COMMISSIONER OF INCOME-TAX Vs. PHOOLMATI DEVI

JUDGEMENT

(1.) This appeal under Section 269H has been filed by the Commissioner of Income-tax against the judgment of the Income-tax Appellate Tribunal, Allahabad Bench. The dispute is in respect of house No. D-48/136, Misri Pokhra, Varanasi. This property belonged to Smt. Kumud Kumari, resident of Deleep Nagar, Deoria. She sold it to Smt. Phoolmati Devi, respondent No. 1, and her son, Jagdish Mohan. At the time of the execution of the sale deed, admittedly, Jagdish Mohan was a minor.

(2.) After receipt of Form No. 37G in respect of transfer of the aforesaid property, inquiry was made regarding its fair market value through an inspector of the I.T. Dept. The inspector estimated the market value on the relevant date to be Rs. 80,000 which was much higher than the purchase price of Rs. 45,000. On receipt of the report, proceedings for acquisition were initiated by issue of notices and by publication in Official Gazette. The notice was issued on December 5, 1973, and the same was published in the Official Gazette on December 22, 1973. A reply to the notice was filed by Smt. Phoolmati Devi alleging that the purchase price value of the house was correct and that the proceedings of acquisition could not be lawfully initiated against it. On 31st October, 1975, the IAC, Acquisition Range, Lucknow, held that the fair market value of the house on the date of sale was Rs. 73,198 as he found that the difference between apparent consideration of Rs. 45,000 and the fair market value was about 60%. He held that the agreed consideration for transfer had not been truly stated in the instrument of transfer with the following objects :

(3.) On the aforesaid findings, he ordered for the acquisition of the property under Chap. XX-A of the I.T. Act. Being aggrieved by this order Smt. Phoolmati Devi, the respondent, preferred an appeal before the Income-tax Appellate Tribunal, Allahabad.