Statutory presumption of ulterior motive under section 269C(2)(b) is not rebutted merely by no separate assessment action.

The statutory presumption of an ulterior motive under section 269C(2)(b) is not displaced merely because the revenue did not take separate assessment action against the transferor or transferee. Acquisition proceedings and assessment proceedings operate in different fields, and inaction in assessment may be a relevant circumstance only when read with other material; it does not by itself establish bona fides or negate the presumption based on the apparent consideration and fair market value difference. The Tribunal erred in treating such inaction as sufficient to set aside the acquisition.

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Issues: Whether the statutory presumption of an ulterior motive under section 269C(2)(b) stood rebutted merely because the revenue had not taken separate assessment action against the transferor or transferee.

Analysis: The acquisition and assessment functions operate in different fields and are exercised by different authorities. Failure to reopen or enhance the individual assessments does not by itself establish that the transaction was bona fide or that the difference between the apparent consideration and the fair market value could not support the statutory presumption. The absence of assessment action may be a relevant circumstance along with other material, but it cannot, standing alone, displace the presumption created for acquisition proceedings under Chapter XX-A.

Conclusion: The presumption under section 269C(2)(b) was not rebutted merely by inaction in the assessment proceedings, and the Tribunal was wrong in treating that circumstance as sufficient to set aside the acquisition.

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