COMMISSIONER OF INCOME TAX Vs. RAJA NARENDRA

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, has referred the following question of law arising out of its order dated June 11, 1980, in respect of the assessment years 1974-75 and 1975-76 :

(2.) THE brief facts of the case are that the property known as Binai House was sold for a consideration of Rs. 90,000 to one Shri Ram Lal on conditional sale. THE assessee has repurchased the said property on June 20, 1973, for the same consideration of Rs. 90,000 and sold it to different persons. In the assessment year 1974-75, the sales were effected as under: <FRM>JUDGEMENT_250_ITR210_1994Html1.htm</FRM>

(3.) A second appeal was preferred before the Income-tax Appellate Tribunal, Bombay Bench 'D', Camp, Jaipur. It was contended that the Income-tax Officer has not been able to bring any material to show that the consideration shown in the sale deeds was an understatement and simply on the basis of the subsequent sale of the property by the purchaser fetching a higher value it could not be presumed that it was a case of understatement. The Income-tax Appellate Tribunal came to the conclusion that the bona fides of the transaction have not been assailed and the fact that the property has actually been sold by the purchaser's for a higher consideration later on could only be the starting point for making an enquiry whether the transactions in question were bona fide or not. Without establishing that the transactions were mala fide in so far as the consideration was concerned, the provisions of Section 52(2) of the Income-tax Act could not have been applied.