1987 (5) TMI 52 - AT - Income Tax

Tribunal nullifies acquisition order for lack of evidence, value below threshold

NARENDRA P. PATWA. Versus COMPETENT AUTHORITY INSPECTING ASSISTANT COMMISSIONER.

The Tribunal allowed the appeal, nullifying the acquisition order due to the lack of concrete evidence of understatement and the property's value falling ... - Issues: Appeal against acquisition order of property based on valuation discrepancy and legal objections raised.Analysis:1. The appellant challenged the acquisition order passed by the Competent Authority regarding a property transferred for Rs. 3.5 lakhs, valued at Rs. 5,01,600 by the Authority. The appellant argued that the initiation of proceedings was unlawful as it was solely based on the Valuation Officer's report and presumption of understatement without concrete evidence of tax avoidance or income concealment. Citing the Bombay High Court decision in Unique Associates Coop. Housing Society Ltd. vs. Union of India, the appellant contended that the initiation of acquisition proceedings lacked legal basis and should be quashed.2. The appellant further argued that the apparent consideration being Rs. 3.5 lakhs fell below the threshold set by Government instructions to drop proceedings for amounts less than Rs. 5 lakhs. Referring to the Board's instructions, the appellant asserted that even at the appellate stage, proceedings could be challenged based on the Government's policy to discontinue proceedings for properties valued below Rs. 5 lakhs.3. The departmental representative countered by referencing decisions from other High Courts, such as the Delhi High Court and Allahabad High Court, to support the Department's position. Despite highlighting opposing decisions, the representative failed to provide substantial evidence to counter the appellant's legal contentions and the Government's policy regarding valuation thresholds for acquisition proceedings.4. The Tribunal upheld the appellant's legal contentions, relying on the Bombay High Court decision and the Government's policy directive. It found the initiation of proceedings to be unlawful due to the lack of concrete evidence of understatement and the property's value falling below the prescribed threshold. Consequently, the Tribunal allowed the appeal, emphasizing the legal flaws in the initiation of acquisition proceedings and the property's valuation below the stipulated amount, thereby nullifying the acquisition order.