viz., Sarvasri D. Baskara Reddy, D. V. Sivaprasada Reddy and D. Sudhakara Reddy, had, respectively, 1/16, 1/4 and 1/16 shares in the property at No. 5, Nungambakkam High Road, Madras. Half of the property was sold for Rs. 3,50,000 on March 30, 1970 and the other half for Rs. 3,50,000 on March 11, 1971, to D. S. Reddy and Co. Pvt. Ltd. THE Income-tax Officer got the property valued by the valuation cell, which fixed the value at Rs. 5,00,200 for the first sale and Rs. 5,54,100 for the second sale. In the view that the vendee consisted of the assessees relatives, the Income-tax Officer invoked section 52 for bringing to capital gains the difference between the market value and the stated consideration and also made the assessments of the difference as a deemed gift under section 4(1)(a) of the Gift-tax Act, for the two years, representing the respective assessee's share.