Statutory presumption on understated transfer consideration sustained where surrounding facts showed tax-avoidance intent.

Section 269C(2)(b) raised a presumption that the transfer deed did not state the true consideration with the tax-avoidance object where the apparent sale price was below both the departmental valuation and the admitted actual payment. The transferee failed to rebut that presumption with cogent evidence; book entries and later explanations were insufficient in light of the surrounding circumstances, including non-disclosure of the true consideration, delayed return filing, admission of actual payment at a later stage, and unexplained source of funds. The acquisition order was therefore sustained, and the finding of tax-avoidance intent was upheld.

---

---

Issues: Whether the presumption under section 269C(2)(b) of the Income-tax Act, 1961, that the true consideration was not fully stated with the requisite tax-avoidance object, stood rebutted so as to invalidate the acquisition order.

Analysis: The apparent sale consideration was substantially below both the valuation made by the departmental Valuation Officer and the admitted actual consideration. On the admitted facts, the statutory presumption under section 269C(2)(b) arose that the transfer deed did not state the true consideration with the object contemplated by section 269C(1). The materials relied upon by the appellant, including entries in the books of account, did not displace that presumption. The surrounding circumstances, including the omission to disclose the true consideration, the delayed filing of the transferor's return, the later-stage admission of the actual payment, and the unexplained source of funds, supported the finding that the object was to facilitate evasion of capital gains tax.

Conclusion: The appellant failed to rebut the statutory presumption, and the acquisition order was sustained.

Ratio Decidendi: Where the admitted or proved facts attract the statutory presumption under section 269C(2)(b), the burden lies on the transferee to rebut it by cogent evidence; mere book entries or later explanations do not suffice if the surrounding circumstances support tax-avoidance intent.

---