PUSHPALATA Vs. INSPECTING ASSISTANT COMMISSIONER

JUDGEMENT

(1.) THE appellant, Smt. Pushpalata, along with one Smt. Kamlesh jointly purchased from one Dr Raghunath Saran house No. D-61/62-C, Sidhgiri Bagh, Varanasi, on November 9, 1973, for a sum of Rs. 49,500. THE IAC, Acquisition Range, Lucknow, on receipt of intimation in Form No. 37G, obtained a report from the Inspector and being of the view that it was a case for initiation of proceedings under Chap. XXA of the I.T. Act (hereinafter referred to as "the Act") for acquisition, initiated these proceedings. THE requisite notice was published in the Govt. of India Gazette, and copies of the same were served on the transferor and the transferees aforesaid. THE question of valuation of the properties aforesaid was referred by the IAC to the valuation officer, who, adopting the land and building method and submitted a report that the fair market value of the house aforesaid was Rs. 71,600. THE vendees aforesaid riled their reply contesting the fair market value determined by the valuation officer and also produced a report in regard to the fair market value of the said house of an approved valuer indicating that the fair market value of, the house was Rs. 57,358. THE case of the vendees further was that after purchasing the house they had got certain renovations done therein at a cost of Rs. 14,000. THE IAC accepted the report of the valuation officer that the fair market value of the house was Rs. 71,600. In regard to the claim of the vendees about renovation having been done in the house after having purchased the same, the IAC held that only a sum of Rs. 8,000 was proved to have been spent by the vendees on the renova tions. Deducting this sum of Rs. 8,000 from Rs. 71,600, he held that the fair market value of the house on the date of sale was Rs. 63,600. He further held that since the difference between the fair market value and the apparent consideration in the sale deed was more than 25 per cent., there was conclusive proof that the consideration for the transfer as agreed to between the parties had not been truly stated in the instrument of transfer. According to him, in this view of the matter, it had to be presumed that the object was to facilitate the reduction or evasion of the liability on the transferor to pay tax under the Act in respect of any income arising from the transfer or to facilitate the concealment of any income or money or other assets which had not been or which ought to have been disclosed by the transferee for the purpose of the I.T. Act or the W.T. Act. THE IAC also held that no evidence, or material had been pro duced by the vendees before him to rebut the aforesaid presumptions. . On these findings he passed an order under Section 269F(6) of the Act directing the acquisition of the house aforesaid with the prior approval of the Commissioner.

(2.) AGGRIEVED by the aforesaid order of the IAC, the vendees preferred two appeals being Appeals Nos. 34 and 35 of 1975-76 before the Income-tax Appellate Tribunal, Allahabad, under Section 269G(1) of the Act. Even though the Tribunal came to the conclusion that the fair market value of the house on the date of sale Was Rs. 68,090 and hot Rs. 71,600 as held by the IAC, it agreed with the IAC that a sum of Rs. 8,000 only had been proved to have been spent by the vendees, to wards the renovation of the house after its purchase. Deducting the sum of Rs. 8,000 from 68,090, the Tribunal held that the fair market value of the house as on the date of transfer came to Rs. 60,090. It further held that since the apparent consideration was Rs. 49,500 and the difference between the fair market value and the apparent consideration was Rs. 14,190, it was more than 25 per cent. and the order of the IAC did not call for any interference. Both the appeals were accordingly dismissed by a common order on May 31, 1976. Against the aforesaid order, Smt. Pushpalata, one of the co-vendees, preferred the present S.A.F.O. under Section 269H of the Act. Another S.A.F.O. being No. 36 of 1976 against the aforesaid order of the Tribunal was preferred by Smt. Kamlesh, the other co-vendee, in this court. S.A.F.O. No. 36 of 1976, filed by Smt. Kamlesh came up for hearing earlier and after hearing the parties was dismissed by a Division Bench of this court on March 24, 1983. The present S.A.F.O. filed by Smt. Pushpalata has now come up for hearing before us.

(3.) HAVING heard counsel for the parties, we are of the opinion that even accepting the submission made by counsel for the appellant as aforesaid, no case has been made out for interference in the present appeal. As seen above, if the difference was not more than 25 per cent., it would not constitute conclusive proof of the facts stated in Section 269C and it would be open to the appellant to prove to the contrary. Both the IAC and the Tribunal have held that the vendees had not given any evidence whatsoever, on the basis of which their case that the house in question was not required to be acquired having been produced by the vendees, even if Clause (b) and not Clause (a) of Section 269C(2) of the Act is held to be applicable, it is of no avail to the vendees inasmuch as they have failed to satisfy the requirements of "unless the contrary is proved". As regards the finding about the fair market value of the IAC including the finding about the amount proved to have been spent towards its renovation, suffice it to say, that the same is a finding of fact and does not call for interference in the present S.A.F.O.