Inadequate consideration under Gift-tax law requires proof that price is unreasonably low, not just a higher stamp duty value.

Transfers cannot be treated as made for inadequate consideration under section 4(1)(a) of the Gift-tax Act merely because a higher market or stamp duty value is suggested. The Court held that the Revenue must show material indicating that the consideration was unreasonable, excessively low, or so deficient as to shock the conscience. Here, the reopening based on an audit report was unsupported by any independent valuation enquiry, the registered conveyance deed reflected the stated consideration, and the enhanced stamp duty value only represented the registering authority's own valuation method. On that record, there was no proof of excess consideration, so the Revenue's case failed.

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Issues: Whether the transfers in question could be treated as having been made for inadequate consideration so as to justify the Gift-tax Officer's action.

Analysis: The assessment was reopened on the basis of an audit report, but the information so received was not supported by any independent enquiry into valuation. The registered conveyance deed showed the consideration, and the enhanced stamp duty value reflected the registering authority's own method of valuation. On the record, there was no material to show that the assessee had received excess consideration or that the consideration was unreasonable. Applying the principle that a transaction is not to be treated as for inadequate consideration unless the price is so low as to shock the conscience, the Court held that the Revenue's contention could not be sustained.

Conclusion: The transfers were not for inadequate consideration, and the question was answered against the Revenue.

Ratio Decidendi: For the purpose of section 4(1)(a) of the Gift-tax Act, a transaction cannot be treated as for inadequate consideration merely because a higher market or stamp duty value is suggested; there must be material showing that the consideration was unreasonable or so deficient as to shock the conscience.

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