COMMISSIONER OF INCOME TAX Vs. KANTI KUMAR SHARMA

JUDGEMENT

(1.) THE assessee sold land measuring 379 sq. yards for Rs. 32,000 during the accounting year relevant to the assessment year 1975 -76. The Income Tax Officer considered that the rate at which the land was sold was low and in view of the provisions of Section 52(2) of the Income Tax Act, 1961 (hereinafter called the "Act"), and some data before him added Rs. 63,388 as capital gain. On the assessee's appeal, the Appellate Assistant Commissioner came to the conclusion that the Income Tax Officer had not arrived at a finding that the sale price had been understated with a view to reduce the tax liability before applying the provisions contained in Section 52(2) of the Act and relied upon Addl. CIT v. : [1978]112ITR1012(Mad) . In this view of the matter, the assessment was set aside with a direction to the Income Tax Officer to follow the procedure for invoking the provisions of Section 52(2) of the Act. At the same time, the Income Tax Officer was allowed to collect more material to arrive at a finding as to whether the transaction had been understated with a view to reduce the tax liability. Against the order of the Appellate Assistant Commissioner, the assessee went up in appeal before the Income Tax Appellate Tribunal, and a prayer was made that after setting aside the order of the Income Tax Officer, the matter should not have been remanded for a fresh decision and in any case permission should not have been granted for collecting fresh material. The Tribunal refused to set aside the remand order, but acceded to the assessee's prayer for not permitting the Income Tax Officer to collect further material. Against the aforesaid order, the Revenue has got the following question referred to this court for opinion :

(2.) KEEPING in view the decisions in P.S. Kuppuswamy's case : [1978]112ITR1012(Mad) of the Madras High Court and K.P. Varghese v. : [1981]131ITR597(SC) of the Supreme Court, we are of the view that the provisions of Section 52(2) of the Act can be invoked only where the consideration for the transfer of a capital asset has been understated by the assessee, or, in other words, the full value of the consideration in respect of the transfer is shown at a lessor figure than that actually received by the assessee, and the burden of proving such understatement or concealment is on the Revenue. The understatement of not showing the full value of the consideration would be with a view to reduce the tax liability. Therefore, before invoking the provisions of Section 52(2) of the Act, the Income Tax Officer should have material before him because the onus is on the Revenue on which he has to record a finding. Since the Income Tax Officer invoked the provisions of Section 52(2) of the Act, he would be having material before him and on the peculiar facts of this case, no jurisdiction has been shown by the Revenue for a further opportunity to collect facts and material. Even in the order of the Appellate Assistant Commissioner, no foundation was laid for such permission.